Broadband Cable Association of Pennsylvania


April 1, 2014

A consortium of cable operators slated to lose Viacom networks today includes area providers Service Electric and MetroCast. Viacom, the parent of MTV, Comedy Central and Nickelodeon, has threatened to pull its programming when an agreement with the National Cable Television Cooperative expires. That agreement was set to expire at midnight today, and more than 5 million cable customers could be affected nationally. MetroCast is a member of NCTC but has been negotiating the renewal of its contract directly with Viacom, Vice President of Marketing and Communications Andrew J. Walton said Monday. "It is Viacom ultimately that determines whether the networks will be available to viewers after the midnight deadline, but, again, we are hopeful that the matter will be resolved in a way that will permit the continued carriage of the networks on our lineup," Walton said.

A message on Service Electric's website Monday said the cable operators want to protect their customers from "significant programming fee increases." Viacom's demands would cost each subscriber at least $4 a month, said Jack Capparell, general manager of Service Electric's Lehigh Valley division. "We are hoping a solution can be found before midnight tonight. If Viacom refuses to negotiate in good faith, these services will be interrupted tonight," Service Electric's web message said. The dispute does not affect Comcast cable TV subscribers because several years remain on a long-term agreement between Comcast and Viacom, Comcast spokesman John Demming said.

Viacom wants a 100 percent increase in programming costs the first year and increases of 10 percent per year in subsequent years, Capparell said, adding Viacom's "programming quality is down" and "viewership is down." A Viacom representative did not return a call seeking comment. Viacom spokeswoman Carole Robinson emailed a news release Monday with a statement. "Viacom is committed to serving its audience and has been negotiating tirelessly for months to reach an agreement that will ensure no service interruption of its networks," the email said. "We are simply asking your cable provider for fair value for our networks, which continue to deliver more viewers than any other cable programmer, but cost far less to cable companies."

Service Electric will provide updates on negotiations on Channel 900, Capparell said. Service Electric is a private, family owned cable business with 250,000 subscribers in Central and Northeastern Pennsylvania and Northwestern New Jersey. Service Electric Cable TV Inc. has more than 100,000 subscribers in the Lehigh Valley and 18,400 in the Wilkes-Barre area, which includes the city, Kingston and Hanover Township. Affiliated Service Electric Cablevision Inc. serves more than 100,000 subscribers in areas that include Hazleton, Mahanoy City, Birdsboro and Sunbury.

About 20,000 MetroCast subscribers are from area communities, including Nanticoke, Berwick, Dallas, Freeland, Glen Lyon, Hazleton, Hunlock Creek, Larksville, Plymouth, Shickshinny, Nuangola, Shavertown, Sugarloaf, Wapwallopen, Weatherly and White Haven. Viacom claims the cable operators "are choosing to drop your channels rather than productively work to reach a deal," according to "Viacom is only asking to be compensated for the value we deliver so we can continue to invest in creating new shows for our viewers," the website says. Other Viacom cable networks include TV Land, CMT, BET, Spike and VH1. The expiring deal is nearly five years old. Hazleton Standard-Speaker

The Federal Communications Commission voted Monday to bar companies from controlling two or more TV stations in the same local market by using a single advertising sales staff. The commission voted 3-2 to support Chairman Tom Wheeler's proposal to crack down on joint ad sales agreements between TV stations, arrangements that have proliferated in part because of a wave of consolidation in the broadcast industry. There are 128 joint-sales agreements in place around the country, according to Patrick Communications, a telecom brokerage firm in Maryland.

As a result of the vote, any station handling more than 15% of ad sales for another station will be considered the owner of both going forward, similar to how the FCC's rules treat radio stations. Stations will have two years to unwind the agreements or secure a waiver from the FCC. Stations can get waivers if they can prove the agreements are in the public interest, or can prove the agreement doesn't give the larger station influence over programming at the smaller station. Smaller stations may also get extra time if they can show they are on a path toward economic independence within five years.

Mr. Wheeler argued that broadcasters use joint sales agreements to get around the FCC's limit on owning more than one full-power TV station in the same local market. The agreements "have been used, skirting the existing rules, to create market power that stacks the deck against small companies seeking to enter the broadcast business," Mr. Wheeler said. Broadcasters have countered the agreements help smaller TV stations, which may otherwise lack the resources to stay in business or provide local programming.

The proposal, which is part of the FCC's regular review of its media ownership rules, passed by a party-line vote after the addition of language designed to encourage waivers for joint-sales agreements that encourage diversity in media ownership. Three of the four full-power TV stations in the U.S. owned by African-Americans are party to such agreements, and would be likely to secure waivers. The National Association of Broadcasters criticized the decision on Monday. "It's disappointing the FCC would take this action without first completing its 2010 statutorily mandated media ownership review. As the record before the Commission clearly shows, the public interest will not be served by this arbitrary and capricious decision."

Republican Commissioner Ajit Pai, who voted against the measure, said the waiver process provides doesn't do much for small and rural stations that may struggle to stay afloat without joint-sales agreements. He also criticized the proposal for not grandfathering in existing agreements. "Today's item gives the media bureau almost unbridled discretion to grant or deny a waiver request. And while I very much hope I am wrong, I fear that the substantial majority of requests will not meet with a favorable response," Mr. Pai said.

FCC staff, speaking at Monday's meeting, addressed the commission's broader review of media ownership rules, suggesting that a ban on owning a newspaper and TV station in the same local market should be maintained. The staff recommendation is a reversal from the FCC's stance under its prior chairman, Julius Genachowski. However, the staff review suggested the ban on owning a newspaper and radio station in the same market should be relaxed. Republican Commissioner Michael O'Rielly and Mr. Pai argued the broadcast-newspaper ban should be relaxed to aid the struggling newspaper industry and said FCC action on media ownership rules is several years overdue.

The FCC separately voted unanimously to ban local TV stations in the same market from banding together to negotiate retransmission fees with pay-TV providers, if the stations are separately owned and among the top four in their market. All five commissioners expressed hope that forcing stations to negotiate separately would reduce cable prices for consumers. The commission also voted to expand the availability of spectrum for Wi-Fi use and to move forward with an auction of a crucial band of spectrum well-suited for wireless use later this year. At the meeting, FCC staff also recommended forcing stations to disclose service agreements between stations to share other resources, such as helicopters and studios, or programming, particularly news and local shows, to determine whether the agreements should be the target of future FCC action. Wall Street Journal

Comcast Corp. will announce Tuesday the launch of cloud-based digital-video recorder services in the Philadelphia area, New Jersey, and northern Delaware. Cloud-based DVR service places more of Xfinity cable onto distant computer servers as compared with residing on set-top boxes inside the home. Comcast says it will introduce the additional cloud-based Xfinity features to other U.S. markets through 2014. The new DVR services come with Comcast's X1 platform, which Comcast has said it will license to other cable companies and which blurs the line between cable TV and the Internet. With the new services, Xfinity customers will be able to store video on Comcast's computer servers and download the video over Comcast's network directly onto tablets or smartphones. Comcast also says that as part of the upgrade it will expand the streaming of live television channels to mobile devices inside the home. To deliver these new streaming and download features, Comcast has launched new Xfinity TV apps for tablets and smartphones and a dedicated portal for viewing on computers.