Congress To Force Cable a la Carte Plans

unassimilatible writes "Senate Commerce Committee Chairman John McCain seems to be leaning towards sponsoring legislation mandating something I have wanted for a long time: Forcing cable companies to offer "a la carte" programming packages. No U.S. cable or satellite currently offers such a plan. However, as the Washington Post reports, "That may change, if some lawmakers and consumer groups get their way, as the cable industry finds itself under increasing scrutiny. Lawmakers report that their constituents are angry about cable bills that have risen at three times the rate of inflation since the industry was largely deregulated in 1996." McCain money quote: "I go down to buy a loaf of bread. I don't have to buy broccoli and milk to go with it." Bottom line is, cable companies have a government-authorized monopoly, so maybe they need to recieve government-mandated "innovation." Why should I pay for 15 non-English channels?"

Re:And here Slashdot shows its leftist bent

[Omega1045]

Why should the government force this? Let the market decide.

Uh, huh huh. It is a government-sanctioned monopoly. There is no free market, so the market is probably not going to be able to decide. I totally agree with the article - lets force them to innovate, or make them give up their monopoly!

Access Control with Analog?

[Anonymous Coward]

This could be a bad thing. Analog cable is an open standard that lots of hardware can use. We might lose effective access to the signal if it is not used.

It is very hard for the cable company to do access control on Analog channels --- basically some person has to drive to your house and install a filter on the line. There are only so many filters that you can stack up there. Denying access to analog channels is so expensive, that often times they just forget to do it if you are downgrading from extended basic to basic service and the like.

Meanwhile, digital channels can be individually decoded and decryped. Sounds great, but the problem is that it is proprietary. No TV tuner cards support it and neither does TiVo and the like.

Be careful what you ask for....

Re:And here Slashdot shows its leftist bent

[Anonymous Coward]

Why? Because if you want to get TV there is no other choice now the way the market operates right now. It's not a free market, it is the exact opposite: a monopoly. In my area we can only get cable from Time Warner Cable, for example if all I want are news channels plus some movie channels I also have to pay for sports channels and other channels I have absolutely no interest in.

Re:And here Slashdot shows its leftist bent

[A55M0NKEY]

RTFP(ost)

You don't have the choice to buy channels a la carte because nobody, not even satellite offers it. This is a symptom of a breakdown of the market called an oligopoly, a cousin of the better known monopoly. Both the monopoly and the oligopoly are vulnerable to having the benefits of their position taken forcably by a govenment because they are not benefiting consumers as best as they could. Since only people (consumers) vote, they have all the power, so they can ( justly IMHO ) steal from mono/oligopolies of the world that would parasitise us all if left unchecked.

Re:Technical Nightmare

[Cheeze]

most cable companies already require a digital box. There was this law that says they have to be all digital by 2006 or something like that. I could be mistaken though, but comcast in my area requires a box on each tv, if you want to get any advanced programming.

Re:Yay! Now everything will be more expensive!

[haggisman]

I think the point about a la carte is that the current bundling of channels forces you to accept crap channels just in order to get ones that interest you. Up here in Canada, our beloved CRTC forces all cable or satellite TV providers to require subscribers to purchase a base set of channels, presumably to pump their silly "Canadian content" requirements. Most of them are eminently forgettable. Over and above this, you usually get to choose various themed packages, most of which contain about 1 or 2 out of 7 or so channels you'd actually want. Not good, and expensive. The closest we ever had to a la carte was now defunct Look TV which offered the basic required channels plus "pick any 10 for $12 per month, and 12 for $14 etc.... They sadly didn't get rolling because they relied on line-of-sight microwave transmission - not a good idea.

Not a FEDERAL monopoly

[michael_cain]

Two points about the monopoly question:

• In many places there isn't a monopoly, government-granted or otherwise, on pay-TV service. Some franchising authorities have granted permission for overbuilders to construct a second, competing cable system. In most areas there's a choice between cable and satellite. There are two satellite providers, since the FCC had the good sense to disallow the merger of Echostar and DirecTV.

• Where there is a monopoly cable provider (ignoring satellite), the monopoly was not granted by the Federal government but by the local franchising authority. If a la carte pricing is going to be a requirement, shouldn't it be a requirement imposed by the authority granting the monopoly franchise?

Finally, if Congress is going to require that the cable operators unbundle channels, then they better be sure that they require the media companies to unbundle as well. That is, if Comcast is required to sell ESPN without a dozen other Disney-owned channels, then Disney should also be required to make ESPN available to Comcast at a lower price than the bundle of ESPN plus other channels that they require Comcast to buy today. It would be interesting to see, should the cable and satellite providers sell those channels on a cost-plus-markup basis, how loud the end-users scream at ESPN's 20% annual price hikes :^)

Re:Technical Nightmare

[nightsweat]

My cable company has already started forcing us to move to digital if we want to keep the service we had a month or two ago. HBO Signature, Bravo, Sundance, BET Jazz, and a few channels I don't watch have been moved to a digital tier. This is not a real barrier. You're getting moved to digital sooner or later anyway.

Re:Awesome!

[provolt]

Now I can get rid of everything besides 4 or 5 channels. This may put a dent in their little monopolistic position.

You're right it is totally awesome. Now you'll get to pay the same price for 5 channels as you pay for 50. Super! In addition, you'll get the advantage of more complicated equipment, increased overhead, and (as a ultra-special bonus) burdensome government regulation. Outstanding!

If this is forced on the industry, we'll end up with "movie theater soda pricing".

15 oz coke: 2.75
90 oz coke: 3.00 (with a free refill)

You want 45 oz? Sure that'll be 8.25. Or you can have our package deal of 90 oz of 3.00, but it's up to you.

Re:Free market economics

[_Sharp'r_]

The market wasn't deregulated at all, the monopoly was. Don't confuse a monopoly industry with a market. There isn't currently a market for cable tv in most parts of the U.S., although having a minor market for tv in general (adding a couple satellite providers) has helped.

Re:DISH used to do this

[Phreakiture]

Dish Pix was $1.50/channel, $5.00 minimum.

The price was right in that if you purchased the channels a la carte, you would rack up a much higher bill than purchasing packages. This encouraged the purchase of packages.

For example, the the bottom package was the top 50 (now top 60 since they did away with Pix). 50 Channels at $1.50 apiece would be $75, but the top 50/60 package was, IIRC, about $20. If you could really pick out 13 specific channels you wanted, and only those 13, then you could make out better with Dish Pix, especially if some of those channels were in higher tiers.

The part that became costly for Dish Network, though, and something that all of the supplemental TV services will have to address, is not the technology, but keeping customers from spending long lengths of time on the phone with customer service hemming and hawing about what channels they want. This is the reason why Dish discontinued this service, from what I understand.

The move to all-digital on cable would be a boost. This will free up some 420 MHz of bandwidth used for analogue channels from our local system, for example, which could then be turned around into one or more of: (a) better bitrate, ergo better picture, (b) more channels or (c) higher throughput for cable modem users. As I am a cable modem user, but not a cable TV viewer (I get my TV from Dish Network), option C would be my choice, but, as I said, these three are not mutually exclusive.

Re:Non English?

[Xoder]

Maybe they have English en SAP, check if your TV supports it.

Re: Evil Government Intrusion

[91degrees]

Perhaps "Are local monopolies" would be better.

Thank you McCain

[nberardi]

Amen,

McCain is actually comeing out with a law that I can back and get behind. There is no reason that I need the hispanic channel, since I don't speak spanish, or the plethera of other channels that don't do me any good. I am not being a bigot, I just don't think I should have to support a channel with my money that I cannot even understand. Why do I need to support a local Philly channel that broadcasts local news in spannish, this is a channel that wouldn't survive with out it being forced onto the public.

Anyways back to my original point, there is no need for a ton of the channels out there. I would rather have the ability to pick the channels I want. I want Sci-Fi, Commedy Central, History, TLC, Discovery, USA, TBS, TNN, and the local channels. I don't want two channels of NBC, Travel, Animal Planet, the 5 non-english channels, and the religious channel.

I think this is a great thing. It is about time this happened. This bill from McCain would start to make up for the limiting of Free speach that was passed by the McCain - Finegold Bill last year.

Re:Technical Nightmare

[DeadSea]

I tried digital cable and it sucked:

1. It takes about 2 seconds to change a channel whereas analog is maybe 0.1 seconds
2. The quality sucked. Mpeg artifacts out tha wazoo. On analog I get a very small amount of snow, but it bothers me much less. Especially because mpeg artifacts get much worse during the fast exciting parts.
3. I need a box where I can plug analog directly into the back of my TV.
4. I couldn't split it. I plug analog directly into the back of my TiVo as well.
5. TiVo can't always switch channels on it. It worked much of the time with the remote IR thing, but not always.
6. Not much more selection. Everything I want to watch is on basic cable anyway - News, Cartoon Network, Comedy Central, PBS

Anything that is going to require me to have digital blows.

Think of how it will effect HD

[techstar25]

I only want the HD channels but Brighthouse required me to subscribe to the full digital package at $99/mo so I can get their 6 HD channels(ABC, CBS, FOX, PBS, NBC, Disc). It's another $4/mo a la carte for HDNet (2) and INHD(2), which show sports and cool concerts. Plus for me to get HBO in HD (Sopranos), I have to subscribe to the whole HBO/Showtime package which is like 15 more channels for another $20, and I watch only one of them. Give me those 12 HD channels for $3 each per mo ($36)and I'll gladly pay it. It would save me $100/mo. If people could get only the HD channels a la carte, I think they would.

Re:I couldn't have said this better myself...

[apnar]

The FCC says your CC&Rs can't stop you from putting up a small dish or antenna.

Re:evil cable companies

[ralf1]

In some cases the shopping channels have purchased a failing small channel in your local market and then sued the cable company to carry its programming for free under the "must-carry" provisions of the last round of cable legislation. I know they've done that here in Houston.

Re:Technical Nightmare

[Jeff DeMaagd]

Somehow a lot of C-band satellite providers do it, and they offer both package and a la carte pricing. You can buy a minumum (or no) package and add channels, or just buy a package. Their packages are also about 25% cheaper than dish or cable providers too, individual channels cost $1 to $1.50 except for the premiums (HBO, Star, etc), $3 a channel.

Great, but this doesn't go far enough

[camperslo]

Aside from the number of channels used or carried, I believe there are other factors that should be taken into account to force rate REDUCTION.

1) Digital transmission allows carrying the content of many channels in the bandwidth of a single analog channel. These added channels cost less to carry and maintain since their addition does not tax the power output capacity of the distribution amplifiers. Also the demands for signal amplitude and freedom from cross-modulation (amplifier distortion causing noise and spill-over between channels) are lessened since the digital signal is less vulnerable than analog. Analog tv signals use vestigal-sideband amplitude modulation which is vulnerable to noise in the same way that A.M. radio brodcasts are. We've all seen the cost savings of digital transmission in long-distance telephone service. The same principles apply to some degree.

2) Cable companies actually get kickbacks from sales on shopping channels, and often give those more desirable channel placement than things we want. They should pay US for carrying these!

3) Cost of the systems are subsidized by locally inserted advertising in many cases. And while this competition for ad revenue is damaging to local radio and tv broadcasters, the cable company isn't faced with the high-cost of producing news programming, or the burden of complying with public inspection files.

4) The cost for basic service users should be lower now that digital technology has virtually eliminated piracy of premium services.

5) Although it should be fair use to watch and record cable programs on anything in a household (much like we're now free to have extension phones without added fees), digital transmission requires a decoder for each location, and we're stuck with added fees for this.

6) We're stuck with paying perhaps $1 a month per decoder box for electricity to power the decoder boxes which are party of the cable company infrastructure. These boxes use power even when we're not watching which is not only costly, but environmentally unfriendly.

7) In my area, there is an anti-competitive "cable access fee" of about $10/month tacked on for internet service of those that are not cable tv subscribers. This is unreasonable considering that the connection is simply a tap into an existing feed, NOT a dedicated cable all the way back to a central office (as it is with a phone company). To the extent that using the cable system for internet use covers a portion of the infrastructure costs, the cost for basic cable users should fall.

Cable rates are held artificially high because we're dealing with monopoly. With lack of competition relief must come through regulation.

Right Stick, Wrong Mule

[Benedick]

The problem is not the cable companies. Nor is it DirectTV or Dish Network. No, it's the content providers: your friends at Viacom, TW, etc.

Did anybody listen to the news a couple of weeks ago when channels dropped off Dish Network? The dispute centered around the bundling the content provider was demanding of Dish. It's the big media companies forcing the cable company to sell the bundle.

Cable is a sort-of monopoly. They do have competition from satellite, though it's a different delivery mechanism. Anyway, with these three (and other alternatives trying) fighting amongst themselves don't you think the market would have already driven a la carte if it was possible? Heck, I'll switch to WHOEVER can get me the Speed Channel for less than $50 / month. Nobody can.

I think congress needs to step in here, but they need to be beating the media companies, not cable.

Re:evil cable companies

[ZoneGray]

Mostly what will happen is that the small channels will go out of business, or be bought out by the bigger ones. There's a chikcen & egg problem with niche channels, because they need to sell advertising. The dual-revenue model (subscription fees + ads) only works for established stations like ESPN, or those who can piggyback on bundled packages to get distribution.

The likely scenario if a la carte were mandatory would be for major channels to acquire smaller ones, then shift some key programming over to the smaller channel in hopes of building the subscriber base. If that didn't work, they'd just shut it down and cherry-pick the programming.

A la carte sounds nice, until you realize that the menu will change once it goes into effect. If I could pick and choose amomg existing channels, it might be one thing. But that won't be the choice once reality hits home.

And for that matter, this sort of price regulation inevitably makes it illegal to offer certain discounts... they couldn't do a "buy ESPN & CNN, and get another channel for free" for example, without reducing the base price of the individual channels. Most likely, they'd have to break out a base "service cost", so out of your $40 cable bill, they'll say that $30 of it is technology overhead and $10 is programming. Or $10/$30, depending on which is more profitable. Don't worry, the FCC will play right along with whatever they request.

And expect the news and political channels to get an exemption.

Meanwhile, this is about the third time in a row that Congress has promised to lower our cable bill in an election year. How many times are we gonna fall for it?

Re:And here Slashdot shows its leftist bent

[little1973]

Sometimes governement interference is bad, sometimes its not.

Government intererence is always bad. And if it looks like it's not bad, in that case the government just tries to undo the bad which the government itself has created in the first place. However, in most cases this second intevention just makes things worse. Which, of course, requires another intervention... catch 22.

Why the feds?

[Sloppy]

Isn't it the local governments that give cable companies their monopolies? It should be a contractual term in the franchise agreement.

My city councilors and mayor should be talking about this -- not US senators.

No?

C-band

[iantri]

No U.S. cable or satellite currently offers such a plan.

Untrue. C-Band satellite has been available a-la-carte for a long time.

It's cheap and higher quality than any digitally compressed service. It's a shame many of the services are going digital now..

non english channels!!!

[Anonymous Coward]

the best tv on the planet is spanish....they are always so animated and the chicks are hot!!!!

if you don't know the joy of spanish tv you haven't really watched tv

Re:Part of the problem

[applemasker]

Another part of the problem is cable companies who take advantage of their exclusive-distributor status in your area and attempt to leverage that into promoting owned or related channels and locking out competition in the same genre.

When the Yankees left MSG Network (owned by Cablevision) and created the YES Network, Cablevision did everything they could keep YES off its system. It attempted to sell YES as a "premium only" channel like HBO which YES refused to agree to, resulting in a whole season of not being able to watch the Yankees even though I live within 20 miles of NYC. Last year, they reached an interim agreement and went to binging arbitration. About 2 weeks ago the arbitrators ruled that YES should be carried (like MSG) on the basic tier.

Read the full story at washingtonpost.com

[rhwalker22]

Longer version of article is online here [washingtonpost.com].

Re:Poor Senator McCain

[werfele]

I'm no Republican, but this is a distortion of the facts [snopes.com].

Re:evil cable companies

[beamdriver]

If this doesn't happen, you'll end up paying more and more as corporations figure out how to scam their way onto "basic cable" and stick you with the bill.

Look at what's happened here in New York with the YES network, which is the new sports network run by the NY Yankees. Cablevision, which is my cable provider, said they wouldn't carry YES on their basic cable package, since it was too expensive (around $2 per month per subcriber) and didn't offer enough value for that price. Cablevision offered to carry it as a premium channel, but that wasn't good enough for YES, so they sued and now every cable customer in the tri-state area is paying a two dollar a month "Yankee Tax".

Obviously there are other issues here, but if you're worrying about channels you pay for and don't watch, worry more about sports channels like YES and ESPN, since those are the ones that are often the most expensive.

Re:And here Slashdot shows its leftist bent

[AceM2]

First, there is no cookie cutter definition for "Republican" or "Democrat". I was only speaking about the history of the republican party. Second, you fail to define what a republican even is, and I doubt you really know. In any case, the fact is TR was a popular republican, and these sorts of actions ARE in the history of conservatives/republicans so please stop trying to take away their good politicians ;) Sorry democrats... You can't change history to favor your party.

Anyway, I don't believe cable tv is necessary, but considering how many million homes have cable and use it for their primary news/entertainment/advertisement source... I'd say it's a pretty damn important part of our lives. In the end, they're just trying to give the consumer more power over what they buy/watch. This is not government control (which would conflict with the republican party's message), but rather it is more consumer control... Which is great. The government isn't taking over cable, they're just telling them they have to serve the desires of the consumer, just like any other business has to. I tend to like the analogy given about grocery shopping.

Jackson's republicans were "democrat republicans" and the plain "democrats" were on his side. The whigs and the national republicans were against him. Just a random fact that I think should be pointed out. I understand what you're saying, but anyway inviduals have to make certain decisions on their own. The fact that they weren't exactly as they are now doesn't change the history of the political party. The parties generally don't get together at the beginning of an election year and completely change their message. There is an evolution over time based on the changing conditions we face, but the history and core values are still there. Presidents especially are sometimes caught in the middle as they face various issues, and many conservative republicans have various problems with say... our current republican president, but in the end, he is still a republican and many of his plans and ideas will become part of the future republican "ways" and history. I get tired of people who try to act like republicans are evil EXCEPT this guy and that guy "oh, but they weren't really republicans." It's a joke.

Your comment about McCain and "the Democratic candidate" made little sense. Who calls "the Democratic candidate" too "conservative"? Sounds like an idiot to me. Unless "the Democratic candidate" isn't John Kerry, the most leftist voter of anyone in the senate. Maybe the "many" you speak of are just diehard Kucinich fans or something like that. This argument is useless, some imaginary conservative democrat makes John McCain look like a leftist? Better write him a letter, I bet he didn't know he should change his political affiliation.

Anyway, I don't see what MLB teams have to do with this. Does the league force you to pay them money whenever they play games or something? Do you have to buy tickets to games you don't want to see? I don't get it... Cable makes me buy stations I don't want... MLB doesn't charge me anything... They even generally let me see the games I want because all the channels pick up the various games... and I can go to the games I want without having to pay for all the others...

Though, you know I'd rather watch more NHL games, something that could become a possibility if I could pick my channels instead of having to shell out another $50 to get 500 more channels I don't want to get 1 I do...

I'm glad you survive without cable, most of that crap will rot your brain. I however, do not think I should have to pay for all the crap just to get the few stations I enjoy watching from time to time.