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Cable industry disputes 'a la carte' pricing study

The cable industry on Wednesday launched a fresh attack against efforts by U.S. regulators who are pressing them to sell channels individually, or a la carte, refuting a study that said consumers could save money that way.
/ Source: Reuters

The cable industry on Wednesday launched a fresh attack against efforts by U.S. regulators who are pressing them to sell channels individually, or a la carte, refuting a study that said consumers could save money that way.

The Federal Communications Commission last month issued a revised report that said consumers could see their cable bills fall as much as 13 percent if they pay for only the channels they want, contradicting an earlier FCC report that said prices would rise.

The National Cable & Telecommunications Association and the Walt Disney Co., which owns the popular ESPN sports network, argued that the revised reports did not fix the calculations properly and prices would still go up.

“A correct analysis concludes that mandated a la carte would be more expensive for consumers and result in less choice and shrinking diversity in cable programming,” Kyle McSlarrow, president and chief executive of NCTA said in a statement.

They argued consumers who subscribe to digital cable service could get at most 14 channels without prices increasing, instead of 20 channels in the FCC’s latest report, and that it would spell an end to niche programming.

The industry also countered that the FCC failed to consider the benefit of consumers casually watching channels and that a per-channel system would roil the advertising market since advertisers count on potential viewers.

“A lot of channels would simply not survive,” Disney’s Washington lobbyist Preston Padden said, noting its popular Disney Channel once was a la carte but now was part of packages.

FCC Chairman Kevin Martin has pressed the industry to offer consumers a la carte so they can block programming they may find objectionable. Cable companies have offered packages of family-oriented programming but have refused a la carte.

However, Martin has acknowledged that the agency did not have the authority to require cable operators to offer a la carte.

An FCC spokeswoman was not immediately available for comment.