Small Cable Companies Blame Comcast For Their High Prices

Image courtesy of Mike Mozart

Smaller cable companies say they want to save you money, but they can’t. Why not? Comcast won’t let them.

At least that’s what the American Cable Association — an industry group representing all the little pay-TV companies that haven’t been bought by Comcast…yet — said in an Oct. 10 filing [PDF] with the Federal Communication Commission.

The ACA claims that Comcast forces smaller providers to carry a slew of NBCUniversal channels, effectively preventing these companies from offering their customers so-called “skinny” bundles that cost less and include fewer channels you don’t watch anyway.

The comments, submitted as part of the FCC’s annual review of competition in the pay-TV industry, highlight how Comcast’s wide array of assets can negatively affect competition among cable providers.

Putting Up Restrictions

ACA argues that many smaller cable companies are trying to offer customers inexpensive bundles that allow users to break up with large, more expensive cable companies, like Comcast.

But those big companies — described as multichannel video programming distributor networks or MVPD — aren’t having it. Instead, they’ve found ways to force the smaller companies to include their owned networks, effectively increasing the costs of skinny bundles, defeating the entire purpose.

“Many consumers that want to opt out of the big cable bundle in favor of a less expensive alternative are gravitating to a bundle that includes just the basic cable tier (essentially local TV stations) plus broadband Internet access and then relying on over-the-top video services to gain access to a more limited amount of cable programming more narrowly tailored to their specific interests,” ACA President and CEO Matthew M. Polka, said in a statement.

For instance, according to the filing, Comcast’s ownership of NBC Universal means the company controls “access to significant programming that its rivals must have access to in order to compete with it.”

Comcast’s must-have programming includes local television stations, cable channels, and regional sports networks.

The ACA claims that Comcast doesn’t want one of these elements to feel left out, so when a smaller company wants to offer customers local television stations or NBC-owned cable channels, the larger provider will require the company to offer sports, pushing up the price of the bundle.

“Denying a rival access to even one of these three categories of programming would threaten an [company’s] ability to compete, as the Commission has recognized,” ACA writes. “Thus, without a doubt, program access protections administered by the Commission continue to be necessary and important to protect competition and consumers.”

The group claims that Comcast, through its licensing agreements with regional sports networks, has unilaterally decided that ACA members should no longer be able to sell the basic broadcast service tier with broadband internet.

As a result, ACA claims that an MVPD must either raise the price of a broadcast basic tier or stop offering a true basic tier/broadband bundle that doesn’t induce a large number of costly cable networks.

Polka notes in a statement that this scenario shows that Comcast is standing in the way of ACA members that want to help customers “escape the burdens of the big and expensive expanded basic bundle of channels.”

Only Gonna Get Worse

ACA warns that unless the FCC steps in, things will only get worse in the near term, pointing to the impending merger between AT&T and Time Warner, which will result in another must-have block of programing under the control of a MVPD.

Additionally, the upcoming Jan. 2018 expiration of program access conditions placed on the Comcast-NBCU merger could make it even more difficult and expensive for smaller companies to offer Comcast’s networks.

“At an absolute minimum, the Commission must continue to vigorously enforce program access rules to provide at least some minimum level of protection to competition between MVPDs,” ACA writes.

The Commission should also immediately open a proceeding to determine if there is a need to extend or renew the Comcast-NBCU merger program access conditions.

As for Comcast, the company tells DSLReports that it’s just doing business.

“NBCUniversal negotiates in good faith with all of its distribution partners with the goal of making programming available to as many viewers as possible on fair market terms that are consistent with what other programmers offer,” a rep said.

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