FCC Head Supports Ala Carte Cable 295
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."
Cable are forced to package channels (Score:3, Informative)
Sports Networks (Score:2, Informative)
Not to nitpick, but... (Score:3, Informative)
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.
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.
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.
Re:Translation (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 IP is coming in V-DOC (Cisco) or DIBA (Motorola). The bidirectional services just exist on the return path DOCSIS channel making interactive services just another part of the cable modem system.
Re:And, as a nerd just why do I need 50..... (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.