THE ISSUE

Expanded basic cable has become a kind of Pandora's box for families.  Many parents welcome expanded basic cable into their homes because it opens up a whole universe of family-friendly programming.  There's the Disney channel, Nickelodeon, ABC Family Channel, the Discovery Channel, and more.  But to access these educational and family-friendly networks, they are also forced to pay for channels they don't want and that actually make their job as a parent much more difficult.  Now, in addition to trying to protect their children from the filth on Fox, NBC, UPN, and the other broadcast networks, they also have to try to protect their children from the much more explicit fare on MTV, FX, Comedy Central, and the like.

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LATEST HIGHLIGHTS

 

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FCC's Report Crushes Cable Industry's "Great Wall" of Excuses

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PTC Talking Points for the FCC's "Further Report" on Cable Choice

 

The first report erred in estimating the costs and prices of a la carte programming.  The original report assumes that consumers would only purchase 11 channels and estimates costs and prices based on that assumption.  A more economically sound approach to determining the number of channels would be to take prices as fixed and estimate demand given those prices.

 

A la carte may increase advertising revenues for niche networks.  A la carte may provide market signals that more accurately reflect actual viewers rather than potential viewers.  As a result, small networks may be able to demonstrate their popularity and thus increase their advertising appeal. 

 

A la carte could decrease many consumers' video programming bills.  The original report erroneously concluded that consumers would incur a 14-30% increase.  However, it actually showed that the applicable bill increase would be between -2% and +15%.  The previous study's own assumptions show that a consumer would receive a benefit ranging from a 13% decrease to a 4% increase, with a decrease in 3 out of 4 cases.

 

The first report erred in determining that a consumer who purchased 9 or more channels would see a bill increase.  When calculating the average price per channel, Booz-Allen-Hamilton failed to net out the cost of broadcast basic stations.  If the cost of these stations was deducted, a consumer could receive 16 to 20 channels without an increase.

 

A la carte could induce customers to take MVPD service who would not otherwise be willing to pay the bundle price.  By allowing consumers to choose the amount they are willing to pay and adjust channel choice based on that amount, consumers who are not willing to pay bundling price may be willing to pay for a select few channels.

 

A la carte could make it easier for some networks to enter the market.  Under bundling, if a niche network does not raise the total value of the bundle to those viewers up to the bundle price or generate new subscribers, then there is no benefit to include the network in the bundle.  As a result, regardless of a consumer's value of the niche network, it may not be available to him.  Under a la carte, however, a network with a small, dedicated audience may be able to generate the adequate revenue through a higher per-subscriber fee. 

 

A la carte could offer consumers the ability to pay only for the programming that they value.  Consumers may find that programming they pay for as part of a bundle contains networks they do not watch and fails to include other quality programming that they would enjoy.  While the current bundle can still be available for those consumers who prefer to keep the full lineup of channels, those who would prefer not to subsidize certain channels will have the option to opt out of paying for and receiving those channels.

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America's Media Speaks Out for Cable Choice!

 

A year ago we told you about the concept of "Cable Choice", being able to pick and choose -- and pay for -- only the cable networks you wanted to allow into your home. A year ago the cable industry said it was impossible. They said that technology prohibited such an option. We proved that the technology did exist.

 

Then the cable industry said they would help customers to block networks they didn't like. We exposed the flaw that consumers would still be forced to pay for the unwanted networks that they chose to block.

 

Their next pathetic argument against Cable Choice was that it would force smaller, niche and minority-targeted networks into bankruptcy. Prominent consumer organizations exposed the fallacy of that argument showing evidence that such networks might actually benefit from Cable Choice.

 

Then the cable industry struck fear into the hearts of many by saying that Cable Choice would have the undesired effect of increasing the cost of a cable subscription while giving the customer fewer channels. We have exposed that, too, as a fallacy; and we pointed out that the cable industry already increases their fees at 3-4 times the national rate of inflation. And now the Federal Communications Commission is agreeing with us, saying that a recent analysis by their economists shows that costs would not increase with Cable Choice.

 

Knowing that their backs were against the wall, the cable industry did last month what it said it would not and could not do: provide a "family tier" of cable networks so that parents could protect their children from graphic and gratuitous programming. And over the past few weeks we have exposed the fatal flaw of this 'last gasp' attempt by the cable industry to prevent Cable Choice. Make no mistake: While this option appears -- at first blush -- to be a good solution, it does absolutely nothing in reality to help families. Family tiers were designed by the cable industry solely to appease Washington lawmakers, not to give a real solution to families concerned with harsh cable content.

 

Thanks to the efforts of the PTC and its broad array of partners in the cable choice battle, the public -- and our public servants -- are becoming aware of the merits of Cable Choice. Across the country newspaper stories and editorials are calling for real cable choice. 

 

Click here to read a sampling of what is being written!