ACA: Broadcasters making it tougher for consumers to pay for broadband Internet access

Broadcasters are making it more difficult for consumers to pay for broadband Internet access and subscription video programming because of their demands that cable operators pay increases of 100 percent or more in retransmission-consent fees, several small cable operators told FCC officials last week.

In a meeting with FCC Media Bureau chief William Lake, executives from Knology, WOW!, Ritter Communications, MetroCast, Armstrong Utilities and lobbyists from the American Cable Association detailed "massive" hikes in retransmission-consent fees. The operators, who were in Washington, D.C., to attend the ACA Summit, attempted to demonstrate how increased fees could impact the ability for consumers to purchase other services.

"They [operators] anticipated that these price increases will result in some consumers being priced out of the ability to afford subscription television service or to add additional services such as broadband Internet access," the operators said according to an FCC ex parte filing from ACA. Cable executives that met with Lake and other FCC officials on March 15 included Armstrong Utilities VP Jim Mitchell, WOW VP of programming Peter Smith, Ritter Communications VP John Strode, MetroCast VP of systems operations Danny Jobe and Knology corporate programming executive Andrea Pritchard.

Smith said that WOW is dropping independent cable networks as a result of retransmission-consent fee increases, and no longer carrying out-of-market stations that demanded fees from WOW. He said WOW's retransmission fees rose by 117 percent during its last three-year cycle, and that its fees are effectively doubling every three years.

The cost for Ritter's cable subscribers in Marked Tree, Ark., to watch local TV stations was $2.16 monthly in 2011, and that will increase to $4.33 monthly this year, Strode said.

The lowest retransmission-consent fee increase for stations carried by Knology last year was 40 percent, Pritchard told FCC officials.

ACA has complained to the FCC about coordinated retransmission-consent deals between broadcasters in the same market. Smith said that WOW faced a 138 percent year-over-year increase for retransmission-consent fees at its system in Columbus, Ohio, where a single broadcaster controls four TV stations.

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