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Friday, November 30, 2007

National Review on FCC's Cable War
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As I mentioned yesterday, James Gattuso and I penned an editorial for National Review this week about the growth of FCC regulation and spending in recent years. In the op-ed, we also noted that, "For whatever reason, a disproportionate number of these [new regulatory proposals] have been aimed at cable television, so much so that press and industry analysts now speak of Chairman Martin’s ongoing 'war on cable.'"

Today, the editors at National Review have chimed in with an editorial of their own on the issue entitled, "Pulling the Cable on Martin’s Crusade." Specifically, the editors address what most pundits believe really motivates the Chairman's crusade against cable: His desire to force cable companies to offer consumers channels on "a la carte" basis in an effort to "clean up" cable TV. "Martin should abandon this particular crusade," the NR editors argue. "While we are sympathetic to parents’ desire to get the channels they want without having to buy access to racier fare, using economic regulation to restructure an industry is the wrong approach." They continue:

For TV programmers, the practice of bundling channels together works well. Religious and minority-oriented channels can piggyback on the popularity of the sports and news channels. This is why the Faith and Family Broadcasting Coalition, a group of the nation’s leading religious broadcasters, opposes efforts to impose à la carte programming. Not enough consumers who currently subscribe to the basic-cable bundle would buy religious programming under an à la carte model.

All channels thus benefit from the bundling model, which allows them to access households that might not otherwise be interested in their programming. For this reason, TV programmers have signed contracts with cable companies that prohibit à la carte sales. Forcing the cable companies to ignore these agreements would amount to a wholesale overwriting of private contractual arrangements. Supporters of à la carte have failed to demonstrate a need for such dirigisme. If consumer demand for à la carte options is sufficiently strong, there is no structural impediment to the market’s satisfaction of it.

Some social conservatives argue that parents should be able to buy the Disney Channel without having to let MTV’s 24-hour sleaze-a-thon into their homes. But parents who wish to shield their children from immoral influences are not without options. They can monitor their children’s viewing, block channels, or forgo cable (or television) altogether. We realize that the existence of these options falls short of a comprehensive solution to the difficulties of raising children in a culture that sometimes seems hostile to the enterprise. But the answer is not a mandate that would trample private contract rights and drive religious programming off the air.

Nevertheless, Kevin Martin has pressed forward in his attempts either to force the cable companies to adopt an à la carte model or to scare them into doing so. At Tuesday’s meeting he tried to use an arcane provision of federal communications law to declare the cable market uncompetitive and subject to more FCC regulation. This would arguably give the FCC power to impose à la carte pricing, though it would be challenged in court. But even without that authority, the FCC would still have more power to make the cable companies miserable until they acceded to Martin’s demands.

Fortunately, a majority of his fellow commissioners saw things differently and scuttled the plan. But Martin has signaled that he intends to persist. He does not seem to grasp that the government cannot just pick and choose, à la carte, which private contracts it intends to honor.

This gets it exactly right, and it closely tracks the argument I set forth originally in my PFF paper, "Moral and Philosophical Aspects of the Debate over A La Carte Regulation."

posted by Adam Thierer @ 12:33 PM | Cable , Communications , Mass Media , The FCC

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I have to say that we should investigate the competition in cable systems in the US. As of now I can et television services through only one provider, Cox Communications, or satellite, which unfortunately my apartment complex does not allow and falls outside the cable arena.

If the a la carte methodology were to have cheaper prices then I would be in full support. However, as the cable companies are saying it will be more expensive it either will be because it is truly more expensive or more expensive because cable companies have made it so. Whichever case the cost would heavily influence my choice.

Would it really be more expensive to have a la carte cable? I don't understand how really. Presently you can choose which package you wish to subscribe as well as any premium channels. So, move that process completely online to allow for customers to subscribe to a set limit of channels. Have the little check boxes just like when you first order cable service, but allow the customer to select all the channels. If the customer wishes to change the channels then allow them to do so every 30 days or 60 days. (Arbitrary numbers)

In all honesty I don't like paying for television channels that are religious, as I am not a tele-religious person. I also do not like to pay for channels that are in languages other than English, because I only speak English. The argument that bundling the channels is beneficial to all is slightly misleading. It benefits some more than others. Let the market, id est customers, decide which channels are worthy to broadcast.

The fundamental change in this approach is to take away the role of information gatekeeper away from cable companies and shift it to the consumer like most other industries in the US. It is not difficult to see why anyone would not like to loose this great deal of power on a person’s information access.

Posted by: Wyatt Ditzler at November 30, 2007 2:56 PM

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