Policy

Martin Calls for Rate Transparency

12/14/2006 1:22 PM Eastern

Washington -- Federal Communications Commission chairman Kevin Martin said Thursday that consumers should know the wholesale price of cable networks and should be allowed to piece together their channel lineups to better budget their cable spending.

“I’ve been saying for over a year that there is a significant problem in the video area,” Martin said at a telecommunications conference here. “I think that at the very least, we should be able to have a transparency and how much each of those channels is costing, so we are able to see what those costs are.”

Since taking office in March 2005, Martin has stumped for cable a la carte -- a system that would allow consumers to pay for channels one-by-one as an alternative to the purchase of large programming tiers.

“I think we should go even further and I think not only should it be transparent to the consumer how much you have to pay for each channel, but I think consumers should be able to say, ‘I don’t want that channel and I don’t want to have to pay for it.’” he added.

The cable industry has said that an a la carte system would be inefficient, causing cable bills to rise instead of decline. It has said that the tiering system allows new channels to find an audience without spending large sums on marketing, and that tiering provides a stable home for niche networks that wouldn’t have much of a chance in an a la carte arena.

But Martin said tiering has a serious downside: Consumers can’t get refunds for channels they elect to block with cable-supplied digital set-tops.

“They just want you to have to continue to have to pay for it,” he added.

Martin said that while cable operators cite rising programming costs for higher cable bills, they don’t give subscribers a chance to bypass expensive programming.

“It cannot be that they both blame increasing costs on programming and give consumers no options to control those programming costs,” he added.

Martin said greater competition in cable markets and the spread of Internet-protocol-television technology should result in greater consumer choice.