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05.24.2004
Originally featured on BroadcastEngineering.com
Lawmakers want FCC to examine cable pricing

Key members of the House Commerce Committee have asked the FCC for a detailed study on the feasibility of cable and satellite companies offering their subscribers the choice to pay only for the specific channels they want to watch.

All satellite and cable companies require their customers to subscribe to packages of channels, arguing that the aggregation of channels allows them to provide affordable rates. However, a la carte pricing, which would allow subscribers to pick and choose the channels they want, has been gaining momentum among some lawmakers and consumer groups.

Now, with the indecency issue in the news, several parents groups have joined the campaign, complaining that they should not have to pay for channels that air content they find offensive.

In the letter sent last week, Commerce Committee Chairman Joe Barton (R-Tex.) was joined by ranking member John D. Dingell (D-Mich.), Fred Upton (R-Mich.), Edward J. Markey (D-Mass.) and Nathan Deal (R-Ga.) in asking FCC Chairman Michael K. Powell to have his agency determine —within six months—whether a la carte pricing would be technologically and economically feasible.

Lawmakers so far have held off attempting to impose an a la carte structure on cable and satellite companies. Congressman Deal recently withdrew an amendment to satellite legislation that would have required the companies to offer a la carte. Instead, lawmakers are asking cable and satellite companies to offer a la carte in addition to the packages they already sell subscribers, which typically come in bundles of dozens of channels.

The lawmakers asked the FCC to examine whether offering a la carte programming would end up costing subscribers more, or if it would hinder the ability of lesser-watched channels to exist when not bundled with popular channels. They also want to know whether cable and satellite companies have the ability to buy channels individually from programmers, such as Viacom Inc. (generally, they do not), and if a la carte subscribers would be required to have new set-top boxes. Finally, they asked the FCC to consider what legal issues might arise if Congress decided to mandate a la carte.

The cable industry opposes a la carte, saying it would ultimately raise subscriber costs and harm diversity on the airwaves. Currently, popular channels subsidize less popular ones, which the cable industry says provides more options for viewers.

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