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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?"
While I am completely against government regulation of things like cable, the Cable Companies have made their own bed on this one. They scammed themselves a legal monopoly, now they have to dance to the government's tune. Of course, they'll just pass the 'costs' of this on to the consumer. But they can't claim some kind of moral high ground against 'government interference', when they've been sucking off the government tit for the last 20 years.
I want to delete my account but Slashdot doesn't allow it.
But cable companies don't work in free markets, they are given a monopoly over their customers.
Don't get me wrong - I have NO problem with access to any of those channels, but what *I* have wanted for *years* is for cable (and satellite) companies to provide me with the content *I* want at a reasonable price. Not charge me for a 120 channels because that's the only way I can see the 20 that I actually *want*.
I wouldn't mind so much IF cable wasn't so expensive. I looked from switching back from Dish Network to my local cable co.. The price I pay for *everything* that's available on my line-up is US$89/mo. via Dish Network. I wanted to get the local channels in HDTV. But to do that I'd have to switch back to cable. To switch back to cable, and keep my current channel lineup would have been US$170/mo!!! And that's not including the HDTV support...! To add insult - my local cable co (Comcast) doesn't *have* as many channels as Dish Network does.
The Dish Network ads are right - cable cos. *are* pigs...
Polymorphism -- It's what you make of it.
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
Bottom line is, cable companies have a government-authorized monopoly
monopoly = monopoly is a situation where for technical or social reasons there cannot be more than one efficient provider of a good
Unlike Microsoft, there is no alternative to the 2 or 3 services, one of them being the Cable Monopoly, because they ALL bundle their channels.
I have to buy 100 extra channels just to watch TechTV and Cartoon Network, and then spend an hour Removing all the shopping and religious channels, as well as Fox News and A&E.
Well, I hate to break it to you, but what's stopping TW/Charter/Cox/etc. from charging you $3/channel (or pick your favorite insane amount) on the a la carte plan? They will still be (essentially) a monopoly.
And what about the niche channel you like (TechTV maybe?) that the general populace couldn't care less about? Will you be happy when they go under because only a select few people want to pay for it?
I'd love to see a la carte television myself, but only if it's a reasonable price and the selection doesn't decrease. In reality, I just don't see that happening.
Yeah! Let the market decide! If you don't like the price don't by it and force the price down, just like gasoline and electricity and natural gas....
Oh wait....
Dude, sometimes the market can't or won't decide. Then the government, who are supposed to have the interest of the electorate not the cable company executives and shareholders, will decide.
Sometimes governement interference is bad, sometimes its not.
Never by hatred has hatred been appeased, only by kindness - the Buddha
While we'd all like a la carte pricing of cable, it's a nightmare from a technical point of view. The only possible way to do it would be to require everyone to have a digital box - trying to do this in analog simply wouldn't be feasible (i.e. try filtering 100-106Mhz out, allowing 106-112Mhz, filtering out 112-124Mhz, allowing 124-130Mhz, etc. - each cable tap would have dozens of filters, and each would push the limits of what passive filters can actually do).
Therefore, we're talking requiring a digital box for each customer, and every single TV set - that alone will tack $5+ per TV onto everyone's monthly cable bill (digital boxes are ~$150-200 and up.
You'd probably also end up with a lot of marginal channels going off the air (outside of Slashdot, how many folks will actually _pay_ for TechTV on an a la carte basis?).
It's not the cable/satellite providers. It's the channels themselves. If I'm running Jim's Cable TV and I want to offer my customers TNT, for example, Turner might make me buy TBS, The Cartoon Network and the CNN channels as one package. That means I have to charge my customer for all those. So I might as well give him the channels he is paying for.
I know this because I worked for a satellite TV provider. It was like pulling teeth to be able to offer ESPN to our customers. Finally one of our managers had to call Eisner personally to straighten things out. As much as I'd like to make the cable companies out to be the bad guys, it's really the networks.
Jim
A dyslexic man walks into a bra.
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 :^)
"Lawmakers report that their constituents are angry about cable bills that have risen at three times the rate of inflation..."
I get so sick of hearing complaints about the cost of X rising than more than the rate of inflation. Guess what, the inflation rate is an overall value, some things will grow at a higher rate, some lower. Given the fact that the value provided by cable has grown*, I really think people don't have much to complain about here. Think also of how much time people really spend watching cable - it is basically the main form of entertainment in most homes.
This is like the constant whining over the price of gas. If you actually consider the value that consumers get out of it, the price itself isn't so bad.
* While it is fashionable to constantly bemoan the lack of good content on TV, look at the diversity of offerings that cable provides, and the opportunity for shows to reach major success from small beginnings that never would have occured on network TV (like Trading Spaces or Queer Eye).
Stop by my site where I write about ERP systems & more
Here's what I see happening.
Cable rates will go up even more.
Cable companies will charge even more for the individual channels in order to recoup the costs of administering the additional choices. Popular channels will go sky high such as CNN, ESPN, HGTV, etc. The channels nobody want's (QVC, HSC) will be free anyway. I wouldn't doubt if channels like QVC actually pay cable companies to carry them. Without those "support" dollars, they will pass on the full true cost (and then some) of those good channels.
If you look at the technical issues, the only way to really do this is with digital TV. Considering the $5 or so / TV cost of the stupid box (plus even more for a remote in many places) that raises prices for households with a bunch of TV's. With old-analog, you could tivo multiple different channels at the same time while watching a third or fourth all on different channels. With digital, I'd need a box for each tivo plus one for each TV. It's easy to pay an additional $25 / month for stupid boxes.
Thanks but no thanks.
I better make this quick before the Mod-sharks bork my opinions again.
You bring up a valid issue, one that most of the leftists here are incapable of listening to. It is possible, however difficult, to keep things on the local level. Cable companies deal with the local goverments, and this is how they keep their monopolies. Take the fight to the city council, and you can see real change.
Take the fight to Washington, and you get Federalization, more hegemony, more collusion. Do you actually think that John McCain gives a flying crap about your cable bills? The man probably hasn't paid a cable bill in 20 years (if ever). He's interested in maintaining the relationship he has with the Time-Warners and Comcasts of the world. Do you really think he'd knowingly sabotage that relationship, just so you can watch Dick Van Dyke re-runs for $10 less a month?
Please. You want Uncle Sam to stop playing with the Big Boys of Wall Street? Then, YOU stop playing with them. I haven't watched cable TV in 7 years. I find my news and entertainment elsewhere. What would happen if most Americans did that, hmm? The Big Boys wouldn't be quite so Big, would they?
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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?
I think you're right.
I also think that some channels that are less popular will simply get removed, regardless of the wishes of the fans of _those_ networks feel, which can be unfortunate if you happen to be a fan of that network. I may not care about HGTV but what if it were more popular than Boomerang? Which channel is going to get dropped first to make way for another channel?
Sure if you got the same number of channels it would be the same price, but if you only picked up the channels you want, it may make the cost go down for the consumer. I'm sure someone else really wants all of the religious/CSPAN/Oxygen network choices, but I don't. It might also force some networks to reevaluate. MTV, for instance, might take note if 50% of their viewers dropped MTV and MTV2 picked up.
Honestly, out of the 100 channels you get, how many do you spend more than a fraction of a second surfing past? I probably only watch 20% of the channels I get. If the rates were to double for all of basic cable, but I only paid for the 20% I wanted, I'm still saving.
One downside I see is that networks could become like TV shows. If it doesn't perform well in the first year, it'll get pulled for something else.
My city has been taking it to the city council about our cable company for TWENTY-SEVEN YEARS. They were fighting Cox before I was born - hell, back when having cable was a social status symbol and most people around here didn't even know what the local cable company was, the city council was listening to people fighting the cable companies almost every week.
What's it gotten us? Not damn shit. Bresnan bought Cox, Charater bought Bresnan, and each one proceedes to screw us harder than the last one, and more people went to the city council to complain.
So, we ran a referrendum. It passed overwhelmingly, and we kicked Bresnan out in favor of Nova (who, at the time, offered 50 channels for $25 a month, compared to Bresnan's 30 channels for $35)
Guess what happened? Bresnan bought Nova, and we got fucked again - as did everybody up in Gladwin county who already had Nova for their cable. We got our 20 extra channels, but we also got another fifteen bucks a month on our bill instead of ten off.
Last year, Charter cut seven channels and increased the price by $8. This year, they're planning to cut two channels and add one that will soon be merging with a channel we already get anyway, and they've already tacked $5 on the bill, with $10 more comming this summer.
I think it's interesting that rates have gone up astronomically SINCE deregulation. Why is it that companies go before Congress and say "If we didn't have all this government oversight and regulations to deal with, we would be able to make more money and charge the consumers less." Well, guess what? The airlines, the savings & loan crisis, the energy companies all started either going bankrupt or ripping everyone off. Then, of course, they go back before Congress and say "It's not our fault, you didn't regulate us!"
I don't know about your town, but in my town, Winchester, VA, USA, I can stand in one parking lot and throw rocks in four directions, hitting, in order, a Target, a Wal Mart, a Lowes, and a Home Depot.
None of them have a local monopoly, but they all call the law when you throw rocks at them.