Monday, December 05, 2005

Yes for "a la carte" cable options


I am writing to offer my enthusiastic endorsement of FCC Chairman Kevin Martin’s suggestion of “a la carte” cable subscription options. As quoted in a Washington Post story by Arshad Mohammed [Business D1, Nov. 30] Martin’s Nov. 29 testimony to the Senate Commerce Committee Open Forum on Decency, “concludes that purchasing cable programming in a more a la carte manner in fact could be economically feasible and in consumers’ best interest.”

From a consumer’s perspective, I could not agree more. A la carte pricing, the cable subscription option whereby consumers pay for only the channels they want is the saving grace many consumers have been waiting for. Because I choose not to pay for offensive programming, I have been forced to refuse cable television altogether. Even basic cable packages include networks that air offensive or self-serving programs. It won’t be enough for the cable industry to self-regulate because I don’t believe they’re acting in the public’s interest in the first place.

Consider the arguments the cable industry executives use against a la carte pricing. “[I]t would reduce their advertising revenue [gasp!] and crowd out niche channels that would not attract enough viewers to survive if sold on their own.” Well, as a consumer, neither of these seem to affect the public interest. That is to say, most existing customers will likely keep their standard package for the flat rate – it’s hard to believe niche channels (most of which are owned by larger media conglomerates anyway) will suffer unnecessarily from a la carte pricing. In fact, the “niche” channels are simply a vehicle for advertising sales as I will explain below.

The cable industry is not entirely threatened by a la carte pricing as it turns out. Just a few days after Martin’s testimony, Cablevision Chairman Charles Dolan said he agrees with Martin that a la carte pricing is in the best interests of the consumer. As quoted on, Dolan states,

our experience indicates à la carte will result in a more affordable service for all with more programming options. [Chairman Martin’s] approach, in our view, is consistent with the best traditions of retailing in this country. Consumers should not be obliged directly or indirectly to buy services they do not want. Cablevision has expressed its support for à la carte over the years and in earlier testimony to Congress. We hope Chairman Martin’s remarks encourage a move by the industry in this direction.

But the odds are against the industry taking this action on its own. In a piece by Leslie Brooks Suzukamo,
Industry analyst Josh Bernoff of Cambridge, Mass.-based Forrester Research explains that networks force cable companies to buy their lesser channels in packages along with the good ones in order to sell more commercials. A la carte pricing would jeopardize this guaranteed advertising and he says, “the industry would do almost anything to prevent it.”

In a piece by Paul Kapustka,
another protect-the-status-quo research house, Legg Mason,
said in a report Tuesday that several economic factors -- including the fact that many cable channels might go out of business in an a la carte scheme, or that cable prices might rise -- will keep such ideas out of upcoming telecom reform legislation. "For now, the economic realities of such a requirement are likely to be too problematic for Congress to agree on legislation," the Legg Mason report concluded.

I’m struck by the argument this pro-industry report suggests: to save cable channels that might go out of business in an a la carte scheme, consumers must continue to subsidize “niche” channels they don’t even want – just so they can watch programs on a few channels they do want. What happened to free-market competition? If the channel can’t make money on it’s own merit, wouldn’t the invisible hand of capitalism replace it with a better alternative? Why are consumers obligated to pay for unwanted channels just to enable the industry to make more money?

It’s obvious that the cable industry does not want to cater to consumers, they want to sell advertising - but what recourse do consumers have against the giant media oligopoly? Several lawmakers including Sen. John McCain (R-AZ) are favoring a la carte pricing but because so many in Congress are bought out by or invested in the entertainment industry, we’ll have to wait until the new FCC report on a la carte pricing comes out.

In the meantime, I would urge those who want the right to refuse offensive media in your own homes to contact the FCC and your legislators to tell them this is option is important to you.


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