Small Op Outlook: Tough Row to Hoe

The Independent Show last week focused less on challenges facing small-to-medium operators today and more on the issues of tomorrow, said Matthew Polka, president and CEO of the American Cable Association."The theme was that our video business is a very difficult business," Polka said. "Content companies are bundling more and taking more in terms of subscriber fees. We don't have much control over that. Our future is our ability to provide the most effective broadband service we can."Along those lines, the recent FCC ruling to allow refurbished set-top boxes with integrated security will help reduce costs and speed up the digital revolution. More digital means spectrum currently occupied by analog channels can be reallocated and used for things like increasing broadband speeds or even to allot space for an over-the-top (OTT) premium tier, Polka said."Major programmers ... clearly take a significant amount of channel capacity from members because of bundling," Polka said. "Technical innovations and lower cost set-top boxes are important because these developments allow (operators) to reclaim more channels faster."There actually were a number of OTT providers at the show, presenting ways they could actually work with operators to draw in so-called millennial customers who may feel they don't need cable TV, only a broadband connection to get video online. A partnership between OTT and cable could provide this access, but there also potentially could be premium channels consisting of online content, Polka said."There was a lot of outside-the-box thinking as to how members can better embrace OTT technology as well as content to provide a stronger product to customers," Polka said.In order to provide the Internet speed and capacity that is growing in demand, the independent operators need access to an Internet backbone to act as the big pipe for traffic. The trouble is there currently is not a lot of competition for the "middle mile," which means the cost of leasing this bandwidth is high and providing broadband for customers in rural areas very expensive."We talked (at the show) with vendors (and) middle-mile providers to encourage greater middle-mile production and deployment in rural areas," Polka said. "If there is more marketplace competition, this would bring the price of the middle mile down. There would be more, higher speed Internet service and (greater) capacity than we are doing today."Monta Monaco Hernon is a free-lance writer. She can be reached at [email protected].