Cable operators planning to roll out family tiers to appease Federal Communications Commission chairman Kevin Martin still need to nail down agreements with programmers that fear that a restructuring would hurt them financially, National Cable & Telecommunications Association president Kyle McSlarrow said Monday.
As expected, McSlarrow told the Senate Commerce Committee that Comcast Corp., Time Warner Cable and other MSOs serving about 50% of all cable subscribers will offer a "family choice" tier, probably in the first quarter of next year, as their response to concerns about indecent content across the cable dial.
But McSlarrow offered few details about the tier's pricing or channel options. That's because the operators have yet to secure the cooperation of key network programmers.
"I can't sit here and tell you exactly what it looks like," McSlarrow said, adding that he wanted Congress to give the industry time to adopt a plan. "If government intrudes in this space, it will get it wrong."
A family tier priced too high and filled with no-name networks could boomerang on cable. The Parents Television Council, which has blasted sex and violence on cable, said the family tier was doomed to fail and that cable needed to sell every channel individually, not solely in tiers.
Martin -- who has been pressuring cable to offer a family tier or a la carte options -- said in a prepared statement that he was pleased to hear that cable was moving in his direction.
"I look forward to hearing more about the details of their plans and hope that it will provide parents with real options to address parents' legitimate concerns with having to purchase programming that they believe is unsuitable for their children," Martin said.
Comcast and Time Warner are embracing the family tier because they want the Martin-led FCC to approve their $17.6 billion merger to buy Adelphia Communications Corp., a Senate aide said after the hearing.
Senate Commerce Committee chairman Ted Stevens (R-Alaska) also voiced support, saying that he hoped a family tier and a useful ratings system will obviate the need for legislation.
"Some of us don't like that legislation that has been introduced, but I think it would have overwhelming approval here unless some action is taken on a voluntary basis by the industry," he added.
In a warning to cable, Stevens said the industry should not delay implementation of the family tier and should be careful about the price charged.
"I think time is a consideration, and costs will be a consideration," he said.
McSlarrow said cable operators that want to offer a family tier still have "very serious negotiations" with programmers ahead.
A family tier could siphon subscribers from expanded basic, causing some channels to lose license-fee and advertising revenue. Creation of a family tier "has to be a decision that's done in conjunction with programmers," McSlarrow said.