Networks for Competition and Choice Press Briefing on Video Programming Reform October 20, Who We Are
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1 Networks for Competition and Choice Press Briefing on Video Programming Reform October 20, 2015 Who We Are Networks for Competition and Choice is a coalition of INCOMPAS, ITTA, NTCA The Rural Broadband Association, and Public Knowledge that represents over 1,000 networks in the communications marketplace, and their customers. Building upon our recent collective work on video-related issues, we are continuing to work together to raise awareness of the need for video programming reform and the impact video has on the availability and adoption of higher-speed broadband and broadband competition. The Federal Communications Commission has long recognized that residential consumers prefer to purchase both broadband and linear video services together in a bundled product. As such, broadband network providers must provide linear video services not just broadband services in order to compete head-to-head with other providers in the residential marketplace and to achieve higher broadband adoption rates by consumers. Obtaining the rights to provide video content is critical to offering linear video; however, content costs continue to rise significantly. Over the last eight years, programming fees have more than doubled. For smaller MVPDs, programming fees overall have increased over 10% a year excluding regional sports networks and retransmission consent fees have seen annual increases of 40% in the last few years. Indeed, between 2005 and 2012, these fees grew 8,600%. The Associations network members are providing linear video service, often at a loss, simply to meet consumer demand for bundled offerings and advance the provision of their broadband services. The ability to provide viable video service to consumers has a direct impact on our members ability to expand and upgrade their broadband networks. While video services remain vital to the deployment and adoption of broadband services, video programming prices and practices make it particularly difficult for the Associations members to offer content in competitive retail packages that reflect what their subscribers want and can afford. Video cordcutting and reliance solely on over-the-top video service is not widespread only 7% of television households have done so. Just last month, NTCA The Rural Broadband Association and INCOMPAS surveyed their members to gather data and information regarding their provision of video services, as well as their experience negotiating with broadcasters for content. Separately, ITTA surveyed its members. 87% of respondents to the NTCA/INCOMPAS survey currently provide video service, and 52% have experienced an uptick in broadband adoption in the markets where they provide video service. 95% of the respondents to that survey stated that the single biggest barrier to providing video service is obtaining access to reasonably priced programming. With respect to retransmission consent fees, 40% of NTCA/INCOMPAS survey respondents reported that they faced an increase in those fees of more than 100% for broadcast programming. In comparison, 79% of respondents reported an increase of 20% or less for non-broadcast programming fees. See NTCA The Rural Broadband Association and INCOMPAS 2015 Video Competition Survey. 1
2 Similarly, all ITTA member companies provide video service in all or some portion of their geographic footprint. The ITTA survey results make clear that its members provision of video service drives broadband adoption when it is offered as part of a bundle with other communications services. In comparing broadband subscribership in video versus non-video markets, 100% of survey respondents indicated that they have experienced an increase in broadband adoption in the markets where they provide video service. Indeed, the broadband adoption rate in some video markets outpaces non-video markets by a ratio of nearly 2:1. ITTA s members also have reported escalating content fees as the single most significant issue from a cost standpoint that they face in the delivery of video programming. With respect to retransmission consent fees for broadcast programming, 50% of survey respondents reported that they experienced an increase in those fees of more than 90% in comparison to the previous contract cycle. By contrast, 100% of respondents reported an increase of 20% or less for nonbroadcast programming fees. To promote higher broadband speeds and greater broadband choice and adoption, the Commission must promote video competition. The Coalition is pleased that the Commission is reviewing some aspects of access to video programming, including broadcast retransmission consent and good faith negotiations, and is considering an order to eliminate its outdated program exclusivity rules. These are good first steps, and this Coalition wholeheartedly supports Commission action that will help check anticompetitive negotiating tactics and the rising costs of programming. Speaker Bios Chip Pickering, CEO of INCOMPAS Chip Pickering became CEO of COMPTEL, now known as INCOMPAS, in January Pickering was a six-term Congressman, representing Mississippi s Third District. During this time, he served on the House Energy & Commerce Committee, where he was vice chairman from 2002 to 2006 and a member of the Telecommunications Subcommittee. He also was cochairman and founder of the Congressional Wireless Caucus and an assistant minority whip of the House. Previously, Chip worked for Sen. Trent Lott (R-Miss.) and served as a staff member on the Senate Commerce Committee, where he helped shape the Telecommunications Act of Because of his role in drafting the 1996 Act, he became well known as a Congressional leader on telecommunications issues. Most recently, Chip was a partner with Capitol Resources LLC, a public affairs and government relations firm, where he represented an array of telecom clients, including wireless, cable and competitive broadband providers, as well as non-profits and companies specializing in education, energy, technology and defense. There, he also played a vital role as one of the principal negotiators in developing a wireless industry agreement for interoperability in the 700 block. 2
3 Genevieve Morelli, President of ITTA Genny Morelli is President of ITTA. Ms. Morelli has over twenty-five years experience as a communications professional. Immediately prior to joining ITTA in March 2011, Ms. Morelli was a Partner in the Washington, D.C. office of national law firm Kelley Drye & Warren LLP, where she represented a diverse group of communications service providers in federal and state regulatory, appellate litigation and transactional matters. Ms. Morelli previously headed the federal and state regulatory and legislative programs for Qwest Communications International and prior to that time served as Executive Vice President & General Counsel of the Competitive Telecommunications Association ( INCOMPAS ). Ms. Morelli also served as communications counsel for the National Association of Regulatory Utility Commissioners ( NARUC ). Ms. Morelli holds a law degree from George Washington University School of Law and a Bachelor of Arts degree in Politics from New York University. She is a member of the District of Columbia Bar and the Federal Communications Bar Association. Jill Canfield, Vice President of Legal and Industry and Assistant General Counsel at NTCA The Rural Broadband Association Jill Canfield is the vice president of legal and industry and assistant general counsel at NTCA. Canfield prepares many of NTCA's pleadings for submission to the FCC, federal courts and other agencies in an effort to obtain decisions that enhance NTCA member viability, opportunities to compete in the marketplace and access to multiple technologies. Canfield also provides expert assistance addressing member issues involving legal, regulatory and industry matters. Before joining NTCA in 1998, Canfield was an associate at a Washington, D.C., law firm, where she represented and provided legal guidance to wireless, wireline, and broadcast clients. Canfield holds a Bachelor of Science degree from the Newhouse School of Public Communications at Syracuse University, and a juris doctor from Syracuse University College of Law. She is a member of the New York State and District of Columbia bars and is certified for corporate practice in Virginia. She also is a member of the Federal Communications and American Bar Associations. John Bergmayer, Senior Staff Attorney at Public Knowledge John Bergmayer is a Senior Staff Attorney at Public Knowledge, specializing in telecommunications, Internet, and intellectual property issues. He advocates for the public interest before courts and policymakers, and works to make sure that all stakeholders--including ordinary citizens, artists, and technological innovators--have a say in shaping emerging digital policies. 3
4 Organization Bios INCOMPAS Based in Washington, D.C., INCOMPAS is the leading industry association representing competitive communications service providers and their supplier partners. Our members are catalysts for creating economic growth and improving the quality of life of all Americans through technological innovation, new services, affordable prices and greater choice. These entrepreneurial companies offer a wide array of broadband voice, video, Internet and data offerings, using both wireline (copper/fiber) and wireless networks to reach their customers. Among the state-of-the art solutions they deliver are managed services, cloud computing and unique applications that are developed and deployed via next-generation, IPbased managed networks. We advance our members interests through twice-annual trade shows; networking opportunities; education; and policy advocacy before Congress, the Federal Communications Commission and the courts. Our core mission is designed to ensure that competitive communications providers can continue to offer value pricing, better service and greater innovation to consumers. ITTA ITTA serves as the preeminent advocate for mid-size companies before federal policymakers, in industry forums, and before the federal courts on issues affecting the communications industry. ITTA s mission is to advance its members interests by promoting public policies that encourage communications sector investment and create opportunities for ITTA members continued business success. ITTA s professional staff advocates on behalf of its members before the Federal Communications Commission and Congress. Its regulatory group actively participates through written submissions and oral advocacy in numerous proceedings before the FCC and is viewed by regulators as the go to source for input on all issues affecting mid-size carriers. ITTA s legislative group maintains an active presence on the Hill to ensure that the interests of the association s members are fully considered by Congress on the wide range of legislative issues that impact communications service providers. ITTA s staff also consistently engages with other segments of the communications industry and their representative groups to ensure that all avenues of advocacy are utilized to further ITTA members business interests. ITTA s staff routinely represents ITTA members at national, regional, and state industry conferences. In the recent past, ITTA has presented at meetings held by the National Association of Regulatory Utility Commissioners (NARUC), the National Association of State Utility Consumer Advocates (NASUCA), the Mid-America Regulatory Commissioners (MARC), the National Council of State Telecom Executives (NCSTAE), INCOMPAS, the American Cable Association, and the state telecom associations of Maine, Nevada, Oklahoma, Pennsylvania, and Texas. 4
5 NTCA The Rural Broadband Association NTCA The Rural Broadband Association is the premier association representing nearly 900 independent, community-based telecommunications companies that are leading innovation in rural and small-town America. NTCA advocates on behalf of its members in the legislative and regulatory arenas, and it provides training and development; publications and industry events; and an array of employee benefit programs. In an era of exploding technology, deregulation and marketplace competition, NTCA s members are leading the IP evolution for rural consumers, delivering technologies that make rural communities vibrant places in which to live and do business. Because of their efforts, rural America is fertile ground for innovation in economic development and commerce, education, health care, government services, security and smart energy use. Public Knowledge Public Knowledge promotes freedom of expression, an open internet, and access to affordable communications tools and creative works. We work to shape policy on behalf of the public interest. Public Knowledge works at the intersection of copyright, telecommunications, and Internet law, at a time when these fields are converging. PK's experience in all three areas puts it in an ideal position to advocate for policies that serve the public interest. What Public Knowledge does: Ensure universal access to affordable and open networks Promote creativity through balanced copyright Advance government transparency and the public s access to knowledge Uphold and protect consumer rights Oppose policies that would slow technology, impede innovation, shrink the public domain, or limit fair use Educate the press, the public, and policymakers using plain-language analysis, white papers, blog posts, and videos Produce events that provide a forum for policymakers, the public, industry, and the press to exchange ideas about our core issues 5
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