RSSFCC abandons its 'a la carte' cable programming plan
By Scott M. Fulton, III | Published November 28, 2007, 4:29 PM
Chairman Kevin Martin's proposed overhaul of the basic cable system was removed from a plan to help ensure minority-owned programmers have access to channel spectrum.
The five members of the US Federal Communications Commission found themselves unusually occupied yesterday -- not so much with ordinary business as they were waiting for Chairman Kevin Martin to bring his plan up for a vote. Knowing his unusually radical plan to replace some metropolitan basic cable plans with "a la carte" programming choices -- supposedly as a means of ensuring fairer access to minority-owned channels -- was doomed to failure (it literally said as much in that morning's New York Times), Martin periodically postponed yesterday's final vote on the matter in hopes his fellow Republicans would reverse their opposition.
It didn't happen, though as it turned out, only the Commission's two Democrats were willing to join Martin in pledging support for the measure that remained. What did remain is a provision to guarantee fair rates for services that lease channels set aside by cable systems for more diverse programming.
Typically, the cash flow for programming goes the other way: from the cable operator to the programmer. Major cable programmers like Viacom, Discovery Networks, Time Warner, and TW's Turner Broadcasting unit offer programs to CATV providers like Comcast, Adelphia, and yes, to Time Warner, and it's the programmers who charge the fees.
An existing legal mandate says cable operators must set aside channels for access by other sources, presumably to open up the spectrum to more diverse programming. But for that system, the flow of cash is reversed: Small programmers lease the unused spectrum from the cable operator, which receives the fee.
Perhaps because so few programmers prefer to do business this way, there are very few so-called leased access channels available to small programmers. A survey cited by Chairman Martin states the average number of leased access channels available on a typical US cable system is 0.7. And thus, very few small programmers exist to take advantage of that seven-tenths of one channel usually available.
What the Chairman tried to do -- ostensibly to resolve this problem -- was invoke an existing clause of the revised Communications Act of US law. That clause states that whenever cable systems with 36 or more channels are available to 70% or more of US citizens, and at least 70% of those citizens to whom that service is available become subscribers, then if the FCC determines the programming on those systems is not diverse enough, it can take corrective measures. The "a la carte" system was Martin's measure of choice.
But skeptics on the Commission saw the plan as something that could conceivably accomplish the reverse objective, perhaps intentionally: It could force subscribers into paying individual fees for separate channels, with those fees being determined by the cable programmers -- a situation which could very well turn out to the programmers' liking.
What was originally intended to have been a 9:30 am vote on the matter was postponed well into the night. In order for the Commission to pass anything at all, Chairman Martin withdrew the "70/70" trigger proposal, which pleased all his fellow members.
"I'm pleased that the Commission has backed off its fig leaf attempt to address minority and female ownership," Comm. Jonathan Adelstein commented late yesterday. "It was an obvious effort to provide cover for more media consolidation, which would only have take media outlets further out of the reach of women and minorities. It was designed to check the box and move on. It's high time we create an independent, bipartisan panel that will look at these issues in a comprehensive and substantive fashion."
Comm. Michael Copps smelled a rat when he noticed representatives of minority media concerns were not even given time to reply, favorably or otherwise, to a proposal which was said to be benefitting them. "It started to feel more and more like -- if you'll pardon the expression -- a whitewash," Comm. Copps wrote yesterday. "Thankfully, we now have time to get it right. I hope we will have the good sense to do that instead of picking an arbitrary date to complete big media's wish list."
The remainder of the proposal, after "70/70" was lopped off, addressed new enforcement rules for ensuring availability of leased access channels, and fair rates for those channels. But both of Martin's fellow Republicans dissented anyway, arguing that the whole notion of making small program providers pay for the kind of access for which larger providers are paid themselves, is ludicrous.
Commissioner Robert McDowell pointed to the backward attitude of the business model which leased access appears to promote. The type of programmer that isn't seeking revenue from the programming it produces, he argued, must expect to receive its revenue from some other source. And that limits the type of programming this presumably small programmer would produce to a few certain, curious types.
"The economics of leasing result in limited use by traditional, full-time programmers," Comm. McDowell wrote yesterday. "The record indicates that generally, part-time programmers producing home shopping content, infomercials, adult content and, ironically, certain types of religious programs are attracted to this business model because they have other means of generating revenue from their viewers."
The National Cable and Telecommunications Association late yesterday expressed approval for the removal of provisions which Comms. Copps and Adelstein feared would have actually benefitted the industry the Association represents. But in its statement of gratitude, we learned that the cable industry was thrown a bone anyway.
"We are pleased that the Commission dropped both a proposal to impose a new multicast must carry mandate on cable systems and a proposal that would have encouraged government intervention in private carriage negotiations," NCTA CEO Kyle McSlarrow stated yesterday. "Rejecting these items sends an important message that consumers are best served by marketplace forces, not government micromanagement."
The "bone" came in the form of another lopped provision from the FCC's final order: a compromise provision that cable systems "must carry" the multicast signals that piggy-back on top of new digital broadcast signals. The cable industry appeared to have been pleased with last September's compromise, though it certainly seems pleased now to have that gone and over with.
After all was said and done yesterday, the FCC adopted an order that ends up changing little or nothing.
For which Chairman Martin tried to adopt a tone of gratitude yesterday: "I believe that the actions we take today will go a long way to accomplishing the twin goals of competition and diversity," he wrote. "I look forward to continuing to work with my colleagues to adopt other policies that are designed to ensure that independent voices are heard."
So I guess if I want satellite, I'll always be forced to pay for garbage like MTV. Way to go FCC, just like every other government agency, you serve everyone but the citizens.
We are really close to the "500 channels" we were promised about 10 years ago, and yet we have _less_ variety and fewer choices in how we purchase access to programming.
I wish the government could get its collective head out of its butt and realize it's not the 1950's any more in terms of technology, and realize that if it only listens to companies (and their lobbyists), the customers and citizens will always lose.
But that would require smart, law-abiding, honest non-egomaniacs to run for office, and all those people have too much self-respect to apply for a job where being a lying wh*** is the most important prerequisite.
Hello, Mr. President? Ever wonder why you have a 24% approval rating? This kind of stuff is one of the dozens of reasons? Hello, Congress? You wonder why you have a lower approval rating than colon cancer? You allow this nonsense to go on.
I turned off satellite years ago, because I don't watch much, and it's not worth the minimum of $40 or $50 a month to keep it on. A la carte would have been perfect for me, but instead Netflix gets my business, and I'm perfectly happy to keep it that way.
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|lmao...
You are the perfect example of how the system works (well), and how the average person is absolutely clueless about the fact that it is, in fact, working.
Product #1 disappoints.
Product #2 fills desire.
If it was feasible for a cable company to operate in that format while lowering costs to the consumer at the same time and raising profits, it would be offered. What you are suggesting amounts to forcing a company to create a product that will hurt either them or the consumer or both simply because *you* would like it better.
That's not how the market works, thank God.
No company will sell a product that does not benefit them (increased profits) or the consumer (i.e., they want it) unless they are hoping to capitalize on it later (loss leader to get the product on the market). Forcing a company to do such a thing does not only directly oppose the tenets of capitalism *and* free-market, it creates an unsustainable situation.
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|FCC needs to be disbanned.
This is the sort of thing people should NOT reelect for.
Attempting to make a change where the possible chance of Time Warner charging $9.99 for each additional channel.
Trust me THEY WOULD!
We need to get EVERYONE that DID NOT VOTE NAY OUT OF OFFICE.
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|I'm president of the national trade association of leased access programmers and hope you'll allow these comments for me to reply to Commissioner McDowell's reported comments on our industry.
Dear commissioner McDowell.
I note in BetaNews (http://www.betanews.com/...ramming_plan/1196283815) that it’s apparent you fail to realize those of us who are truly ‘bona fide’ leased access programmers do indeed seek revenue from the programming we produce. For example we cover a local high school football game, from start to finish. We pay $200 for airtime and $500 to tape and edit a multi-camera show.
Then we sell advertising to those businesses that want to reach those viewers of the show. This is exactly what I did as a newspaper publisher. We covered the game, published the story and presented readers for our advertisers.
BlabTv, Pensacola, Fl. .is an independent programmer that for over 24 years has been very successful with local businesses hosting their own shows. Lawyers, doctors and even politicians take phone calls from viewers. Ask former Congressman Joe Scarbrough about this. He credits his use of Blab with being elected.
True leased access programmers do not do ‘home shopping’ or traditional ‘infomercials’. The cable companies themselves accept this type programming on their proprietary ‘local origination’ channels or as ‘local origination’ content the cable site itself places on channels they’ve designated as ‘leased access’.
Yes, some churches are willing to pay for leased access airtime to air their services and many churches buy Sunday morning airtime from broadcast network stations as well.
The idea of ‘adult content’ being on leased access is news to me as the nation’s largest user of leased access and president of our national association. However, there is plenty ‘raw sex’ on HBO and other cable networks. Oops! I nearly forgot. A cable MSO owns HBO as well as some of the other cable network channels that profit from soft porn.
I’m a Republican. I’ve been an active Republican since the early 60’s. I became a Republican when I had enough of Democrats fattening themselves from holding political office and now I see Republican office holders doing the same. I’ll name them if you like.
I’ve been engaged in journalism 49 years; owned several newspapers; been a TV and radio news reporter and for the past 12 years a leased access programmer. I’m a businessman; the same type of small businessman I thought the GOP represented. I now realize today’s GOP office holder, elected or appointed, serves the mega-corps and not the small business person.
Now I see why Joe Scarbrough no longer considers himself a Republican. Persons like you are driving me out as well.
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|I can't believe that the FCC couldn't at least attempt to address this issue without tossing in the towel on the entire a la carte concept. I'm sick of paying for crap I don't want or need. Maybe if there was more competition in more places the market would fix itself, but there's not. Some places have multiple providers, but far too many don't, so we're going to have to live with being screwed for a while longer it seems (or find something else to do besides watch TV or use home internet)
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|Minority ownership, off the wall must carry regulations, etc. aside, the notion that addressable technology is hindered by a consumer being able to select the channels they wish from a predefined list of available channels is utterly ludacrous.
Not only is such technology easily implimentable, it makes sense! Why should I have to subscribe to an exhorbitantly priced 99+ channel bundling for far too large a price when all I want is Movie Classics, the SciFi channel and two or three others?
As after all, the lower priced bundles contain the schlock that few want. And why should I subscribe to cable to get 22 Hispanic channels and the local channels when their reception is subject to the same terrestrial interference that I might experience for $40+ a month.
The net result is that the service providers lose my business. And I will just have to bemoan my loss(sic) of being able to see the same lousy movies on the movie channels repeated 8 times a day. ...Especially when I can do that with the repeat button on my DVD player.
The idea of creating an ala carte menu of channels combined with 'package' prices for various numbers of channels is long overdue. No longer are the providers limited in their headend equipment to defining static tiers of channels.
And so long as they fail to address this capability, they will fail to capture my potential business.
Simply paying exorbitant fees for 200+ channels of crap is not a compelling reason to subscribe.
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|There was an interesting article on this in the NY Times, which claims that with the a la carte that individual channels would actually cost the consumer more since channels like ESPN charge quite a bit to cable providers. It sounds like this is where the FCC should come in and regulate how much these channels can actually charge or at least set a maximum, and thus provide a level playing field that provides the a la carte feature and doesn't screw the consumer with high prices.
I currently have a digital cable package through Comcast only because I have to have it in order for them to let me get NHL Center Ice, the season pass. Of course I also now have like 300+ channels that I've never even looked at and never will. It's like being forced to pay $35 for an all you can eat buffet when maybe all you really want is a $8 burger.
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|"There was an interesting article on this in the NY Times, which claims that with the a la carte that individual channels would actually cost the consumer more..."
Yeah, but the channels I want can charge three times as much and I would still probably end up paying less than half as much overall.
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|The reality is that a la carte would kill all but the largest networks -- thus probably strangling the very minority-owned networks the FCC is trying to protect.
So instead of 300+ channels, we'd have 50 or 60, all owned by the usual suspects (Disney, Viacom, Comcast, NBCU)... which might well happen anyway, but a la carte would make it happen faster.
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|"The reality is that a la carte would kill all but the largest networks -- thus probably strangling the very minority-owned networks the FCC is trying to protect."
Let it. I'd rather risk losing a few channels I might like, than pay for a whole lot I've never cared to watch.
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|That's going to happen anyway. Remember radio? Remember when it was actually worth listening to?
Consolidation is inevitable, and "anti-trust" seems to have been left out of the 21st century dictionary of the Federal Government. The big companies will buy everything up, homogenize it into a thin gruel that only the Lowest Common Denominator would like and spew it back to us, and effectively kill all competition who wants to provide a true alternative. Just like radio.
The Corporatocracy is upon us, and their lapdogs in the Federal Government heartily welcome our new plutocratic overlords.
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