November 22, 2024
Business

A la carte cable may be on table Congress wants study on TV bundles

AUGUSTA – Key lawmakers in Congress have asked the Federal Communications Commission to study whether it should stop cable and satellite TV companies from requiring customers to buy a large number of channels in a bundle, or package deal, instead of just the specific channels they want to buy.

“It defies consumerism,” said U.S. Sen. Olympia Snowe. “Americans always want choice and they should be able to have it.”

Snowe serves on the Senate Commerce Committee that has jurisdiction over cable and satellite TV issues. In a recent interview, she expressed frustration that consumers are still being forced to buy packages that include dozens of channels, when they want to buy only a few of them.

“Consumers are upset about the fact that they cannot make the choices they want,” she said. “We deregulated the cable industry in hopes of creating a competitive industry where consumers would have more choices and lower costs. They are getting wide programming, but no choices and higher rates, so something has gone terribly wrong.”

Companies are currently bundling dozens of channels into packages that consumers must purchase in their entirety, even though they may want to watch only a few channels. For example, companies require purchase of a “basic” number of channels bundled into a “tier” before allowing a customer to buy a premium movie channel.

Gene Kimmelman, senior policy director for Consumers Union, publisher of Consumer Reports, said consumers are demanding choice and control when it comes to the channels and programming they’re paying for.

“By requiring that cable operators offer a la carte programming in conjunction with any other packages they wish to offer, the power of the consumer’s pocketbook can be unleashed to begin to help lower costs, increase incentives for quality fare, and give viewers the opportunity to not pay for channels they find objectionable or too expensive,” he said.

U.S. Rep. Tom Allen serves on the House Commerce committee and shares Snowe’s concern with the bundling of programming options. He says the committee was about to consider an amendment requiring unbundling, but it was withdrawn in favor of a letter requesting the FCC to study whether a la carte pricing is technologically and economically feasible.

“I think we need that sort of study to see what our options are,” he said. “We had testimony before the committee that raised some concerns I think the study will answer.”

Brian Dietz is senior director for communications with the National Cable & Telecommunications Association, which represents the large cable companies. In a General Accounting Office report last year, he was quoted as saying that unbundling could lead to fewer channels and higher prices for consumers.

“We believe that an FCC study would further confirm that a la carte pricing would be very harmful to ad-supported cable networks and consumers by reducing programming diversity and driving up the cost of cable and satellite television,” he said in a statement.

But there is dissension within the industry. The American Cable Association, which represents small cable companies, welcomes both the study and the concept of choice in programming.

“The Committee’s bipartisan letter to the FCC will initiate much-needed scrutiny into the harms caused by the media conglomerates to cable operators and consumers and give Congress important information it needs to evaluate these harms,” wrote ACA President Matt Polka in a letter to the House committee. “ACA is confident the FCC will respond fully to the questions of the Committee, bringing to light important issues that have arisen because of continuing media concentration.”

And at least one of the satellite TV companies said they would like to provide more choice, but are limited by the programming suppliers that force them to provide channels they would not otherwise provide to customers.

“We are eager to provide our customers with the kind of programming they want, the way they want it,” said Steve Caulk, director of media relations at Echostar Communications, the parent company of DishTV. “Unfortunately, our hands are tied to a certain extent when a programmer refuses to provide critical channels unless we agree to package it with other, less-attractive channels.”

Snowe said that while the study is important, she believes Congress will move forward on the issue if the FCC does not. She said the public is outraged at escalating bills and lack of choice.

“We have to make sure there is proper oversight for consumers, oversight that they deserve,” she said.

Allen said he has no doubt Congress will move forward on legislation to address the channel bundling issue. He said the issue concerns everyone who has cable or satellite TV service, which in Maine is estimated at more than 475,000 homes.

“This is an area where the public does care,” Allen said, “and frankly, I think they will keep this issue in front of us.”


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