Posted on 03/16/2006 7:52:23 AM PST by Wolfie
Cable industry disputes FCC's findings on pricing
NEW YORK (MarketWatch) -- The cable industry joined forces with Walt Disney Co. (DIS) Wednesday to point out flaws in a recent Federal Communications Commission study that concluded it would be beneficial for consumers to pick and pay for channels separately.
The companies released findings from two separate studies, both of which said consumers would be worse off by following the FCC's recommendation. The FCC concluded last month that viewers' bills could decline by as much as 13% if they were allowed to pick their own channels, reversing the agency's earlier view under former Chairman Michael Powell.
"The FCC report is fundamentally flawed," Disney Media Networks co-Chairman George Bodenheimer said in a statement Wednesday.
A spokesperson for the FCC was not immediately available for comment.
The studies, which were conducted by Steve Wildman, an economist at Michigan State University, and Jeffrey Eisenach of CapAnalysis Group, an economic and regulatory consulting firm, stated that the FCC's study presented little in the way of facts and instead "relies on speculation and assumptions." Viacom Inc. (VIA, VIAB) said it also commissioned an independent study, which, though not yet complete, came up with similar findings. According to the studies, the FCC overstated the number of a la carte channels consumers would be able to buy. Moreover, the FCC ignored evidence about how a la carte is harmful to advertising revenue and "fails to provide any facts to support its position."
"It's disappointing that the updated FCC media bureau report relies on assumptions, not facts, which are way out of line with marketplace realities," Kyle McSlarrow, head of the National Cable & Telecommunications Association, said in a statement.
The FCC's report was roundly criticized last month by most of the cable and media industry, which warned that a la carte pricing would disrupt the current business model that determines advertising rates based on the viewer base for a particular channel or show. If viewership of those channels were to suddenly drop, advertising revenue would drop, forcing companies to hike rates for specific channels. Those costs would get passed on to consumers in the end, companies contend. Consumers currently pay cable and satellite companies for a predetermined package of channels - basic, expanded basic or one of several premium choices. Consumer and family advocacy groups have lobbied against this business practice, which they say forces consumers to pay for channels they don't want or that they find morally objectionable.
The FCC previously sided with cable and media companies and concluded that viewers would wind up paying more for fewer channels if allowed to handpick channels. But then earlier this year, Chairman Kevin Martin said he'd re-examine the issue and soon afterward, the FCC reversed its earlier finding and said viewers could subscribe to as many as 20 channels, including six broadcast signals, without seeing an increase in their monthly bill. Under pressure from the FCC, cable and satellite companies recently introduced new family-friendly programming packages that feature mostly G-rated content. The packages were seen as a compromise to ward off a la carte pricing.
My comcast is nearly $45 a month and I watch about a 3rd of the 50 channels they give me.
We have 72 channels on Cox. We watch no more than 15 or so during a given month. All the rest are blocked because they are worthless trash.
All cable needs is local competition among providers.
The Feds want to unbundle services in lots of industries it seems... if only we could pay for Government services al a carte.
My cable company doubled my monthly payment. No warning. I now have Directv.
Surprise! Surprise! I didn't need any convincing but now I know that it would be cheaper to pick channels separately. I don't like to pay for channels that I never watch but I really resent having to pay for the most objectionable ones.
When this comes to pass the golf channel dies.
Snort.
A la carte's coming, whether they like it or not...
As a general rule: ANYTHING the Government does will cause the price to go up.
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Exactly - our Washington parasite pols call it REFORM...
I just don't see it being any cheaper without Gov't price controls. The cable company's cost is the same whether they pump one show or 100 through the cable to your house.
Whether its overpriced to begin with or not is another discussion.
You mean that people who watch golf on TV wouldn't be willing to pay enough to support the channel? My wife watches golf regularly but has never played. I'm sure she could find something else to watch.
I don't know. There's big bucks at stake. My money's on the big bucks.
The vast majority of cable subscribers would not watch the golf channel if htey paid you to. It will die as well as several of the home shopping channels. If I could choose what I got they certainly would not be on it.
Consumers will get what they want sooner or later. Sooner if the gov't would butt the Heck out.
Do we really need an economist from Michigan State University telling us network/cable TV is NOT a bunch of crap. I strongly resent having to buy/finacially support 60-70 channals in order to have access to the 5 at most that are fit to watch. Like most rational people, I find most of the channals that come in these cable packages to be worthless trash. I hope the FCC sticks to its guns on this and does something useful for a change.
Let's hope!
Beware of what you ask for. You might walk into the room and find her watching Lifetime....
In other words, there is nothing you can do to get cheaper prices. We are going to stick it to you no matter what.
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