SMALL AND RURAL CABLE OPERATORS WAGE LOBBYING CAMPAIGN

Operators of small and rural cable systems were waging lobbying campaign on Capitol Hill this week, asking for help as they face unprecedented competition from DBS, plus increasing programming costs from media conglomerates such as Disney, GE, News Corp., Viacom. Group, brought together by American Cable Assn. (ACA) for 3 days, was spending much of Tues. on Hill, making face-to-face contact with key lawmakers. But first order of business was questioning some of those lawmakers’ top advisers in morning panel discussion. Jessica Wallace, majority counsel for House Commerce Committee, sought to assure 50 ACA members that Committee Chmn. Tauzin (R-La.) was keenly aware of issues facing small and rural cable operators. She said Tauzin’s main focus at moment was DTV transition and bringing together various industry sectors in informal setting to try to negotiate solutions on copyright and DTV-cable compatibility issues that wouldn’t require congressional action. Asked about rising costs of programming, Wallace said Tauzin knew it’s problem, especially with regard to sports programming, but said that, as long as people continued to buy those programming packages, there wasn’t much Congress could do.

Jordan Bernstein, aide to Rep. Emerson (R-Mo.), chmn. of Rural Caucus, focused on proposed EchoStar-DirecTV deal, saying it would harm rural populations by giving them no choice on prices for programming. Bernstein made no secret of fact that Emerson adamantly opposed deal. Specifically, he said he saw problems with EchoStar’s challenging must- carry in court when CEO Charles Ergen had pledged nationwide local-into-local service reaching all 210 media markets. “The more we met [with Ergen], the more we worried about the merger,” Bernstein said. “He just kept saying it’s only 10 million people, but they are our 10 million people.” Bernstein also expressed skepticism about Ergen’s pledge for national pricing, saying that family of 4 living on $18,000 per year in rural Missouri couldn’t afford to pay same price as someone living in N.Y.C. “The bottom line is, you're affecting our constituents.”

However, Thad Bingel, aide to Rep. Cannon (R-Utah), who has large rural constituency, said much power on issue lies with FCC and Justice Dept., which must approve deal for it to go through, and not Congress. “Congress has kind of a look and see and cajole and threaten role in this thing,” said Bingel, who admitted in interest of full disclosure that he had been consultant to EchoStar and that he had DirecTV at home. “Ultimately, the decision is going to lie with the regulatory agencies,” he said. Nevertheless, Bingel said, Cannon worried about possibility that satellite deal would foreclose competitors from entering market. He predicted EchoStar-DirecTV proposal would “go down” or “look radically different” if approved. Proposed AT&T Broadband-Comcast merger wasn’t big issue during session. Day earlier, ACA came out with statement saying that while it didn’t oppose that merger at moment and that it presented many exciting possibilities, it also presented problems in that larger company would have increased leverage over smaller operators (CD April 30 p1).

ACA member Neal Schnog, who owns Uvision, cable operator in rural Oregon, complained that program access issues weren’t high enough on Congress’ agenda when high programming costs were being forced upon cable operators at same time Sen. McCain (R-Ariz.) was complaining about soaring cable rates (CD April 17 p7). But Bingel said Congress’ hands in some ways were tied. “I'm not sure how much we can control on the increasing cost of programming,” he said. “We can’t all subsidize entertainment that people would like to have.” Tauzin is concerned about programming costs, Wallace said, but “everyone’s costs go up and some of it does make sense. If you get new, quality, innovative programming, you have to pay for it.”