FCC’s Martin Touts a la Carte:

Nov 29, 2005  •  Post A Comment

Federal Communications Commission Chairman Kevin Martin on Tuesday criticized an agency report last year that claimed that forcing cable TV operators to offer programming a la carte would result in increased prices for consumers.

“It [a la carte] could end up being beneficial to consumers,” Mr. Martin told reporters after formally briefing lawmakers at a forum on indecency hosted by the Senate Commerce Committee.

Mr. Martin said the report, issued by the agency’s staff during the final days of former FCC Chairman Michael Powell’s tenure, was flawed. The report indicated that a la carte would result in rate increases of anywhere from 14 percent to 30 percent per month for consumers who purchased 17 cable channels.

The Powell report has been widely cited by the cable TV industry as it fights legislative efforts to force cable operators to give consumers the right to pick and pay for only the channels they really want. But Mr. Martin said a new agency review of the study suggested that a la carte could result in lower prices for consumers in many cases.

Kyle McSlarrow, president and CEO of the National Cable & Telecommunications Association, told reporters that despite Mr. Martin’s claims, other industry studies-and one conducted by Congress’s General Accountability Office-show that a la carte proposals would drive up cable’s programming costs and ultimately force some basic cable networks out of business.

“You’re going to end up with people getting fewer channels [and] probably less compelling content, because programmers will have to shift some of the money into making up for lost advertising revenue,” Mr. McSlarrow said.

The NCTA chief also told reporters that his recent suggestion that lawmakers extend broadcast indecency regulation to cable’s basic tiers-with the understanding that the indecency regulations wouldn’t go into effect until the courts ruled on cable’s ensuing constitutional challenge-was based on the assumption that Congress was going to pass an indecency bill.