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FCC Head Supports Ala Carte Cable
Posted by
samzenpus
on Thu Aug 23, 2007 05:12 PM
from the a-little-of-this-a-little-of-that dept.
from the a-little-of-this-a-little-of-that dept.
MikeyTheK writes "PC Magazine Reports that Kevin Martin, chairman of the FCC, supports ala carte cable.
In a letter to several minority groups on Wednesday, Martin said "While I believe all consumers would benefit from channels being sold in a more a la carte manner, minority consumers, especially those living in Spanish speaking homes, might benefit most of all,". He goes on to argue "Cable companies act as gatekeepers into the programming allowed by the expanded basic cable package, preventing independent content producers from reaching viewers,", citing the example of Black Family Television, which was forced to go online-only because cable operators refused to carry it, even after it reached 16 million homes."
Related Stories
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Your Rights Online: Suit Seeks 'A La Carte' TV Channel Choices 350 comments
An anonymous reader writes "A breathtaking lawsuit was filed this week against every major player in the 'for-pay' television industry. Every major broadband and cable company in the US was named in the federal suit, which seeks the right to obtain content piecemeal rather than in the large (and expensive) packages that cable companies offer as the only option right now. This follows closely on the heels of encouraging comments from the FCC chair that he supports this kind of service. 'The complex web of contractual arrangements among service providers and networks amounts to a monopoly or cartel that has "deprived consumers of choice, caused them to pay inflated prices for cable television and forced them to pay for cable channels they do not want and do not watch," [antitrust lawyer Maxwell M. Blecher] wrote in the complaint filed on behalf of cable subscribers in several states. The complaint, which alleges a conspiracy to monopolize as well as violations of federal antitrust laws, names nine plaintiffs, but Blecher wants the U.S. District Court to certify it as a class action.'"
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Your Rights Online: Congress Turns Up The Heat on FCC's Chairman 148 comments
Fletch writes "FCC Chairman Kevin Martin could be in for an uncomfortable spring, as House Energy Committee Chair John Dingel (D-MI) has requested a truckload of FCC paperwork relating to some controversial decisions Martin has made. Those include the FCC's reversal on the a la carte cable issue and newspaper-television cross-ownership restrictions. 'This request has got to be turning the FCC completely upside down. Significantly, it appears to reflect a bipartisan discontent with Martin's performance. Democrats and some Republicans are upset over his recent move to relax one of the agency's key media ownership rules, as well as the rushed manner in which he handled the matter late last year. Other Republicans dislike what they see as Martin's persecution of the cable industry, especially Comcast.' The Committee originally announced its intention to investigate the FCC in January."
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Translation (Score:5, Insightful)
We think that the average household will want about 80% of the channels they got today, generating about 120-130% of the revenue of today.
Re: (Score:2)
Of course they'll make more cash this way. Why wouldn't you be expected to pay more to have a special setup different than everyone else?
I don't see what the necessity for cable/satellite is anyway. My wife is obsessed with TV and that's the only reason we have it in the hou
Re:Translation (Score:5, Funny)
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Re:Translation (Score:4, Insightful)
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Re:Translation (Score:4, Insightful)
There are actually so few channels that have anything I'm willing to expend lifespan watching, much less pay good money for, that I'm pretty sure I will end up paying less. There is one (1) channel that I really want that's in Dish's top tier; if I could buy just that one separately, that alone would cut my monthly fees significantly.
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Re: (Score:3, Interesting)
I hope that it cuts down on the number of folks around the country watching crappy tv once they have to shell out cash for it specifically. If m
Re: (Score:3, Informative)
Video over IP is possible in coax. You use a DOCSIS channel to encapsulate IP packets that encapsulate compressed audio and video. Video over I
Re:Translation (Score:5, Informative)
Take my situation for example:
I can spend $40/month for basic cable, which only gets me my already free over-the-air channels, 10 local public access channels, and 2 or 3 nation-wide basic cable channels (like WGN, CSPAN, and TNT).
I don't watch any of those additional channels, so what's the point?
In order to get the 3 or 4 extra channels I do want (Cartoon Network, Disney, Food, SciFi) I need to buy a $60/month package that gets me an extra 15-20 channels that I don't care for, simply because of how the pricing tiers are structured.
I would be more than willing to buy those 3-4 channels ala carte. I would pay $10/month for those channels as they are things I want to watch that I cannot get over the air. I am not going to pay $60/month (plus fees) to get those channels.
So, the cable company would get another customer, and make more money, by simply offering ala carte programming. I doubt I am the only person in a similar situation.
Alternatives? Satellite, but as a renter, I'm limited in what I can attach to the building, or buying programs individually on iTunes. Other than that, I don't have any legal options, so I just go without.
The same logic is used for music sales. Price an album at $16 and 10 people buy it, garnering you $160 in sales. Make the songs individually available for $1 and 200 people buy individual songs, garnering $200 in sales, simply by putting things in a different pricing scheme. Similarly, it's been noticed that people are more willing to spend $25/month on individual songs, than to spend $40 every 2 months on full albumns.
Parent
I know what I'd get (Score:4, Funny)
Re: (Score:2)
Speaking of 'God' channels, John Safran vs. God [johnsafran.com] is quite good. Was that what you were thinking of?
Personally, I'm interested in more worldly matters. I have an extended cable subscription, but my regular viewing is limited to PBS (news and entertainment), C-SPAN and an occasional Dog Whisperer episode. My sojourns onto other channels mostly serve to remind me how much crap is out there, how often that same crap is repeated, and how much I
And, as a nerd just why do I need 50..... (Score:5, Insightful)
Re:And, as a nerd just why do I need 50..... (Score:4, Interesting)
ESPN is a shining example of why bundled packages don't work. ESPN is one of the most expensive channels for cable and sat companies to offer. This is, in part, due to the huge costs associated with the acquisition of broadcasting rights for various sporting events by ESPN.
It is compounded by ESPN's growth model, which is to spawn more specialized sporting channels that they then shuffle semi-major sporting events to. This was done with ESPN-2 and is now being done with ESPN-U. (see here [scout.com]) So if I want more of the specialized channels *I* want, I end up paying more for ESPN channels I could care less about.
The icing on the cake is this - about seven years ago, I paid over $600 for an ATSC/DVB-S receiver in order to pick up HD stations. The sat provider that I went with offered several HD channels for free. Several more channels were added to the HD package over the years, but the cost remained the same. This continued until ESPN-HD arrived. Suddenly, I was asked to pay a small fee to continue to watch all of these channels.
I subscribed to it for a while, but why? Most of the programming on ESPN-HD was simply upconvered NTSC analog programming. So I dumped it. Kept my sat service for a few more months then dumped it completely. Now all I get are local channels, TBS, WGN and Discovery that come free with my cable company's digital cable package.
Both my cable co and my former sat company bombard me with offers for HD PVRs and several months of free service. Why? All of it except for one or two channels is nothing but junk to me. The only way for me to pick and choose is to get a C-band sat, which my HOA would never approve.
So in the end, this cartoon [photobucket.com] from the CSMonitor sums it all up...
Parent
Re: (Score:3, Informative)
Not sure about C-band but your HOA absolutely positively CAN'T prevent you from installing a smaller KU band dish (thanks to recent federal regulations) and it seems most content has moved to KU-band over the past few years, anyhow.
The problem with a-la-carte... (Score:5, Insightful)
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Nope, EXACTLY the opposite.
It's MUCH easier to convince individuals to pay a couple dollars a month for a new channel than it is to convince a big cable company to pay hundreds of thousands of dollars to be allowed to carry a new channel that there's no guarantee their viewers will want to watch.
The only exception is spin-offs from already-big cable networks... If Viacom starts up anoth
Re: (Score:3, Insightful)
And a la carte solves the problem? (Score:4, Interesting)
Either way, a la carte would end up looking exactly the same...except probably with less variety, since channels that are currently not competing would start.
Of course, I'm with the majority, so it'd be great for me. USA, Cartoon Network, Sci-Fi Channel, and Comedy Central are my channels, and I know that they're all pretty popular. Then again...I wonder what's more popular. It could lead to more of that reality-tv crap infesting my channels. There are already full channels that run nothing else.
Re: (Score:3, Interesting)
In a way, it would.
There are so many worthless niche channels out there that skate by because everyone pays for them, but no one watches them. Who in their right mind would specifically subscribe to the Game Show Channel, the Reality TV channel, or any home shopping channel?
Plus, it might have added benefits:
Seasonal subscriptions (ie, I would only want FX when Rescue ME is on) would probably throw cable into u
Re: (Score:2)
> Game Show Channel, the Reality TV channel, or any home shopping channel?
My Mom for one. She watches the Game Show Channel religiously. Last I checked she was in her right mind.
jfs
Cable are forced to package channels (Score:3, Informative)
Sports Networks (Score:2, Informative)
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Alternate channels (Score:2)
Even news programs I would be just as happy to subscribe to a feed for and get a download that I could watch when I had time.
Having a subscription model also allows for video to be distributed via BitTorrent, really the only model that makes much sense for HD vi
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The simple matter of programming, now, is the showstopper we're working on now.
-uso.
Re: (Score:2)
Which is what's going to happen. And which is why you're hearing about this now, because it's too late. All the niche content will move to internet distribution, whereas TV will remain the bastion for the big networks, news, and other live events. (Maybe we'll get lucky and eventually get a Star Trek channel. Between all the series, movies, specials and whatnot, there's enough Star Trek materia
Good. (Score:2, Interesting)
Since I've upgraded to Digital TV OTA, I now get a music video channel, and 8 PBS channels -- amongst the others. I could care less about cable unless they want to give me the product I want to
May actually improve content (Score:2)
Sounds great (Score:3, Insightful)
Or, if they want to price the channels competitively, I'd be willing to work with that, too. I'll pay $4 per month for ESPN if it's so expensive, but I'm going to pick it up each August and drop it each January so I can just get college football. At $1/month for ESPN I wouldn't bother.
This doesn't make it hard for new channels to break in, either. Dish Network is always having "free preview weekends" for higher-tier cable and premium content. If you want to launch a new cable channel and get people interested, you might have to (*gasp*) give it away for free and rely only on your advertisement income or your startup capital before you gather a critical mass of viewers. Then, you can add a low monthly fee, and scale it up as your popularity continues to climb. Sounds fair to me.
Not to nitpick, but... (Score:3, Informative)
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They'll never do it. (Score:2, Insightful)
Re:They'll never do it. (Score:4, Insightful)
None of the forecasting document I read indicated that it would be nearly this price. 50 cents, to a buck 50 per channel. Excluding HBO, et. al.
Set-up fee:Anywhere from Zero, to 50 dollars
min fee: 10 to 25 dollars a month.
With competition(satellite and fios) the prices will approach cost.
Parent
This will never happen (Score:3, Informative)
2. The cable provider will calculate what the cost to maintain the connection (and some profit and that will be broken out on your bill. Then each channel will be listed.
3. The number of channels will go down. Right now some networks run lower cost channels in the higher tier and subsidize it with a more popular channel. With out that subsidy there would never have been a History Channel for example.
4. The content providers will not let this go through, not the cable companies.
why not basic rate plus per channel? (Score:2)
While I realize that this
My order (Score:4, Funny)
Yes, thank you, I'd like your High Speed Internet Access.
Ok, no problem, the half order or full size?
Full size; the one with 3mb/s down 712 up.
Do you need hardware or setup?
Nope.
Sure no problem, anything else?
Yes, I'd also like a few side orders?
Ok go ahead.
The local channel 17, Discovery Channel, Animal Planet, History Channel, Military Channel and AMC.
Anything else?
How much is your ESPN package?
4.95 per month.
No thanks
Would you like to try our HBO package? It's free for the first 3 months.
No thanks
Okay that's a Full size order of high speed internet for 19.95, plus 6 sides at .95 cents a piece. Anything else?
Nope that will do it for now.
Including taxes, fees and internet monitor labor, your total is $76.65.
WTF?!?!
From a Cable Operator's View... (Score:5, Informative)
First, most cable and satellite companies would be contractually prohibited from complying with any such mandate from the FCC, if it were to be announced tomorrow. Viacom, HBO, Universal, Disney and the over-the-air corporations demand carriage of their lesser-known networks in exchange for a reduced rate on their main programming. For example, our customers demand - and we willingly pay - for ESPN and ESPN HD. The cost per subscriber per month is about $14. We also carry ESPN2, at a discount. If we dropped ESPN 2 from our expanded basic tier, the SD and HD ESPN channels would cost us $9/mo per sub. We are currently in month 4 of a 36 month contract at this rate. Thus, we cannot break this portion of the bundling in our lineup for the better part of 3 years.
Additionally, it is a simple fact that forced a la carte offerings would lead to higher customer cost, and reduced quality. Most cable companies continue to carry their basic tier in analog. A la carte analog results in a daisy chain of traps at the pole or pedestal, degrading the signal across the spectrum. A la carte digital requires equipment in customer's homes with remotely accessible security. You can achieve this with CableCards or Switched Digital. The two are not currently compatible, so it's an either-or situation. In all honesty, MY employer wants CableCards to work correctly. When they don't, it generates higher costs in the form of truck rolls, and lower customer satisfaction.
This is to say nothing of the increased cost due to the creation of rate codes in the billing software for each channel, and the corresponding training of 1700 CSSR's on how to use them. It also ignores the time/cost of converting 79,000 video subscribers to an a la carte plan, so on and so forth.
Kevin Martin has a lot of dreams, most of which seem to be based in fantasyland regarding cable companies. I would be happy to have him shadow me for a week to see how these companies actually operate, so he can realize the true costs of what he dreams up.
Re:From a Cable Operator's View... (Score:5, Informative)
I've posted about CableCards before, and yes they DO work...when they work. When each piece of the system is compatible, CableCards work great. We have verified that our Motorola DAC will talk to our CableCards via our billing system, in a host with compatible firmware. Unfortunately, the host is the customer's TV/Tivo from any number of manufacturers. When their firmware is incompatible, or the proprietary guide doesn't populate, the cable co gets blamed for these problems. We do our best to solve many of these situations, even though they are not our responsibility. The original 1.0 revision of CableCards was capable of two-way communication, but Consumer Electronics companies decided not to utilize this capability. Link: http://www.opencable.com/primer/cablecard_primer.
To drop analog cable would requires a digital tuner in or behind every TV in every home for our subscribers. We could go all-digital in a very short time, effectively eliminating ourselves as a competitor for those who can not purchase a new TV. We are currently working with Motorola to create a "dongle" style digital converter. The "mini-box" would be capable of being authorized on a channel-by-channel basis, using the removable security (CableCARD) currently mandated by the FCC, and still provide compatibility with older analog TVs. If we could get such a product for less than $100 cost per unit, we would order 20,000 of them tomorrow.
A la carte depends on all-digital, and it is technically feasible. There is a reason DISH Network advertises their content as all digital...on transmission it is, but once you hook up your sexy Dish HDDVR via regular coax and tune to CH 3 to watch, you're back on analog. However, the upfront AND longterm cost for cable companies to do so AND offer a la carte will be quite high, and like ANY business, cable companies will pass the increased cost to consumers. Additionally, contracts will need changed, something that will move at the speed of a jellyfish in January.
Parent
Re: (Score:3, Insightful)
Also, ala carte does not necessarily mean that there be _no_ bundling. It gives users a choice to be bundled or not. You cable companies can continue to offer a "basic tier" at the lower price and let people decide if they want to pay the same amount for four channels instead of 40. It also ensures a certain number of subscribers still bun
Re: (Score:3, Insightful)
If I get 1/20th the content, I should pay 1/20th the price.
The market would drive it there eventually.Assuming it applied to cable and sat satellite and fiber.
Re:Populist crap. (Score:5, Insightful)
Parent
Re:Populist crap. (Score:5, Insightful)
Why? Simple economics.
Let's say there's a cable package that has 20 channels including G3, HBO, and ESPN. Slashdot readers are willing to pay $20 for G3 but only $1 for ESPN and $0 for any other channel. Sports nuts are willing to pay $20 for ESPN, but only $1 for G3 and $0 for any other channel. And families are willing to pay $20 for HBO, but $0 for any other channel.
Right now the cable company could charge $20 for that package and all 3 groups would buy it. Everybody pays $20 and gets 20 channels.
If forced to offer it a la carte the cable company wouldn't sell HBO for $1. They'd sell it for $20 in order to capture the family market, who is willing to pay that much for it. Same for ESPN -- they can sell it for $20 and capture the jock market. Same for G3 - they can sell it for $20 and capture the techie market. Now everyone is worse off. The families, techies, and jocks are still paying $20 for cable, but getting fewer channels for their troubles.
You can question the empirical assumptions -- maybe the pricing breakdown isn't that extreme -- but bundling of goods has long been a means to allow people who value different parts of a package differently to enjoy the package for one price.
Parent
Re: (Score:2)
Why?
Re: (Score:3, Insightful)
So if all I wanted was HBO I get it for half price? Sounds good.
If all I wanted was a couple of the other channels I'd get it 20% of the current price? Sounds good too.
Sure the people who want all the channels lose their current subsidy from everyone else, but there's probably about 3 such peopl
Re: (Score:3, Interesting)
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Cable will cost you $XX servicing fee, that includes YOU CHOICE of Y channels, whatever ones you like (I guess they could have different pricing based on 'premium' channels so maybe you get X premium and Y not so premium channels... whatever)... then any extra channels you pay per channel some small amount.
How would that not work to everyone's advantage? I live in Australia and cable penetration is much, much lo
Re: (Score:2, Funny)
Re:Black Family Channel (Score:5, Insightful)
The Black Family Channel just happens to reveal their target demographic in their name.
Parent
Re:Black Family Channel (Score:5, Insightful)
Other than that, keep rocking the suburbs, the white american male is soooo discriminated against... boo hoo.
Parent