NCTC to lift membership moratorium, but are telcos eligible?

The National Cable Television Cooperative (NCTC) will lift an almost three-year long moratorium on new members beginning in January of 2009, raising the potential prospect of an infusion of telco members into the group’s ranks. In a seemingly defensive move against competing telecom service providers, the cable consortium closed its doors to new members in 2005.

The NCTC is in a difficult situation in that its core membership is made up of small cable companies who are facing increasingly stiff competition from telecom upstarts. A spokesperson for the NCTC said that no new member guidelines have been finalized at this point. The NCTC always evaluates applications on a case-by-case basis, he said, and it will continue to do so for those that qualify after the moratorium is lifted. If the NCTC welcomes IPTV providers, it could be a turnoff to current cable members. Yet, as an organization, the NCTC must also pursue its own objectives of prospering in the future, Bernie Arnason, managing partner at Pivot Media, pointed out.

“I wouldn’t be surprised if they lifted it,” Arnason said. “I think the telco side of the business is the one that represents the most growth opportunity, and so, for that reason, it doesn’t surprise me that they would lift it because of the potential growth opportunity with the telecom sector….From a strategic point of view, how else will they grow their aggregate subscriber base?”

According to the NCTC spokesperson, the official reason for the 2005 suspension was so the organization could undertake a thorough review of all its membership policies. Now, as the review is approaching completion, the NCTC anticipates receiving and reviewing applications for membership this coming January. Application materials for new members will be made available in December, the spokesperson said.

The NCTC has been providing video content to its 1,100 small cableco members and some telcos operating traditional cable companies since 1984. The members ban together to negotiate content deals with TV programming providers that it can, in turn, offer in the aggregate to its members. When the NCTC closed its doors to new members, rather than seeking programming content directly from cable networks or other content providers, many telcos turned to the National Rural Telecommunications Cooperative (NRTC), which began offering its own IPTV content package – IP Prime – in partnership with SES Americom in 2006.