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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?"
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!
Great ideas often receive violent opposition from mediocre minds. - Albert Einstein
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....
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.
Eat at Joe's.
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 :^)
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.
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White
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.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
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.
www.wavefront-av.com
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.
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.
"Would you, could you, with a goat?" Dr Seuss
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.
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.
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?