McDowell Concerned About Wholesale A La Carte

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Washington -- Federal Communications Commission Republican Robert McDowell voiced strong doubts Wednesday that the agency should force cable programmers to wholesale their channels on an unbundled or a la carte basis as proposed by FCC chairman Kevin Martin.

McDowell described the cable programming market as "a fragile economic ecosystem" moving increasingly in the direction of allowing consumers to see what they want when they want, especially over the Internet.

"Once we disrupt that at a time when it is being disrupted already through natural market evolution, I am not sure the government wants to put its heavy thumb on the scale," McDowell said. "So I think we have to be really, really careful."

McDowell's comments came in an interview hosted by Multichannel News and Broadcasting & Cable magazines and streamed live over the Internet without charge to listeners. A rebroadcast of the Webinar, called "Rules of the Game 2008: At The Digital Crossroads" will be available after 2 p.m. ET (11 a.m. PT) Thursday at www.multichannel.com/rules2008.

In fielding questions for an hour, McDowell commented on many major media and telecommunications issues before the agency, from the transition to digital television and new cable ownership rules to spectrum sharing of the broadcast TV band and vigilant oversight of the FCC by Congress.

McDowell's remarks about wholesale a la carte mandates put him at odds with Martin, who believes that small cable operators in particular are being forced to distribute more channels than they desire because they don't have the market power to turn down channels offered in a bundle by much larger corporations.

McDowell also indicated that he disagreed with FCC Democrat Michael Copps on a key issue in the debate: Whether the FCC can require a la carte at the wholesale level without capping prices to ensure that the a la carte offering is a realistic option.

"Once you start tinkering upstream [the sale of programming to distributors], all that causes a bellywasher down stream [the sale of programming to consumers] and it could adversely affect consumers' prices adversely," McDowell said.

On Tuesday, Copps told reporters he thought the FCC could achieve its goals without getting into price controls.

The wholesale a la carte issue could be Martin's last big fight with the cable industry in the area of programming. Martin is likely to step down next January with the departure of the Bush administration.

"I would take the chairman at his word. This sort of thing is a priority for him and treat it accordingly," McDowell warned.

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