Patrick Knorr, chief operating officer of Sunflower Broadband, in testimony yesterday before a House subcommittee, urged Congress to update communications laws to put a stop to what he called media conglomerates that are taking advantage of consumers served by small, independent cable operators.

In his remarks, Knorr described a marketplace he claimed is being distorted by outdated laws and regulations that unfairly supply media conglomerates with powerful leverage to take full advantage of consumers served by Sunflower Broadband and nearly 1,000 other small and mid-size cable operators represented by ACA.

Knorr singled out retransmission consent laws that, he said, combined with FCC network exclusivity rules, "provide local network affiliates with a monopoly that enables them to charge vastly inflated prices to small cable operators. Because small cable operators typically serve just a small fraction of the local viewing audience, they have no choice but to accept the broadcasters' take-it-or-leave-it approach to retransmission consent."

At the same time, he added, the government needs to ensure that programmers' abusive contracting practices do not become the norm and destroy the promise of an open and affordable Internet.

"We hope you will take advantage of this unique moment in time to consider how to improve the rules that govern our marketplace that are nearly two decades old and pre-date the emergence of the Internet," Knorr said. "Consumers deserve better services than can be provided under today's regulatory regime. We are also concerned about the future of a free and open Internet that is being threatened by the emerging business model that compels consolidated and dominant content providers to leverage their video content in anti-consumer ways."

Knorr, immediate past chairman of the American Cable Association, appeared before the House Subcommittee on Communications, Technology and the Internet, a panel that has jurisdiction over cable operators, broadcasters, satellite TV companies, vertically integrated cable programmers, phone companies, and the FCC.

Knorr proposed a number of ideas and solutions designed to build a communications marketplace where small cable operators can offer their consumers options and alternatives that are unavailable today. According to Knorr, consumers would be better served under rules that would:

• Prohibit any party, including a broadcast network, from preventing a broadcast station outside of the local market from granting retransmission consent to a smaller cable company outside of a broadcaster's protected zone.
• Broadly apply the News Corp./DirecTV merger conditions related to retransmission consent, which include a streamlined arbitration process, the ability to carry signals pending dispute resolution, and the automatic retransmission consent for smaller cable.
• Address the challenge of providing local digital signals for rural markets by granting cable access to local-into-local DBS television signals on non-discriminatory rates, terms and conditions.
• Ensure that all programming should be provided to all small cable operators with non-exclusive, standardized rates, terms and conditions.
• Authorize a confidential review of retransmission consent and cable programming rates, terms and conditions and release aggregate data and trends yearly, similar to what is done on overall cable rates by the FCC.
• Provide parity with DBS that would permit small cable operators to offer local broadcast programming in its own tier as an optional consumer purchase.

"ACA members," Knorr said, "should have at least some right to shop for retransmission consent in neighboring markets to see what kind of rate they can get for their customers. Providing a vital service for the areas they serve, small cable operators should not be discriminated against because of their size."