TV Executives Warn FCC Against Mandating Cable a la Carte
Executives of ESPN, Disney/ABC, MTV Networks, NBC Universal, Turner Broadcasting and Fox are taking the unusual step of publicly warning Federal Communications Commission Chairman Kevin J. Martin about any attempt to force a la carte programming distribution on cable providers, calling it “troubling” and “devastating to consumers.”
“If your plan is ever adopted, consumers will be outraged,” the executives said in an FCC filing today.
The executives were reacting to reports that Mr. Martin was considering regulations that would allow cable providers to remove from basic packages any channel demanding major price hikes in negotiations and offer it separately to subscribers.
Mr. Martin has expressed concerns about cable price hikes and suggested that cable viewers would be better off if they could pay only for the channels they watch.
Cable networks and the cable industry have argued that packaging channels to consumers keeps costs down while ensuring that consumers have an array of programming choices.
FCC officials saw the filing late Tuesday and didn’t have any immediate comment.
Today’s filing was signed by George Bodenheimer, co-chairman of Disney Media Networks and president of ESPN and ABC Sports; Judy McGrath, chairman-CEO of MTV Networks; Jeff Gaspin, president-chief operating officer of Universal Television Group; Anne Sweeney, co-chairman of Disney Media Networks and president of the Disney-ABC Television Group; Phil Kent, chairman-CEO of Turner Broadcasting System; and Tony Vinciquerra, president-CEO of Fox Networks Group.
They questioned the legality of the FCC mandating a la carte and strongly warned that the net impact of making channels a la carte would be to raise the cost of each channel while giving consumers fewer choices.
“The perverse result of your proposal is 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,” the executives said. “Only the rare consumer who decides to take a handful of a la carte channels would end up paying less than they pay today … and even this consumer may not be better off as programming quality and choice suffer.”
“Consumers would be worse off because they would have fewer programming options under your proposal,” the letter continued. “Many new and diverse programming services, particularly those aimed at underserved and minority audiences, would not have been launched nor would they survive in a mandated wholesale or a la carte environment.”