by Steve Pastorkovich
OPASTCO Business Development Director/Senior Policy Analyst

The ramifications of the National Broadband Plan’s (NBP) proposed changes to the Universal Service Fund and intercarrier compensation have, appropriately, seized the attention of carriers nationwide.  Even as proceedings related to the NBP’s implementation are underway, developments in the video sector continue to unfold.  Because these issues can also have a profound impact on rural carriers’ operations, OPASTCO is working on them in tandem with our efforts on the National Broadband Plan.

From the rural carrier perspective, video is also a broadband issue.  The National Exchange Carrier Association (NECA) has reported that NECA pool members that offer broadband services bundled with video have broadband adoption rates that average 24 percent higher than those offering broadband alone.  Therefore, OPASTCO has aggressively highlighted to policy makers that video, in one form or another, is the greatest single driver of broadband adoption by consumers.

Two of the most prominent video issues are retransmission consent reform, and the proposed merger of Comcast with NBC-Universal.  OPASTCO is actively engaged in these items, as both stand to have profound impacts on rural carriers’ ability to offer affordable video and broadband services.  In addition to our own efforts, OPASTCO has joined selected coalitions in order to represent rural carriers’ interests most effectively.  Outside of the policy realm, OPASTCO is also a co-sponsor of TelcoTV, the premier industry event that focuses on carriers’ involvement in the video market.  We’ll look at each of these items below.

Retransmission Consent

On retransmission consent, OPASTCO has long advocated reform of the outdated rules that insulate broadcasters from market forces.  In effect, small video providers are left with “take-it-or-leave-it” offers which require their customers to purchase unwanted channels, prevent service providers from crafting service tiers that match consumer demand, and prohibit the retransmission of broadband signals at more reasonable rates from nearby markets, among other impediments. 

After a long period of getting little to no attention from officials, retransmission consent suddenly flared into prominence earlier this year when customers in large markets temporarily lost signal due to a retransmission consent dispute.  More attention has been generated in recent weeks as other high-profile retransmission consent agreements between major programmers and large cable or satellite companies are set to expire.  Brinksmanship is a common negotiation tactic, raising the possibility that consumers might lose access to programming.  While this gets the attention of policy makers, carriers still face an uphill struggle on this issue.  To enhance our own advocacy efforts, OPASTCO has joined the American Television Alliance (www.americantelevisionalliance.org), a coalition composed of consumer groups, large and small video providers, independent programmers, and others, who all share the goal of reforming the outdated retransmission consent regime. 

Comcast- NBC Universal Merger

The proposed merger of Comcast, the nation’s largest broadband and cable television provider, with NBC-Universal, one of the leading sources of programming, threatens to further restrict access to content that rural providers need to meet consumer demand.  In order to prevent further price discrimination and other anti-competitive effects from impacting members, OPASTCO has joined with the National Rural Telecommunications Cooperative (NRTC) and the Rural Independent Competitive Alliance (RICA) to form the Fair Access to Content and Telecommunications (FACT) Coalition. 

FACT is working with other rural groups to request merger conditions that will reduce the ability of the merged entity to restrict access to, or over-charge members for, programming.  The conditions address broadcast programming, cable and on-demand programming, and “over-the-top” content that consumers can access via broadband connections.  In addition, OPASTCO is part of a broader-based group, the Coalition for Competition in Media (www.competitioninmedia.org) that is working with policy makers to highlight a variety of concerns with the proposed merger’s impacts on consumers and providers alike. 

TelcoTV Conference & Expo

Technology and the marketplace are not standing still while policy makers in Washington consider these and many other issues.  Web-enabled televisions, new set-top boxes, and new user interfaces are just a few of the innovations that are emerging at a rapid pace.  Yet for all these technological advancements, earning a return on video investments remains very challenging for rural carriers.

To help members keep up with this fast-paced market, OPASTCO is once again co-sponsoring the TelcoTV Conference and Expo.  The event will be held November 9-11 in Las Vegas, Nevada.  The conference will cover topics such as cost-effective content acquisition strategies, making “over-the-top” video a viable part of your service offering, taking an honest look at return on investment, and many more.

OPASTCO members enjoy a 25 percent discount on registration for this event.  Use code OPASTCO when registering to obtain your discount.  Registration and further information is available at www.telcotvonline.com.

Rural carriers need to keep up with the latest developments and market trends, even as they seek effective policies that will allow them to continue serving customers in high-cost areas.  OPASTCO is working hard on both fronts, and encourages your participation and input.