Policy

Cable Leaders Rip a la Carte

5/03/2004 10:11 AM Eastern

New Orleans -- Cable leaders sharply criticized the a la carte mandate, claiming that markets work better than regulation and that consumers are smarter than regulators in deciding what kind of content should be kept from the home.

"The market is a much better mechanism for sorting these things out than a group of people holed up in the seat of government in Washington or wherever," said Time Warner Inc. chairman and CEO Richard Parsons, who kicked off the National Show here on a panel with Comcast Corp. CEO Brian Roberts and, in a surprise, Charter Communications Inc. chairman Paul Allen.

Despite having deep respect for lawmakers and regulators, Parsons said satellite competition from DirecTV Inc. and EchoStar Communications Corp. would have moved the industry toward a la carte if it made economic sense.

"So long as you have competition in the marketplace, the government should let the markets work," Parsons said. "The reality is that there is competition in this marketplace. So I have a big problem with all of this potential government intervention, I'll call it, in tiering, in a la carte, pricing, even -- sensitive subject -- censorship."

Cable is coming under assault from a la carte proponents, who see that approach as a way to keep indecent programming out of homes with children. A la carte supporters like Sen. John McCain (R-Ariz.) are also troubled that parents have to pay cable companies for indecent channels that they opt to block.

Roberts -- who compared the expanded-basic tier to a shopping mall that allows channels to survive because they are bundled together -- said the National Cable & Telecommunications Association did a "super job" with its commitment to offer free blocking equipment to those who need it.

Roberts added that competition was the best answer because cable-rate regulation under the 1992 Cable Act "stifled the innovation" and hurt cable's ability to expand program diversity within expanded basic.

"We are not an unregulated local monopoly. The reality is that everybody in this room can go out and have DirecTV and Dish Network … and a fourth choice in one-quarter of the markets," Roberts said.