American Cable Association CEO and President Matt Polka cited ESPN360.com as an example of why small cable operators should be concerned about whether Web content providers decide to block consumer access to their Web sites until broadband access providers agree to pay wholesale access fees.
Speaking during a keynote address at the 4th Annual Independent Cable Show in Texas, Polka said Walt Disney’s ESPN360.com is pursuing a closed Internet business model that requires broadband access providers to pay fees based on their total subscriber base, regardless of whether the majority of the subscribers are watching ESPN’s sports content on their computers.
"Here we have drawn a line in the sand. ACA will fight ESPN360.com and its business model clones because all they do is drive up the retail cost of broadband for everyone, especially for those who have absolutely no interest in viewing sports on a computer screen," Polka said.
ACA’s position is that consumers should have the ability to access all legal Web content on their own, and that their access to services like ESPN360.com should not be conditioned on whether or not their broadband access provider has an agreement with Disney.
"With video exploding on the Internet, big media companies are experimenting with business models that are far from friendly toward ACA members. Disney is demanding fees from small cable to ensure their broadband subscribers can click on ESPN360.com on the Internet," Polka said. "In our view, ESPN360.com needs to have a direct relationship with the consumer and not use broadband providers as toll collectors on the Information Superhighway."
In another speech at The Independent Show, ACA chairman Steve Friedman lauded Washington, D.C., policymakers for assisting small, independent cable providers in the last year, but cautioned ACA members in attendance that they could face closer regulatory supervision in the years ahead.
"In the past year, ACA has succeeded in persuading the FCC to exempt small cable operators from having to distribute must-carry TV stations in both analog and digital formats for the next three years. And the FCC recently issued decisions that began to liberate small cable operators from having to rely on costly CableCard set-top boxes that were making it prohibitively expensive to transition analog networks to all-digital platforms," Friedman said.
Friedman, who is also COO of Wave Broadband in Kirkland, Wash., said that policymakers might pursue new initiatives that could have an impact on ACA members, such as broadening the mission of the Universal Service Fund to subsidize broadband deployment, particularly if reforms do not take into account the interests of small operators.
Friedman also referred to the introduction of the Broadband Internet Fairness Act by U.S. Rep. Eric Massa (D-N.Y.), which he said could end up stifling small cable broadband providers from initiating consumption-billing plans that give consumers ultimate control over how much they spend each month for their Internet access.
The Independent Cable Show is organized by the ACA and the National Cable Television Cooperative, a Lenexa, Kan.-based nonprofit that purchases programming and equipment for small- and mid-size cable operators.