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FCC misses chance to put lid on skyrocketing cable bills

Thursday, November 18, 2004
Contact: Susanna Montezemolo
(202) 462-6262

FCC Misses Opportunity to Put Lid on Skyrocketing Cable Rates by Skewing Cable Choice Report to Congress

Cable a la carte analysis rigged in favor of large cable companies

(Washington, D.C.) – As cable companies across the nation hike rates yet again — in some cases by double-digit increases — the Federal Communications Commission (FCC) today missed a prime opportunity to help put a lid on higher cable bills by skewing its report to Congress on the benefits of letting cable customers pick and pay only for the channels they want.
Consumers Union said an FCC analysis released today on cable “a la carte” is dramatically flawed because it studies a model not advocated for by consumer groups. Specifically, it focuses primarily on a mandatory a la carte system rather than the voluntary system Consumers Union and other public interest groups have proposed. It also inflates the cost by assuming that everyone would have to buy or rent a special cable box, when consumer groups have said that the proposal should target digital cable subscribers, who already pay for the box.
“The study was rigged against consumers in favor of large cable companies, giant broadcasters and other media behemoths,” said Gene Kimmelman, senior director for public policy and advocacy for Consumers Union, the non-profit publisher of Consumer Reports. “If the FCC had studied our actual proposal – a voluntary a la carte and mixed-channel bundling approach targeting digital cable subscribers – it would have concluded that it would lead to lower prices, greater choice and more diverse programming for consumers.”
Although the FCC found much to criticize about a mandatory a la carte system, it was more positive about the actual proposal – a voluntary system where cable operators, if they chose to do so, could offer consumers channels individually and in themed bundles, in addition to their current offerings of expanded basic and digital tiers.
“It is encouraging that the FCC was more optimistic about the voluntary a la carte system that policymakers have proposed,” said Susanna Montezemolo, policy analyst with Consumers Union, noting that the Commission might have looked upon the voluntary system even more favorably if it had properly calculated the cost of the converter boxes. “We are confident that if the FCC had examined this type of system in detail, it would have concluded that a la carte would likely lead to greater cable choice and lower prices for consumers.”
A la carte would give independent and diverse programmers the cable audiences they currently can’t reach, as consumers could buy these new channels at a cost of $1 to $3 each, while having the option to also buy large channel packages. Meanwhile, more programmers could remain truly independent, not beholden to corporate interests, CU said.

To read the Consumers Union analysis of the benefits of cable a la carte click here.