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.
I just hope they keep the current packages available. I can easily see a situation where the 20 channels i want to watch cost more added individually than the 100 channels I now get for $39
I'd love to not have to pay for useless sportscrap, shopping channels and those phony moneygrubbing plastichaired snakefondling flimflam preachers.
It's possible. As long as we're going a la carte, why shouldn't the cable companies be able to charge higher prices for the channels people want most? Supply and Demand, after all.
Wouldn't bother me a bit if the people who wanted to view the trash channels had to pay more for them because I ceased "subsidizing" their menu of crapola............It would be great...............
Without the "subsidizing", most of the trash channels wouldn't last very long, hence the reason they are bundled..............yet another way that the left has others pay for their agenda...............
What the industry is saying, see the insert above, is that they will still find a way to pass the cost of the crap on to all..............this is just one of thousands of examples of why we need good honest people in government.............so they won't get bought off, or bend to peer presure, etc. But, we need bunches of them...........fiscal and social conservatives. IMHO it is the only way to get these kinds of things straightened out.
Yeh. I have 69 in Cox Basic Extended and I watch maybe 20. They have 2 ABC, 2 CBS and 2 PBS, 1 poor quality Fox, plus 3 other 'localized' channels, and just recently added WB and UPN. They did have 2 NBC, but dropped one for a new Spanish channel.
I would gladly get rid of 40 channels, if I could choose which ones.
I would try satellite, but I like cable Internet. Satellite Internet is around $70--way too high.
If/when the developing broadcasts over existing electrical lines become available, they may challenge both cable and satellite. Their Internet, however, from what I've read, is still much slower than cable. My cable internet recently upgraded (at no cost) from 1 Mbps to 4 Mbps.
They claim that if we go to an A La Carte menu, wonderful stations like Lifetime and Home SHopping channel would never exist.
Darn, one less lousy channel to scan past when going between The History Channel, The Military Channel and the Food Network.
What would happen to the ALGORE Channel? Is that even still on?
I hope they never get rid of the Ted Kennedy Drinking Channel. Now thats good TV.
Maybe the answer is to allow cable companies to still have package deals but must also offer individual channels. Options is the right way.
Right! So why not let anyone run a cable to my house and compete? Instead we only have one choice, the one which bribed the mayor and several city officials.
Golf channel is (or used to be) a premium channel on Dishnetwork. It was available ala carte for a while but is now only in the higher end packages. Lots of golf fanatics pay for this.
The shopping channels will never die. They pay to be carried. Money makers for both cable and satellite.
The problem is in how the cable companies receive channels. There are a handful of power networks (The Mouse controlling ESPN, Disney and ABC's cable side; Discovery controlling all the nerd channels except History; Viacom controlling all the music channels; a few others) that sell their channels to cable companies in package deals. If the cable company wants Discovery and TLC (big ratings channels) then they also have to carry the lesser Discovery Network channels or else pay a gigantic premium to get just the "good" ones (same holds for other bundles, can't get ESPN without ESPNNews, Disney without ABC Family). This is all built on the concept that if the channels are there someone will watch. Since the cable company has to pay for these channels they want to pass some of the costs along and might as well make the channels available. Figure if they ever go a la carte those bundles will remain intact, if you want one channel in these bundles you'll have to get them all it just won't be in the cable companies best interest to let you break up bundles that they can't.
(bastards)
Actually, give me more high def channels and I'd be happy camper.
There was a big stink about this a few years ago when some of the cable companies were trying to break ESPNs bundle, both sides were spewing all kinds of stuff to all their people on the web, The Mouse won of course (don't mess with The Mouse). But that's how I found out, being a sports fan I was getting propoganda from both sides.
What if you choice not to have the shopping channels? How much would they pay then?
I made peace with the notion that most everything in life is some sort of racket or another . . . otherwise, you go insane kicking against the pricks.
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