Last updated: February 21, 2008 - 7:19am
CABLE CUSTOMERS' CHOICES BEING DEBATED
[SOURCE: Associated Press, AUTHOR: John Dunbar]
Sports fans everywhere want to know: "Why do I have to subscribe to the soap opera channel when all I really want is ESPN?" That's the kind of question the cable TV industry hates answering. The channel choice issue comes up every few years, but people who argue that subscribers should be able to choose channels "a la carte" have never made any real headway. The latest effort, and the newest reasoning for requiring cable companies to offer channel choice, or a la carte cable, has to do with yet another issue: television violence. The overall lack of support for a la carte might seem surprising, considering that the average household in 2006 received 104 channels, yet tuned in to only 16 of them. Federal law requires cable companies to offer a bare bones, "basic tier" of service, consisting of local broadcast and public access channels. The second tier, commonly known as "expanded basic," includes most of the major cable networks. There's usually no choice on this tier; subscribers get all the channels or none of them. Beyond that, subscribers may pick premium channels like HBO, that are priced separately. Unlike over-the-air broadcasters, which rely almost entirely on advertising to stay in business, cable networks earn about half their revenue from per-subscriber charges levied on cable system operators. Those costs are passed on to cable subscribers. Two types of companies dominate the cable industry: those that own both broadcast and cable networks (like Walt Disney Co.); and those that own both cable systems and cable networks (like Time Warner Inc.). An a la carte regime would blow up that system and disrupt its economic model. And that would lead -- according to the National Cable and Telecommunications Association, an industry trade group -- to higher prices and less programming diversity. Fewer channels would mean less advertising and fewer advertising dollars. An a la carte system would also require more customer service representatives, higher billing costs and higher marketing costs. These factors and others -- according to the NCTA -- would ultimately lead to higher rates for consumers. The bottom line, though, is there is no way of knowing for sure. A 2003 GAO report stated that "a variety of factors" make it "difficult to ascertain how many consumers would be better off and how many would be made worse off under an a la carte approach." Consumers Union has lobbied long and hard for a la carte, saying it would put a halt to steadily rising cable prices. It has an ally in the Parents Television Council, a group that successfully pushed for higher fines for broadcast stations that air raunchy programming.
TV A LA CARTE? I'LL TAKE THE BUFFET
[SOURCE: San Francisco Chronicle, AUTHOR: Rep Hilda L. Solis (D-CA)]
[Commentary] In 2002, arch-conservative civic groups joined with consumer groups to fight the Federal Communications Commission-proposed "media concentration" rules that would have given large media companies the right to gobble up local print and television outlets. It was a watershed moment -- the kind of left-right consensus rarely seen but fused together over the populist issue of diversity in media. Today, the issue of media concentration is again at the center of a controversial proposal by the FCC that would change how 90 million consumers watch television. The idea is per-channel-charges -- or in the more sanitized lexicon known as Ã la carte pricing for the cable industry -- federal rules which would allow consumers to purchase cable channels on a per-channel basis. A close look at the idea of Ã la carte pricing shows that it would be a disaster for consumers. Most consumers would pay more for less, as the sweeping rules would decimate small and niche cable channels while raising prices. The fact of the matter is this: nearly every study, nearly every major civic group on the political right and left, and nearly every cable programmer who lives in the competitive trenches all have said that Ã la carte pricing is a bad deal for consumers and a poison pill for the cause of media diversity. When it comes to cable programming, I'll take the buffet approach over Ã la carte. On numerous occasions, Congress has made it clear to the FCC and the public its view, to quote old adage, that "if it ain't broke, don't fix it." The chief federal communications' agency out not to be tone deaf to this message.
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