>> what is the company? nctv.e company is >> how long? >> my father and mother started 50 years ago. we started our 50th anniversary. >> how many customers? 47,000ave about commercial and residential customers in ohio. of the issuesme that you deal with changed over the last 20 years? >> oh my gosh, it is hard to know where to start. obviously the biggest issue of changing the last 20 years has been the addition of broadband internet service. we look at ourselves now as a broadband company rather than a tv company. , likeost of the industry most of our member companies, we

have more internet broadband customers than we have other customers. that is universal. peter: matt said, do you provide dfull spectrum -- that said, provide a full spectrum of cable tv options -- do you provide a full spectrum of cable tv options? >> yes. a fiber rich kovacs -- coaxial design. we have full service on television, two way, home gateways, video on demand, local advertising. we do everything the large cable tv operators do, just better. same: do you face the regulatory issues that comcast would face? >> yes, we do. technically we do. there are certainly some

exceptions that have been negotiated or created over time. i like to think we do not face the same scrutiny. one because we mind our peas and q's. -- p and peter: is a profitable? >> absolutely. peter: is cable tv profitable? >> it depends on how you define cable tv. i don't know that the television element on its own is highly profitable. the content costs have become high. for example, our basic cable tv service -- the usual 100 channels cost about $85 now. that is before set-top boxes. our cost, for the content only is more than $50. almost $56. that leaves a small portion that

electricity, trucks, people, gas, benefits, wages, repair. a i were trying to operate 45,000 subscriber cable tv system in today's world it would be pretty hard to do just with cable television service. you were quoted recently in a news article saying as far as television versus internet is concerned, it is the internet. that is the future. >> absolutely. we are making plans now to be -- to build a gigabit fiber overlay over the entire system. it will take years and cost millions. that is where the future lies. the television ecosystem seems to be so badly i won't say broken, but distorted. coursen an autopilot

towards being unaffordable in small towns like ours. not by me, but by consumers. peter: what does that mean for consumers who want to have cable tv? of anhink the crisis affordability or affordability that is coming is -- has to become nationwide. people will hit smaller markets like ours first because it is more expensive for us to provide the service because we have fewer homes per mile. but also because the consumers have less income. if you compare a map of ohio to medianor los angeles, income might be $35,000 compared to $55,000. is more difficult for people in smaller communities to afford cable tv. peter: -- >> consumers will solve it themselves. toy will stop subscribing

the expensive satellite delivered programming and rely more on accommodation of television, that we can deliver in a broadcast bundle, and supplement that with what they watch from the internet. peter: you talked about some of your costs? what makes up those costs? is it the cost of buying television from lifetime or whatever channel. is that the cost of providing local stations? >> it is a next. -- mix. the program content is about $56 per customer per month. that is a combination of broadcast television as well as satellite. the bulk of the dollars are for satellite networks. is aroadcast television smaller dollar amount, but growing the fastest. they started at the lowest. it is on a curve going upward. the toughest element to deal with i would say is regional

sports. we have three regional sports networks. in a short order they will be $10 per customer per month. it is the largest thing low-cost. -- single cost. peter: how much of that is ohio state's proximity? >> if i think about it in terms of rate -- probably 35%. the cleveland indians have a channel, the cavaliers have a channel, the big ten have a channel. those three, all owned by fox, are probably the most problematic. they are the three really extensive channels but under one company. referenced the aca, that is the president of the american cable association. you just had your annual meeting here. from bob?ou hear

story from all of our members. we are in many territories. our 800 member companies we have half of the members with 1000 customers are fewer. 80% of those have 5000 customers were fewer. they are made up of traditional cable operators like bob, who is the chairman. andave municipal providers companies that were telephone providers. we have small businesses providing advanced communications in smaller markets all across the room -- country. that is why we come to washington to tell our unique story. we have been doing it for 23 years. peter: do you face the same issues with the aca that they face of the -- that they face with comcast? matt: we do work closely with the industry. as bob mentioned, his family has been involved in cable and -- for many years. many of our members founded

cable in their areas. we still do that and provide that service today. we are very involved and invested in the cable industry. whatdependent operators, we have learned in the last 23 years is washington pretty much operates on a one-size-fits-all basis. and are smaller markets, in unique areas, there is a difference. in many cases, and bob's community and others, you get 20 homes per mile, not customers. with competition today you might be down to 15, 12, or 10 customers per mile. they cost the same about to provide that service over a smaller area. we have always said, regulation is applied this proportionately to our members. that is why we need to fight. what is at stake is our customer's broadband future. that is why we are here at the summit.

peter: one of the issues discussed at the conference, skinny bundles, all of cart arte issues, are you in favor? met: absolutely. -- cartei don't believe ala could work. that is my belief. those content companies like turner, that owns a different channels, i think you would have a difficult time forcing them to break up their own bundle. i think that would be difficult. i don't see any reason why we could not have a process that i would call a bundle, a consumer a turner channel, they have to buy all of them. is a be terms set by turner. the same goes for viacom, espn,

disney, and so forth. peter: if they did not want sports channels, with their costs go down? bob: it is very collocated. -- obligated. -- complicated. what complicates it is the requirements established by the programming networks themselves. they do not allow us to break up the bundle. fox and all of requiretworks, they that they be carried on the most widely distributed level of service. so does everyone else. is thisend up with bundle of bundles that everyone has to take. as an operator, i would love to diss aggregate that bundle and sell it to people as they wish. of course most consumers do not recognize if that happened, the

price of the individual channels or the bundle of channels is going to skyrocket. those companies have to make their targets for revenue, or they cannot pay for the content. everyone uses espn as an example. espn was a six dollar a month for customer channel. if you made it available ala c arte and half of the people took it, it would be $12 a month. if a quarter of the people took it it would be twice for dollars. $24. then you look at advertising revenue. fewer potential eyeballs means higher rates. more expensive. peter: what is the aca position on bundles? met: -- matt: we believe choice is important. consumers are using their

iphones, cell phones, tablets. they are enjoying choice. they're coming to us saying, can you give us more choice on cable television? i think choice, the desire of consumers to watch more choice is really going to move towards greater choice. maybe even ala carte because consumers will demand it. they like to watch the programs, they like to watch when they want to watch on the device they want to watch. they will force us to think about how we can make a difference. that is what the sec has noticed -- fcc has noticed. for the first time they're asking questions about how are these programs bundled? what are the requirements that operators deal with. how can independent programmers have more of an impact eating their channels -- programming on the channels.

bob: consumer choice and being able to pay for what you want is probably the number one consumer client or question about television. they say, i cannot afford this much. i don't watch most of these channels, why can i not just by what i want, pay for what i want , and take the rest of the stuff away for me? as cable operators and local operators who really are concerned about consumers, we would be fine to deliver that. we simply cannot do that because of the restrictive contracts required by the content providers. espn and youere an said, no we will not carry, we cannot afford it. i would say, some of the big guys can. i will say goodbye to those 40,000 customers and not worry bob: there have been

cases where a number of our members have dropped popular programming. they have done well. : they think consumers get it. now get the fact that right because these restrictions that bob is talking about, they have to buy a bundle of programming at a high and increasing rate. what they want are smaller bundles, greater choice and greater possibility. -- flexibility. that is what you have members trying to launch skinny bundles. trying to give consumers more choice. at the same time it is the largest content programming companies that are fighting that opportunity that our members are trying to get to customers. is a huge issue. it really comes back to what we as smaller providers are trying to do. we are trying to give our customers what they want. we have worked with them for years. they have enjoyed the bundle.

we talk about how we as small providers have watched independent programmers. many of these independent programmers today are part of large conglomerates. we have been part of that ecosystem and we have always wanted to give customers what they want. right now they say it is too big, too expensive, we want more choice. we are trying to give it to them. peter: michael was on the program a couple of months ago. we talked about set-top boxes. he said his numbers would love to get rid of those boxes. -- his numbers would love to get rid of those boxes. it is a frustration. do you agree? a big dealhas been of discussion about set-top boxes. i think it starts with the basic misunderstanding of what is included. $250 not just a minicomputer that we are buying and putting in someone's home. there are data cost associated

with it. there is a user interface cost. there is also the service element. a call center that will answer your call and explain how to use it. technicians that will come to your home and plug it into the wall, and put new batteries in your remote control. all of those costs add up so fast. after five or six years you will replace it. the set-top box charges we have right now cover the cost of the box. there is not a highly profitable part of the business. it is very complex. consumers do not want to learn how to use it. they call us. we have this constant churn of service calls to support them. consumerwas an easy interface through an application on a small tv or a tablet that consumers like and enjoy, great.

we don't need to keep making them millions and millions of dollars of capital investment in new customer equipment every year. fcc on the, the recent vote on that box -- set-top boxes said it was for increased competition. are in agreement saying this is a problem in search of a solution. solution in go, search of a problem. chairman wheeler has talked about this rulemaking as unlocking the box. it is actually in our view, opening a pandora's box. this is so big, to create a standard which is yet to be determined about what box technology should be in the home. gateway devices, what reconfigurations? what new types of mandates will be imposed on cable operators?

we have no idea the capital cost imposed on a company like bob's that will actually take away broadband investment which the fcc says is the most important thing for memories to do. -- members to do. we do not believe this is sensible. frankly, when i look at the impact on our members, it will once again have that is proportionate impact on smaller providers. that is why we said it is not a good idea. peter: why cannot somebody have an app? bob: if you go to the place around the corner, they have a nice exhibit. there must be four or five different commercially available set-top boxes that run apps. tivo, gameple tv, consoles, smart tvs, blu-ray players, chrome cast, all of

those represent a new way of watching television on connected devices. there is not a government mandated standard by which to do that. that is the part becomes difficult. if there was a government mandate, until last year when congress wisely said, do away with it, it is not working. this seems to be a continuation of an effort to say, let's have a government mandated technology platform that consumers have already chosen not to purchase. matt: rather than unlocking the box, we agree with the commissioner who said, they don't want a box. the fact is our members are providing a choice through competitive set top boxes, apps, giving choices,

and coming back to the customer -- being part of that relationship with the customer to determine what is it that they want most, and how can we provide it. the fact of the matter is, if this rulemaking goes forward, we will spend years, we will spend hundreds of millions, if not billions of dollars in the old cable card regime, which congress, two years ago said, you need to get rid of it. has not worked, it has not created that competitive set-top box market. congress basically said, let's get rid of the cable card. fcc, if you want a study on what downloadable security going forward, that is fine. choices, and coming back to the customer -- being part of that relationship with the customer to determine what is it that they want most, and how can we provide it. the fact of the matter is, if this rulemaking goes forward, we will spend yearsbut it did not o make a numeral -- a new rulemaking. as anith that, we industry have come to the commission and said, we have other proposals we would like you to consider in addition to the set-top box proposal. however, that is not part of the rulemaking. it is really the one way set-top box rulemaking they are talking

about. they would impose hundreds of millions of dollars. we think it is time for chairman to embrace the issues that we have brought together. said i hope we have industry collaboration. we are here to collaborate, if they listen. peter: who is your competition? in theday my competition television market, dish network, .irectv, time warner, and at&t we also have centurylink and frontier as internet and phone competitors. at&t also fixes -- fits in. we have some larger backbone type providers for big pipe internet. peter: what about chrome tv,

apple tv, roku, netflix? are they competition? bob: i consider them come in entary.- complim i want to make a great broadband products that consumers know they can use. i try to make a distinction between tv and video. tv is an old-fashioned linear television network that people know traditionally. there is video, which is more dynamic, library concept. i want consumers to know that my broadband, has the best infrastructure on which they can choose to find tv or video they want. if somebody says, i like broadcast tv from you, netflix for other content, more power to them. we would love to work with netflix to incorporate an app on our set-top boxes.

devices,er consumer but we cannot attract their attention. peter: are all of those companies readily did the same -- regulated the same? matt: for the most part. when we talk about internet, orderand, the fcc imposing title to regulations on member companies -- here again, we have members through their own desire, the government did not need to tell them deploy broadband. we have been connected to provide rock band. the government -- to provide broadband. the government puts at risk billions of dollars of capital. we have small companies across the country today launching gigabit service, not because they were told to, but does they wanted to -- but because they wanted to. the issues that matter for our future, we talk about broadband connectivity, giving consumers

the capacity and speed they want, looking at broadband future we are in sync together and fighting for that future. bob: you used a pronoun, those companies. which company? the chrome cast, and netflix? or infrastructure competitors of directv and dish? peter: i will let you define that. bob: if i have a grave concern about the internet, it is the network neutrality -- that the open internet order created, did not do its job. it does not address the entire network. i think many consumers have been fooled into thinking that network neutrality applies to the whole network. it is not. -- does not. are two gates to the internet, i am one of them, i am and i speak -- an isp. thate other end is a gate

allows content onto the internet. it is that gateway controlled by the so-called virtuous providers. those are people like netflix, viacom, cbs, google and so forth. related by the network neutrality. by gate that is controlled the network provider -- by the edge provider is unregulated. redirectfree to block, for paid prioritization. it is definitely a tilted playing field. my concern is that edge providers are going to start to cableize the internet. that envisions the a time when edge providers come to the isp and demand payment, otherwise

the content will be unavailable to the consumers. that has already happened. it has happened in exchange for cash. it has happened as leverage in negotiations. i am afraid that when the really big edge provider gets a hold of that concept, like a facebook, they can add dollars of cost to every single internet subscriber over which they have no control. for content they have no interest in. we have talked about the issues you face of the sec and washington -- fcc and washington, but what about the state of ohio? has -- local franchise we have about two dozen local franchises, no problem. we are local, 155 local employees. involved for been 175 years. we focus on those local communities. we don't have any issues there.

is one of a ohio handful in a country that have statewide franchising. the state of ohio is our franchise and authority. we appeal to them for our local franchise. because of a abundance of competition with -- especially the television market, directv, dish, at&t covering the whole state -- the state assumes that competition will dictate the winners and losers. they do not feel the need to be intimately involved in what we do on a day-to-day basis. we pay a franchise fee to our local communities. the selection of programming services, setting up rights, and establishment of service policies is all up to the local company. peter: we have about a minute left. what is another major issue discussed at your meeting?

matt: transmission consent. the ability under law for broadcasters to demand payment or consideration in return for allowing us as cable operators to carry their broadcast signal. it has been an issue since 1992 that has continually and increasingly harmed consumers. historice been a amount of blackouts where broadcasters have blacked out the signal because they could not reach an agreement with the cable operator. a historic amount of blackouts. the federal communications commission, to its credit, has toertaken a rulemaking create greater balance so consumers are not harmed by blackouts. we expect to see something over the next few months that would prohibit online blocking which bob talked about. a broadcaster could not block online content as a result of a retransmission dispute. could not pull a signal before a marquee event like a super bowl or oscars. march madness for instance.

other sensible ideas to create greater balance and get consumers out of the middle of this negotiation. that is the big one we have talked about and will continue to talk about until we get the problem fixed. peter: does retransmission queue up at night -- keep you up at night? bob: yes. we have absolutely no leverage when it comes to a broadcast television network. there is no leverage. a good friend summed it up this way, we pretend to negotiate. we go back and forth a few times, eventually they say, this is it, take it or leave it. it does keep me up at night. not because of the cost, but because -- negotiations, because of the impact on the consumer -- customers. when they wake up on january 1, and their television station is missing. i have no option to negotiate with another station of the same network because of the

individual feeds that have been created. peter: do you see a day where your tv station at sibley and isp.- is simply an bob: my daughter joined us a few years ago, i think that was a -- that is a problem she will have to deal with. i don't think that will happen during my tenure or lifetime. of nasa lynnent cable -- masolin cable. this has been "the communicators " on c-span. >> c-span, created by america's cable companies 35 years ago, and brought to you by a public service by your local cable or satellite provider.