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FCC a la carte Report: ‘Relies on assumptions that are not in line with the reality of the marketplace’

ico_10.gif Today, the FCC released the “a la carte” report that its chairman, Kevin Martin, promised in the Senate Commerce Committee’s Open Forum on Decency in November. Surprisingly, the report contradicts a 2004 FCC report by then-chairman Michael Powell and another independent report requested by Senator John McCain (R-AZ) and issued by the Government Accounting Office. Unlike those findings as well a large body of analysis by other academic economists, the Martin report claims that cable customers would pay less if allowed to choose channels individually. Minutes later, Senator McCain announced he would ignore his GAO report and the 2004 FCC analysis and introduce legislation requiring multi-channel video providers to offer consumers an a la carte option.

The head of the National Cable & Telecommunications Association (NCTA), Kyle McSlarrow, vehemently blasted the new FCC report. “Most studies conclude that a mandated a la carte regime would be more expensive for consumers and result in less diversity in programming. It is disappointing that the updated Media Bureau report relies on assumptions that are not in line with the reality of the marketplace.... The notion that the government knows better how to improve on a competitive marketplace is not supported by the evidence,” McSlarrow said in a statement. [Click here for the NCTA brief, "The Pitfalls of A La Carte."]

Of course, this unwarranted interest in a la carte got turbo-charged two years ago by the “wardrobe malfunction” at the Super Bowl halftime show. Ever since, the rhetoric has been loud and fairly constant, fueled in huge part by a small band of special-interest activist groups.

Over the past few weeks, at the urging of the FCC, several cable and satellite providers (including Cox Communications) have announced family friendly packages of G-rated networks ideal for those customers most concerned about what they consider indecent programming. Those packages aren’t even commercially available yet, so the timing of today’s FCC announcement would seem to raise several questions. Are family tiers being declared dead before consumers have had a chance to try them? Or will they ultimately be deemed sufficient? Obviously, we’ll be following the issue closely, looking for answers.

It's important to note that, in addition to developing family packages, we at Cox – as with other cable providers – have also worked hard to educate our customers about the many tools they have at their fingertips to manage what their kids see, and don’t see, on TV. Our research has found that parents believe it’s their responsibility to manage their kids’ access to mass media, but they want help. We’ve provided help in the form of the comprehensive Take Charge! program. Similarly, the entire cable industry has introduced Cable Puts You in Control.

We think giving customers the tools to manage their families’ mass media experience, and educating them on how to make the most of those resources, is a better answer than government mandate. And in this instance, a government mandate that would violate constitutional protections related to property rights and free speech guarantees. We think it would be akin to the government telling newspapers they have to sell only the comics, or the crossword puzzle, or the sports section, instead of the whole newspaper.

Posted on February 9, 2006 05:10 PM | Comments (0)

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