Gap grows on how to dish up cable

Nov 30, 2005

Freedom to choose what gets fed into a television set piece by piece is not only better for parents of small children, but also for cost-conscious consumers as well, or so the Federal Communications Commission's chief argued before legislators.

The problem, however, is that in his latest testimony before the Senate Committee on Commerce, Science and Transportation on Tuesday FCC Chairman Kevin Martin directly contradicted what the agency had been calling for only months ago, namely that cable companies should be offering programs by preset bundles in an effort to keep prices down for viewers.

Parents are the first line of defense when it comes to keeping children away from adult content programs, but while "cable and satellite television offer some great family-oriented choices ... parents cannot subscribe to those channels alone. Rather, they are forced to buy the channels they do not want their families to view in order to obtain the family-friendly channels they desire," Martin told lawmakers. The hearing ostensibly was about censoring sexually provocative, violent programming and indecency in the media, but more attention was paid on what the FCC head had to say about the marketing model of cable and satellite companies.

Specifically, Martin said that cable providers could be well-advised to offer solely family-friendly programming packages, or better still, "to offer programming in a more a la carte manner, giving consumers more choice over which programs they want to purchase."

In fact, Martin went as far as to dismiss much of the findings in the latest FCC report on the subject produced in 2004, stating that it presented "only one side of the economics literature." That report found that the average household hooked on cable watches 17 channels and would see its bill rise up to 30 percent from current levels should companies adopt the a la carte system, assuming the average cost of a channel to be about $3.90 per month.

"Based on a more complete analysis of the costs and benefits of bundling and the potential costs and benefits of a la carte pricing, this further report determines that the first report incorrectly found that offering of cable programming in a more a la carte manner would be economically infeasible," Martin said.

Some industry analysts have argued that because Martin himself was appointed to the top spot at the FCC earlier this year, it has been easier for him to distance himself from the earlier report and start afresh from a new baseline.

But many in the cable and satellite broadcasting business are opposed to Martin's a la carte proposal, including the National Cable and Telecommunications Association, which represents major cable and satellite providers that would be directly affected by any legislative changes proposed by the FCC.

"Government pay-per-channel regulation would be likely to hurt consumers by increasing prices, decreasing choice, and reducing diversity in programming, and it would do so in a way that violates the First Amendment," said NCTA President Kyle McSlarrow.

"Mandatory a la carte would be potentially very troublesome for our goal of universal deployment of broadband services. Such a massive government intrusion into how a broadband service like video is marketed, offered, and priced would undoubtedly chill the needed innovation and investment necessary to build out capital intensive networks that rely on the marketplace to determine the most economically effective way to provide a return on investment," McSlarrow added.

Copyright 2005 by United Press International

Explore further: G20 talk fest echoed on Twitter

add to favorites email to friend print save as pdf

Related Stories

Apple's got its eye on mobile games

Jul 17, 2011

In the eye of the typical beholder, Apple's iPhone is simply a popular device, great for fun, on-the-go applications-and phone calls.

Cable 'a la carte' gets boost

Feb 11, 2006

Consumers may find a happier ground with their cable companies now that the recent cable "a la carte" pricing report from the FCC favored allowing cable subscribers to purchase channels of their choosing.

Networking: FCC eyes a la carte pricing

Dec 05, 2005

A new regulation advocated by the chairman of the Federal Communications Commission may change the way cable network providers price services -- leading some to offer programming on an a la carte basis and enabling consumers ...

Recommended for you

G20 talk fest echoed on Twitter

12 minutes ago

Brisbane's G20 Leaders' Summit proved a Twitter talk fest, attracting 1.02 million tweets since October 23.

Automakers aim to drive away car computer hackers

2 hours ago

Against the team of hackers, the poor car stood no chance. Meticulously overwhelming its computer networks, the hackers showed that—given time—they would be able to pop the trunk and start the windshield ...

End to end 5G for super, superfast mobile

3 hours ago

A collaboration between NEC Electronics Samsung and several academic centres in China and Iran, is investigating how software-defined cellular networking might be used to give smart phone users the next generation of super-superfast ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.