Consumers Benefit from A La Carte

[SOURCE: Federal Communications Commission]
On Thursday, the FCC's Media Bureau released a report that concluded, "Whoops, we goofed." The report finds consumers could be better off under a la carte and explores several a la carte options that could provide substantial benefits to subscribers by increasing their choices in purchasing programming. But not long ago the FCC released a report saying a la carte is no good for consumers. Check the date is this 1984? Thursday's release describes a number of errors in the Booz Allen Hamilton ("Booz Allen") Study that the Media Bureau relied upon to support the conclusion of the earlier report that a la carte is not economical. The report finds that the 2004 report also relied upon unrealistic assumptions and presented biased analysis in concluding that a la carte "would not produce the desired result of lower rates for most pay-television households." The new report identifies mistaken calculations in the Booz Allen Study, which was originally submitted by the cable industry for Commission consideration. Booz Allen itself acknowledges the errors, which other economists also have confirmed. The new report explains that the Booz Allen Study failed to net out the cost of broadcast stations when calculating the average cost per cable channel under a la carte. As a result, the Booz Allen Study overstated the average price per cable channel by more than 50 percent. The Booz Allen Study significantly underestimated the number of programming channels that a subscriber could enjoy under a la carte while still achieving savings compared to the subscriber's current multichannel video programming distributor ("MVPD") fees. Indeed, correcting for this mathematical error, consumers' bills decreased by anywhere from 3 to 13% in three out of the four scenarios considered in the Booz Allen Study.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263741A1.doc
* Statement from FCC Chairman Kevin Martin:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263746A1.doc
* Links to new report:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263740A1.pdf
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263740A1.txt

** Regulators making mistakes? A regulatory fix to help consumers save money? We smell a story here and we have the links to prove it --

* FCC Releases 'A La Carte' Report
http://www.njtelecomupdate.com/lenya/telco/live/tb-RWQD1139519069159.html

* FCC Report Supports A La Carte
http://www.broadcastingcable.com/article/CA6305927?display=Breaking+News&referral=SUPP
(free access for Benton's Headlines subscribers)

* FCC Study Boosts a la Carte Pricing
http://www.multichannel.com/article/CA6305989.html?display=Breaking+News
(requires subscription)

* FCC: Cable 'a la Carte' Would Save Money
http://news.yahoo.com/s/ap/20060210/ap_en_tv/cable_tv_pricing_4;_ylt=AmOK9JQazHvG_KujTWwBZBpsaMYA;_ylu=X3oDMTA5bGVna3NhBHNlYwNzc3JlbA--

* FCC Says a la Carte Cable Channels Could Cut Prices
http://www.bloomberg.com/apps/news?pid=10000087&sid=adFW8TZ0V1c0&refer=top_world_news

* À la Carte Pricing May Cut Bills For Cable Customers, FCC Says
http://online.wsj.com/article/SB113949907169169617.html?mod=todays_us_marketplace
(requires subscription)

* FCC Sees Cable Savings in à la Carte
http://www.nytimes.com/2006/02/10/business/media/10cable.html
(requires registration)

* Cable by Channel Could Be Cheaper
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/09/AR2006020902055.html
(requires registration)

* Study: A la carte cable would be cheaper
http://www.usatoday.com/printedition/money/20060210/1b_alacarte10.art.htm

* Study Finds Savings in Cable Choice
http://www.latimes.com/business/printedition/la-fi-cable10feb10,1,352113.story?coll=la-headlines-pe-business
(requires registration)