Programmers' A La Carte Letter
-- Multichannel News, 4/15/2008 5:43:00 PM
April 15, 2008
EX PARTE
The Honorable Kevin J. Martin
Chairman
Federal Communications Commission
445 12th Street, S.W.
Washington, D.C. 20554
Re: Review of the Commission’s Program Access Rules and Examination
of Programming Tying Arrangements, MB Docket No. 07-198
Dear Chairman Martin:
We were concerned to read of your recent comments in which you proposed that channels above a certain price threshold could and should be distributed a la carte by government mandate. Leaving aside the Commission's complete lack of legal authority to impose a la carte or price controls, and the fact that Congress has rejected such proposals on a bipartisan basis and expressly asked the Commission to focus on the DTV transition instead of distractions like a la carte, what is most troubling about your proposal is how devastating it would be to consumers.
Specifically, your proposal would result in popular networks that consumers expect to be widely available being stripped out of the expanded basic service, thereby forcing consumers to pay an extra charge to watch them. As your comments make clear, government intervention into wholesale or retail programming decisions inevitably leads to price controls. Moreover, the perverse result of your proposal is that 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.
As has been shown by numerous studies, only the rare consumer who decides to take a handful of a la carte channels (fewer than most consumers watch today) would end up paying less than they pay today for the entire array of channels in the basic and expanded basic packages. And even this consumer may not be better off as programming quality and choice suffer under government mandated a la carte.
In fact, all consumers would be worse off because they would have fewer programming options under your proposal. 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 retail a la carte environment.
If your plan is ever adopted, consumers will be outraged. As we and all credible experts have consistently concluded, consumers will pay more and get less under government mandated a la carte.
Sincerely,
George Bodenheimer Judy McGrath
Co-Chairman, Disney Media Networks Chairman & CEO
President, ESPN Inc. & ABC Sports MTV Networks
Jeff Gaspin Anne Sweeney
President & COO Co-Chairman, Disney Media Networks
Universal Television Group President, Disney-ABC Television Gr
Phil Kent Tony Vinciquerra
Chairman & CEO President & CEO
Turner Broadcasting System, Inc. Fox Networks Group
cc: The Honorable Michael J. Copps
The Honorable Jonathan S. Adelstein
The Honorable Deborah T. Tate
The Honorable Robert M. McDowell
Ms. Marlene H. Dortch
