AT&T Backs a la Carte Cable

[SOURCE: USAToday, AUTHOR: Leslie Cauley]
AT&T is throwing its weight behind the push to give consumers a choice of cable channels, telling the Federal Communications Commission that it wants to offer a la carte programming to its video customers. AT&T plans to start selling video services later this month. But to sell its TV services a la carte, AT&T would need the cooperation of programmers -- who have so far refused. Its decision to embrace a la carte follows the FCC's suggestion that the cable industry stop forcing people to buy bundles that include TV channels they don't want. The main obstacle for a la carte: programming contracts. Programmers routinely bar cable operators from selling channels a la carte. Why? Advertising rates. Cable programmers base ad rates on the number of viewers they reach. The more they reach, the more they can charge. If they allowed a la carte, viewership for many channels would likely plummet. Gene Kimmelman of Consumers Union says: “This is the essence of how they squeeze extra revenues out of consumers.” The problem could worsen, he warns, as cable operators -- as well as broadcasters and satellite TV -- pack on more channels. “The bundles get bigger, and prices go up,” Kimmelman says. “A la carte would blow this scam out of the water.”
http://www.usatoday.com/printedition/money/20051201/1b_att01.art.htm