Paying the Price for TV Choice

Mar 6, 2006  •  Post A Comment

To empower consumers, cable TV operators might consider blocking cable programming that subscribers don’t want in their homes-and then reimbursing them later for the value of the blocked programming.

That proposal-considered impractical by industry insiders-was floated by Federal Communications Commission Chairman Kevin Martin last week during hearings before the House appropriations subcommittee.

“More needs to be done to address consumers’ concerns,” Mr. Martin said during the hearings.

Key cable TV industry sources said the FCC chairman’s reimbursement proposal would make it extremely difficult for cable networks to set ad rates and would create billing nightmares for cable operators.

“It sounds great until you try to figure out how it would work on a practical level,” a cable TV industry source said.

In the interest of promoting consumer choice, Mr. Martin also has been encouraging cable TV operators to offer their programming a la carte-giving subscribers the right to choose and pay for only the programming they want.

In addition, he has urged the cable TV industry to offer tiers of family-friendly programming.

The cable TV industry opposes a la carte, contending that it would devastate their business, require consumers to pay more for fewer channels and even force some fringe networks out of business.

In an effort to meet the concerns of Mr. Martin and other industry critics, Comcast, Time Warner Cable and other leading multiple system owners have agreed to offer family-friendly tiers.

“I am always going to continue to urge the industry to try to provide the consumers more in the way of a more robust family tier, more control and more choice over their programming,” Mr. Martin told reporters last week.

But critics contend that the cable family-tier packages unveiled thus far don’t include enough sports and other top cable programming to make them a viable option for more than a handful of consumers.

“It’s a good first step,” said FCC Commissioner Deborah Taylor Tate of the family tiers, during a National Association of Broadcasters-sponsored conference last week. “But at the same time, I’ve been saying, ‘I don’t think you’ve gone far enough.'”

In his remarks to reporters, Mr. Martin indicated that he viewed the reimbursement model as a form of a la carte, one of several ways cable could meet his interest in seeing consumers get more choice.

“The most important thing is for consumers to have choice-more choice-and I think you could still do it in a variety of different ways,” Mr. Martin said.

The National Cable & Telecommunications Association declined comment.