If theresl members an issue. We deal with them. Relationun the media ships. So a lot of markets with weekly daily newspapers, we would talk to the press. Run our dcnally office which means i come down on the train a lot to dc. Peter do find in the cable business that its the state and s or the federal regulation that you spend most on . Our time i think in the last two to its been the federal regulations. There was a movement about six, eight years ago to move to state franchises to allow competitors like at t and verizon to come into the business. That had the effects of limiting some of the interaction localave with communities, streamlining the process for getting in those markets. That in a lot of ways lesson ed the burden on our team. But federally theres been a big lately to regulate the internet. So we spent a lot of time here talking about that. Would you describe the state of the cable business or media com in particular . Tom were seeing tremendous on the broadband side of our business. Its been a fabulous product for us. Grow. Oing to continue to but on the video side weve seen a steady deteriorationation in lot ofrs and theres a reason for that. Pricing of the product is one of the reasons. The channels have become very expensive. Plus theres a tremendous amount of overthetop competition from Companies Like netflix or hulu, more recently sling, a dish company, directv launching over the top product, and i think just this week youtube tv launch ed. Have amazing amount of competition. And i think some of the some of our customers go to those places. Some of them say its just too expensive, well find our entertainment elsewhere. Peter also joining us is matt ceo of theident and american capable association. Whom do represent . Matt we have about 800 members the United States of america in all 50 states. Territoriesumber of serving about 7. 5 million customers, providing phone, service. D broadband weve been around for 24 years. We just had our 24th annual d. C. Whereashington, 24 years ago independent Cable Operators came together and said we have to have a voice in washington. So since then weve been fight ing for independent compan ies who primarily work in rural areas. Ts and were not the Biggest Companies out there but were out there services, the key Key Communication services, the small markets, rural areas, competitive areas, throughout the country, helping to solve. He Digital Divide peter are the interests and concerns of your companies the same as say a comcast or charter matt in many ways they are. The issue for us and our members cable American Association focuses on the im pact, oftentimes, of regulation on smaller businesses primarily because in our markets we have fewer customers per mile sameonsequently the regulation might have a higher cost of compliance per subscriber. So that means a long longer term on regaining our investment. Means that it is more difficult to have the available resource that we need to provide service that our customers want. So the impact of regulation important to, very determine in a small market or rural area about whether or not isnt. Nity is served or peter mr. Larsen mentioned deterioration in the video business. Is cord cutting a thing thats to continue . Is there any way to ameliorate that . Matt i think its the video issue of our time as consumers arn they have choice, using consume over the top video whether its through a netflix, amazon prime which i was watching as i came down on the plane today. And i love to use it. Gives consumers more choice, something that they wanted for a long time, more control from the bundle of cable linear programming. So, yes, that is an issue of our time. Our members, however, i think are very aggressive in how they provided consumers that they serve with more choice through on demand, through overthetopof services, making sure that their broadband plan is fast enough to a consumers video habits. So, yes, its a thing thats happening today. Shaving. Ing, cord but as an industry, our members are well primed to be able to their customers with their Broadband Service that allows them to consume the video they want. Peter tom, are you partnering with some of the otts . Tom we sell or we deploy tivo boxes. Has been a great part americas a great technology. Format they sort of will place hulu or netflix or an can seam the customers lessly transition between subscription and. Verthetop subscriptions separate from that well build our network directly to them so that it lessens the burden on the public internet and improves the sort of quality of service. Hat our customers receive peter why not skinny bundle Cable Company . Tom mostly because the program mers dont want to let us it. They would rather continue to reap the cash from that model or and grow outside of that platform with other new er overthe207 providers. If we were able to offer a skinny platform, we would be channels. Op they are dont want any channels dropped. They want the same number of channels carried. Our customersof to pay for those channels. If we were able to go with our customers would have more choice and would be able to drop programming each thats something they dont want happen. Peter why not a la carte . Reason. E same its the company that control the content that control the distribution rights. Been difficult enough to create a skinny bundle to give consumers more choices because of provisions in carriage agreements that require carriage of a service to x amount of subscribers. And if you go below that certain amount of subscribers that are penalizedthen youre for it from a rate perspective. So its very difficult from the standpoint of an operator to create those choices for consumers. But back to your earlier question, i think consumers are getting the choice in the a la carte that they want through through their laptop , through their cell phones as they watch overthe top service that we are able to help deliver with our broadband network. So we are part of that process. To be partcontinue of that as we give our customers more and more of the broadband want, and capacity they which comes back to your earlier question about regulation and regulations need to be such that our members are incented to invest more into their broadband plan. From multichannel news reporting on your recent summit, the erosion of video subscribers topics discussed as the American Cable Association faithful and members Cable Television cooperative ascended on washington for their annual summit. Indeed, some Cable Operators such as cable one have abandoned marketing of Video Services because of high costs and focus exclusively on broadband and phone. An important issue many of our companies are look at today and no doubt toms company as well. Video business we consider ourselves cable guys, to be honest with you. Business tothis provide cable linear service. But with the advent of broadband provide phone service as well as now broadband high speed internet. The cable business isnt what it because of the high costs, increasing costs of not only cable programming, sports programming, broadcast programming through re consent. Ion and as a business it is failing. It is very, very difficult for a cable operator in many cases to even break even on the cable side of the business, which is why broadband is so important, giving consumers more of a choice that we cant give them broadbandhrough the pipe. So i agree with the article. I agree with the statement that this is a very difficult thing. Our companiese of are looking at primarily focus maximizing broadband knowing that cable is something weve tried to deal with, tried choice, but we have little ability to do it because of those who control the content peter tom is video a losing proposition for mediacom . Tom its our worst product. Makes the least amount of money. A bigs always been revenue driver for us. It creates revenue. Its paid in a lot of ways for network that is able, today to deliver broadband. So were not ready to abandon it yet. A challenging business. We wish and hope that our Business Partners on the some dayng side realize that its been a great ride for all of us for a lot of years. Lets not end it now. Lets try to make this thing work. Of that i think has to do with pricing. We need to be sensible about pricing. Have unlimited pocketbooks. Peter how do you get to a model then . Ng tom i think by getting rid of some of the networks that just dont make sense. Theres a lot of youre starting to see that today. Esquire,ivot, aljazeera and some of these networks have gone away. Theres probably more trimming of those networks that could happen. I think weer thing, need to have a really serious look at what were spending on country. This the amount of money that the broadcasters, espn, some of these Regional Sports networks are shelling out for the rights games are absurd. Concept ofo sort of cost paying because they just pass it on to consumers. Understand the impact of their reckless spending. If they were a little more sens how they spent, i think it would be better for all people in the paid tv universe. Peter matt when it comes to economies of scale, a comcast or charter can essentially deliver product cheaper. Correct . Is that a fair statement . Matt very fair. Peter so what happens to the smaller operator . Represent so that you matt challenges have never been an issue for us. With always had to deal them. Ive been with a small cable operator in this industry since 1986. A Small Business has never been without challenges. Does show the sticktoitiveness of our members who work everyday in their communities where theyre committed, live and work. But it does make it difficult. As i mentioned before to deal content, thee of bundle of programming, to deal with the heavy cost of regulation, particularly that weve had to sort through over the last eight years where we best to provide consumers the service that they want, have want, has made it very, very difficult. Broadband is certainly something members feel very passionate about. They see it as their future. Why wee of the reasons were so concerned over the last few years when we talked about ii and Net Neutrality regulation. Not that we as isps, internet were going toers, block or discriminate or engage in any paid prioritization. Didnt do that then and dont now. But when you reclassify and im heavy, onerous regulation s on Small Businesses, it has a disproportionate impact and thats what we want to dis courage so that private networks can work with consumers to give consumers the protection and the services that they want and that to deliver toried them. Mood at thiss the years summit opposed to last year . Bit more upbeat. Theres a difference in philosophy at least now when we administration, the new fcc, the new leaders in congress. Peter, that i think that there is going to be all of these changes that somehow are benefit smaller businesses , independent Service Providers where now we have a whatever weto do want. The regulatory legislative process is hard. Its difficult. That over 24 years and we know that we have to work very, very hard as an association to win a better balance to the regulations that eightmposed over the last years. So were very hopeful working with the fcc, with congress, the administration that we can provide some better balance primarily for a company like mediacom encourages their investment into investment into their plant rather than into the cost of regulatory compliance. We think we have the opportunity achieve that over the next four years but we know its not going to be easy. We will be in the fight, however i can assure you of that. Fcc chair larsen, the spoke at your summit. What did hear from him that you agreed with and what made you concerned . Tom clearly hes a hes de regulatory. So there was a lot of last minute regulation that occurred at the end of chairman regime. S heard was, you know, expect Less Government in your business. Now, in some ways i think hes still not going to address some are reallyes that important. The cost of carrying broadcast tonals is hugely important us and our companies. Its the Fastest Growing cost of our business. Him to dopect anything about it short of some major event in the marketplace. Regulate ready those or is that just an agreement between you and the broadcasters a negotiationly between us and the broadcasters. Although they pretty much have the leverage because they can stations. Ck out their and as youve seen this year already theres been 143 black outs which the most ever in a year before was 2015, 192. Were a little over three months in and already at 143. Recordoing to smash that by a long way this year. Some majorrt of marketplace event, i dont see the new chairman doing anything issue. Hat i do see him, i think, letting the market work more in the internet space. Think the market from our position, the markets worked really well. It inspired a lot of innovation. I think 20 years ago everybody would have said the Cable Company is a monopoly. Today in the video space. Today that argument cant be made. There is satellite competition. Theres overthetop competition it seems like theres a new provider every day. So thats all been done in an open, free marketplace that was networks we built. So i think he recognizes that the market work if it can work. Last year put title ii into motion. Mediacom do in preparation for a potential ii . E tom its hard. I think we had to take a gamble on whether to invest in our network or not. And our chairman decided that despite all of the regulation that was happening at the federal level, he was going to toe gamble and decided invest 1 billion over three years to become the first cable america to go all 3. 1 bit. Really means all giga so we prepared our network last year. This years were launching giga network speeds. Weve done 500 communities already this year. Well do another 900 by the end the year. And were going to be the leader space. So from our perspective we were very concerned about title ii but because were privately held , we had a gentleman that could gamble and say im going to bet on common sense coming this marketplace and bet on our customers and bet on your network. O he made the investment peter so does a charter, time cable merger hurt media com . The sense that we compete directly with them. I think what it does where it the volume discounts that they get for programming get greater and the prices we up higher. We end up what happens in the video marketplace is the big guy thet the best prices and programmers look to the littlest guys to make up the difference. Price will disproportionately get higher. So the markets we serve, which small, ruralally markets, will pay more than an urban market. Different Digital Divide. Its a pricing divide. You combat, how do that . Matt i think we just have to continue to serve our customers way that we possibly can, which our Member Companies togiven their commitment their marketplaces and where they live and work and provide , while at the same time we have a very active and engag ed voice here in washington try to win better regulatory treatment of smaller businesses. Thats a really important point the companies that are in the marketplace to solve the are notdivide issues the large companies. Its the small companies. So we have to be committed to our communities. Be committed to investments. Thats why its so great to hear what mediacom has been able to achieve. Those things would not happen without the ability to know that hopefully a Bright Future and the ability to innovate, which i think there greater opportunities for our Member Companies. So right now its just continue in ourhat were doing marketplace, fight for our businesses, and realize that we be part of the solution in solving the Digital Divide. Peter one of the conditions for the merger was lifted by the fcc charter. Ldout by do agree with that . Matt absolutely. Flabber gasted by the fact that they would pose as a condition to limit anticompetitive to require a merger the merger participants to over build other existing providers. To us. No sense whatsoever. So we were very pleased when the fcc under chairman pie reversed that condition and took that condition away. Have fought this battle time and time again not only from a standpoint of dealing with large merger combinations but also in significant billions of dollars government funding of broadband in areas, taxpayer used to overbuild media com and many other members where broadband already exists today through the goodness of is said, look i want to do this. They werent told to do it. They didnt ask for money to do it. It. Did they shouldnt have to face governmentfunded overbuild. So fortunately that condition of charter merger was removed. I think its the right decision. Peter a recent the Washington Post article, seven in 10 support option of internet finding a pew study that said seven out of 10 people believe that city should be able internettheir own network. Do agree with that . Tom i dont. It time and time again in our markets and it just doesnt work well. Theres a perfect example in lake county, minnesota, where weve been overbuilt with i grantit was a 70 million from thecombination 2008 stimulus package. And what was said to the time was, hey,t were going to take this money and not spend any of your money. R since that time i think theyve spent an additional 30 million of taxpayer money bringing the total to 100 million. And all theyve gotten out of probably 4,000 4,000 , 5,000 homes that werent soved before with 100 million to serve 4,000 households. Its a terrible waste of money. In this poorpayers county of 15,000 people are going to be stuck paying this debt for their lives, for their kids lives. Theres no way to pay it back with the amount of people they. Ave thats the problem with taxpayer money. Its easy to find by raising taxes. And unlike your cable bill where you know what youre paying every month, these hidden costs areovernment networks hidden in your water bill, your electronic bill electric bill property tax bill. You just dont know what the real cost is. Who do consider to be your competition . Tom a lot. Satellite companies, dish and direct v. In iowa in particular, there are l