Commisso Criticizes FCC Focus on Net Neutrality While It Shuns Retransmission Consent Changes
The government failed consumers by not intervening in retransmission consent disputes, including the recent battle between Fox and Cablevision, Mediacom CEO Rocco Commisso told investors Monday. The FCC is tasked by the Cable Act with protecting consumers against unnecessary cable rate hikes, and it hasn’t, he said. “Shame on those who have the responsibility and are not willing to do anything about it,” he said. “It’s amazing to me, that the FCC in particular, who has been entrusted with having the responsibility to protect the consumers, goes out to look for authority to address theoretical issues on net neutrality, but always seems to find no authority to take care of consumers when it comes to retransmission consent,” he said.
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Cable operators “can’t just go and do rate increases as easily as maybe 10-15 years ago,” Commisso said. As a result, cable operators have few choices when a station demands a sharp increase in retransmission consent fees. They can either raise rates at the risk of losing customers to competitors, or look at shrinking margins on its video business, he said. “I think somebody out there should really question, as we have, whether the FCC could find that authority to do at the very least what was contemplated by the Cable Act, to make sure consumer rates do not go up unnecessarily because of crazy demands made by unchecked large media companies.” Asked how the recent election results could affect the prospects for changes to the policy, Commisso said it isn’t a partisan issue.
Like other cable operators (CD Nov 5 p5), Mediacom is seeking more flexibility to offer smaller packages of programming to subscribers at a lower cost, said John Pascarelli, executive vice president of operations. “It all has to do with contracts and what we're allowed to do,” he said. “Some of the bigger guys may be able to move faster than us,” he said.
Mediacom lost 13,000 basic video subscribers during the quarter, 6,000 fewer than it lost a year earlier, leaving it with about 1.2 million. Its broadband subscriber count increased by 13,000 customers during the quarter to 827,000 and it added 7,000 phone subscribers for a total of 324,000, it said. Meanwhile, its average monthly revenue per basic subscriber gained 8.4 percent from a year earlier to $103.17, it said. Rate increases, and higher sales of DVR and HD products nearly offset the loss in subscribers as Q3 video revenue declined 1.1 percent from a year earlier to $228.8 million. The sluggish economy is probably the main factor in the company’s video subscriber losses, said Mediacom CFO Mark Stephan.
In 2011, Mediacom will probably increase efforts to sell phone and broadband services to non-video subscribers, Pascarelli said. “We've done some tests and we're trying to figure out the right [marketing] approach,” he said. “It is confusing to the marketplace, when we have been a video provider as long as we have, and we're just trying to find the right message without walking away from the video business completely.” Meanwhile, Mediacom is on pace to have 50 percent of its footprint upgraded to DOCSIS 3.0 broadband service by the end of the year, he said.