Cable Independents: Angel of Smaller Operators

Feb 28, 2005  •  Post A Comment

Ask Matthew Polka what is at the heart of his mission as president of the American Cable Association, and his answer is simple: Ensure that lawmakers and regulators appreciate that not all cable operators are created equal.

As the nation’s top lobbyist for the interests of small-market cable operators, Mr. Polka finds himself repeating that mantra over and over as he inculcates into Washington policy-makers the understanding that what can work for a large multiple system operator such as Comcast might create hardship for an operator with only 400 rural subscribers.

“Where we come in is by being [small operators’] voice in Washington, educating policy-makers on their existence,” he said.

Whether it’s encouraging the deployment of high-speed data in poor or rural areas or mandating that cable operators be prepared to transmit digital television signals, Mr. Polka asserts that small-market cable systems must be taken into consideration when policy decisions are made.

“From the cable perspective, one can’t assume that the regulations of cable will apply equally to a Comcast [and] a Sunflower Broadband,” Mr. Polka said. “The average density of our members is 20 homes per mile, versus 200 for an urban area. That drives a great distinction of economics.”

Economics figures prominently into many of Mr. Polka’s arguments on behalf of the ACA’s 1,100 members, about 82 percent of which are cable operators for systems with 5,000 or fewer subscribers. Most of those companies are family-owned, often passed from generation to generation. Accessing Wall Street for many of them is a pipe dream. They tend to rely on local banks to finance capital projects.

Providing cable service to less densely populated areas means smaller operators often manage more headends. According to ACA, of the roughly 10,000 cable headends in the United States, small operators own and operate 80 percent.

That issue of economics is at the crux of a lobbying effort currently under way at ACA. As Congress pushes cable operators to begin carrying digital television signals, Mr. Polka is working to see that a more measured approach is taken with smaller operators.

“The cost to upgrade a smaller system is a lot different than a larger system,” he said. “[Smaller systems have] got a lot more headends to upgrade.”

Other issues closely watched by the organization include telecommunications reform and media consolidation.

“This past year we spent a lot of time pulling back the curtain on the effect of media consolidation and how media giants tie in bundled content for operators to buy whether they want it or not,” Mr. Polka said. He said his group’s work in this area led to many of the specific conditions placed on Rupert Murdoch’s News Corp. when it acquired a controlling 34 percent stake in satellite operator DirecTV more than a year ago.

Pittsburgh-based ACA was founded originally as the Small Cable Business Association in 1993 and was run mainly by a volunteer crew that included Mr. Polka, who at the time was general counsel for Star Cable Associates, a small MSO based in Pittsburgh. Six years later the group changed its name to the American Cable Association. It is member-funded through tax-deductible monthly dues of 2.25 cents per subscriber.

“Being located outside of Washington has been a benefit because it’s a reflection of our membership,” said Mr. Polka, who alternates between driving and flying to Washington. “We are not inside the Beltway, and that makes a difference in how we are perceived.”