Copps Mulling Wholesale A La Carte Mandates
FCC Democrat Weighs Cable Provider, Distributor Concerns
By Ted Hearn -- Multichannel News, 1/29/2008 4:54:00 AM
Washington -- Federal Communications Commission Democrat Michael Copps said Tuesday he was still debating whether to force cable programmers to wholesale channels on an individual basis to cable and satellite TV operators.
“I think we're having a lot of meetings with a lot folks to understand exactly what is involved. I think we all understand some of the problems that creates,” Copps told reporters in his FCC office. “I’m trying to get a full understanding of both sides of the issue before we opine much further on it.”
FCC chairman Kevin Martin, egged on by small cable operators, is proposing rules that would deny the Walt Disney Co., for example, from bundling ESPN2 and ESPNEWS in a package with other Disney-affiliated networks and offering the whole thing to distributors on a take-it-or-leave it basis.
Copps’s tentative approach for now could be encouraging to cable because he has been an eager participant in Martin’s extensive anti-cable agenda. Martin went after cable starting in late 2005 after the industry refused to allow consumers to buy all cable channels on an a la carte basis.
Copps indicated that he was sympathetic toward the American Cable Association’s concern that large program providers effectively force pay-TV distributors to license more channels than they want to buy, with carriage of cable channels tied to permission to carry local TV stations.
“Do folks seem to have legitimate arguments, smaller operators about the cost of these [channels]? Yes,” Copps said. “So I think we need to do something.” But Copps did not say that by “something” he meant wholesale a la carte mandates.
Requiring wholesale unbundling without FCC regulation of the per-channel prices would seem susceptible to evasion, especially because programmers could defend their bundling strategy by charging exorbitant a la carte rates.
To the extent the FCC imposed wholesale a la carte, Copps said he believed it could be done without price controls.
“I guess it depends on how your craft the rules. I would imagine it’s within the ability of us to craft some rules that wouldn’t necessarily go to regulating price by price,” Copps said.
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Mike, the whole issue is about choice; i.e.: what grocery store forces you to buy green beans, apples, and bread with your 1/2 pound of hamburger, which is all you wanted in the first place.
Do we force subscribers to price support networks that are unwatched & unwanted, to feed the masses? In my view, a resounding "no!!".
Bundling & tying other programming to retransmission consent of local broadcasting or premium programming at the wholesale level is the clear culprit, as the ACA has pointed out.
In re: the proported "studies" that indicate significant per-channel price increases - follow your nose and smell the rat: studies interpreted as the interpreter chooses to interpret them. Best example that I can throw out there is that the free market will dictate what consumers will pay before they go back to OTAR reception along with pure, uncompressed HDTV in the process.
If those who desire the programming won't support the cost to produce it, then maybe the business model that said it should have existed in the first place was wrong and it should die it's own death.
LarrytheSatelliteGuy - 1/31/2008 11:15:00 AM EST -
Sorry I can't direct you to the research, but there was a study done last year which demonstrates the fact that IF the cable marketplace became a straight, a la carte, cafeteria-style market, the actual impact on costs for ALL cable subscribers would GO HIGHER, and very quickly, with many of the smaller channels simply going away.
There is NO market, or appetite, for the smaller cable networks. They merely go along for the ride with the major TV programming in a bundle of channels priced right now into the overall price. I really hope people who are arguing for this cable cafeteria to get open for business have thought it thru.
Thanx, Mike Broderick
Mike Broderick - 1/30/2008 1:40:00 PM EST
