Do You Support “A La Carte”
Television Pricing?
Are you a WECN reader who subscribes to satellite
TV or cable? If so, you might be interested to know that an
issue is brewing before the Federal Communications Commission
(FCC) to require pay-television services to be priced on an
“a la carte” basis, or in other words, you would
pay for each channel you wanted to watch, rather than for a
“bundled” package of channels that you may or may
not watch.
FCC Chair Kevin Martin took many by surprise
on November 29, 2005, when he announced his support for “a
la carte” pricing and indicated that the FCC will be reporting
on this issue to Congress.
Some parent advocates believe consumers should
have the ability to only purchase the channels they want because
they could then block their children from being exposed to racy
or violent content. I understand their viewpoint because I have
not always found it easy to keep my children from watching some
less than tasteful programming—on MTV for example.
While the FCC plan could affect both satellite
and cable industries, the news media to date have mostly reported
on the cable companies’ strong opposition to this proposed
pricing change. Cable spokespersons argue that the bundling
of channels actually reduces consumer cost. They also argue
the price for some consumers would increase if channels were
separately priced. Looking behind these arguments, the Wall
Street Journal reports that industry analysts are concerned
individual pricing would dramatically shrink cable’s audiences
and hurt cable revenue. This would happen because advertising
rates are based on viewers. If viewership falls for certain
channels under “a la carte” pricing, advertising
revenues would fall as well. Finally, the National Cable and
Telecommunications Association states: “We don’t
support un-necessary government intrusion into private marketplace
negotiations.”
A recent study indicates that the average
American household watches 16 channels. The same study estimated
that consumers would probably subscribe to nine individual channels
on an “a la carte” basis. Pricing varies greatly
between channels. For example, the Wall Street Journal reports
that ESPN costs cable operators about $2.50 per subscriber per
month, while MTV costs less than $.70 per subscriber per month.
Consumers Union, the Consumer Federation of
America, cable operator Cablevision Systems, and AT&T join
FCC Chairman Martin in his call for “a la carte”
pricing. However, current federal law does not allow for individual
channel pricing. Therefore, Congress would need to approve FCC
Chair Martin’s proposed change.
What do you think? You might want to give
your opinion to the FCC by providing your thoughts directly
to Chairman Martin at his e-mail address: KJMWEB@fcc.gov.
