Editorial — Shedding tiers: cable systems vs. sports nets

May 14, 2001  •  Post A Comment

In an effort to keep cable rates from getting even more out of hand than they already are, cable operator Jerry Kent has come up with a novel approach: Try to get Congress to pass legislation that would let cable systems delete those high-priced sports networks from their basic packages, or tiers, and offer them instead on an a la carte basis.
The president and CEO of Charter Communications unveiled his proposal a couple of weeks ago at a Washington news conference. The idea apparently grew out of frustration over rate increases by the sports networks, which Mr. Kent says have been responsible for more than 50 percent of the double-digit increases in Charter’s programming costs. ESPN, for example, reportedly hiked its rates 20 percent this year to about $1.50 per subscriber per month.
ESPN and the other big sports networks tend to insist that they be included in a cable system’s basic tier, which gives them wide distribution and lets them charge hefty ad rates. But this practice, as Mr. Kent sees it, forces those subscribers who couldn’t care less about sports to subsidize the sports fans.
Under his proposal, sports networks that don’t agree to a la carte carriage would lose their federal antitrust exemptions. That threat would presumably give cable operators leverage to negotiate better terms for themselves and their subscribers.
The proposal is unlikely to get serious attention on Capitol Hill, particularly with lawmakers and regulators more interested lately in undoing regulations than in creating new ones. Never mind that ESPN and the other sports networks would fight such legislation tooth and nail.
It’s just as well: The government has no business stepping in to change the rules when negotiations between cable networks and system operators leave one side or the other dissatisfied. Such intervention would set a nasty precedent. Defining sports as some sort of special cable category requiring government tinkering opens a can of worms. Maybe Hispanic channels should have their own tier, too. And educational channels. And what about music channels and movie channels? Heck, why not go all the way and put shopping channels on their own planet?
Breaking off the pricey sports networks may not be a bad idea. But getting the government involved would be just plain crazy. If the cable industry really wants to keep rates as low as possible for subscribers, it should find a way to get the job done on its own. Cable operators need to stare down ESPN and the other sports bullies and insist on terms that better reflect the interests of all cable customers.