Cable industry defends packaging

Would you like MTV with that? No? How about Sci-Fi or the History Channel? If John McCain has his way we (the consumer) may finally be able to watch what we really want. Will it hurt the smaller channels? Until we know all the details about where our money goes once we pay for our ‘basic cable’ service we’ll just have to sift through the information provided until the truth is found. Time will tell.

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Posted on Sun, Mar. 28, 2004

Cable industry defends packaging

TELEVISION:Critics say consumers shouldn’t pay for unwatched channels, while the industry says smaller channels would die in an a la carte system.

BY FRANK AHRENS

WASHINGTON POST

WASHINGTON – In the dream world of some television viewers, they would pay their cable or satellite companies only for the channels they want. Some might not pay for MTV, because they don’t want their 8-year-olds watching it. Others would turn down ESPN Classic, because they’ve already seen the 1975 World Series. Others would eschew TeleFutura, because they don’t speak Spanish.

Reality is far different.

No U.S. cable or satellite company offers what are called “a la carte” plans. To get the Discovery Channel from Comcast Corp. cable company, for instance, Washington viewers have to pay for an “expanded basic” package that includes MTV, FX, MSNBC and 33 other channels.

That may change, if some lawmakers and consumer groups get their way, as the cable industry finds itself under increasing scrutiny. Lawmakers report that their constituents are angry about cable bills that have risen at three times the rate of inflation since the industry was largely deregulated in 1996.

One possible solution being proposed is a la carte cable, a way to give consumers more choice over what they watch and how much they pay for it. But it’s not an answer the cable industry will swallow easily, if a Senate Commerce Committee hearing last week on cable rates is any indication.

Committee Chairman John McCain, R-Ariz., peppered Cox Communications Inc. President James Robbins, asking the head of the nation’s fourth-largest cable company why consumers have to pay for channels they don’t want. Robbins’ answer: Giving consumers that degree of choice would cost too much.

Besides adding to the cost, cable companies say, selling channels individually might make it difficult for lesser-watched, niche channels to survive.

Under an a la carte system, top-rated cable channels such as USA Network would probably thrive because ratings suggest enough people would choose to buy it individually to make it worth a programmer’s while. However, less-watched channels that serve distinct but smaller audiences, such as TechTV and BET, may not survive, because not enough viewers would pay for them. Under the current system, consumers effectively subsidize less-popular channels, which cable companies say provides diversity in the cable and satellite universe.

However, some consumer advocates and members of Congress don’t buy that logic.

“When I go to the grocery store to buy a quart of milk, I don’t have to buy a package of celery and a bunch of broccoli,” McCain said. “I don’t like broccoli.”

McCain said he probably would propose an amendment this year — it could be attached to an authorization or spending bill, he said — requiring cable companies to offer a la carte programming.

McCain is working with Consumers Union, the nonprofit organization that publishes Consumer Reports, to draft an amendment designed to make a la carte available. Gene Kimmelman, director of public policy for Consumers Union, presented senators with summaries of Canadian digital cable plans that allow customers to buy channels a la carte.

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