Programmers Challenge FCC Chairman
Top execs from five major cable programmers blasted Federal Communications Commission (FCC) chairman Kevin Martin over a recent proposal linked to one of his most favorite subjects -- à la carte programming.
Earlier this month, Martin, a vocal advocate for an à la carte regime, is taking another stab at it, reportedly suggesting that operators should be allowed to strip from expanded basic tier any network that required a monthly carriage fee of 75 cents per sub or greater. If adopted, such a regulation could affect some of the most popular networks on the cable dial.
In an ex parte filing dated April 15, execs from ESPN, Universal Television, Turner Broadcasting, MTV Networks, Fox Networks Group, and Disney-ABC, argued that such a move would be harmful to consumers.
"Leaving aside the Commission's complete lack of legal authority to impose à la carte or price controls, and the fact that Congress has rejected such proposals on a bipartisan basis and expressly asked the Commission to focus on the DTV transition instead of distractions like à la carte, what is most troubling about your proposal is how devastating it would be to consumers," the group wrote in its challenge of Martin's plan.
They claimed that stripping "popular networks" from the expanded basic service would force consumers to pay extra to view them. "Moreover, the perverse result of your proposal is that the most successful and most watched programs and networks -- typically those that invest the most in quality programming -- would be penalized for their popularity to the detriment of consumers."
They also noted that studies have shown that only in rare instances would consumers end up paying less under an à la carte model than they are today for the channels presently offered in basic and expanded basic packages.
"If your plan is ever adopted, consumers will be outraged," the programmers insisted.
Well, perhaps not all of them. Survey results from Forrester Research Inc. published last year revealed that 53 percent of consumers would be interested in getting their cable programming via à la carte. But there was a significant disconnect on the perceived value of such an option. Forrester said those surveyed (in 2006) were willing to spend an average of $24 per month for 26 channels -- 53 percent less than they paid at the time to get just one-fourth the number of channels. (See Survey: à la Carte Value Vexes Consumers.)
The cable industry has also argued that à la carte would harm programmers and kill off networks that focus on niche subjects. A recent study from Yankee Group Research Inc. backed up that notion, finding that a pick-what-you-want TV model would create "economic ruin" for programmers, and cause the number of national video programming networks to be cut from 565 to about 30.
― Jeff Baumgartner, Site Editor, Cable Digital News