FCC to Sample TV a la Carte

WASHINGTON -- The ongoing debate over whether TV viewers in the United States should be able to pick their cable channels on an a la carte basis continues Thursday when the Federal Communications Commission holds a symposium on the controversial question.

Already, several lawmakers in Congress support new rules that would require cable operators to offer an a la carte option rather than force viewers to take all-or-nothing "tiers" of programming.

The cable industry, however, derides a la carte as a faulty concept that would destroy the economics of the industry and put some cable channels out of business.

Unlike many FCC events that involve broad questioning from commissioners, Thursday's symposium will feature staffers in the FCC Media Bureau. They are collecting data for an upcoming report on a la carte cable due to Congress on Nov. 18.

The report won't include any specific recommendations, but its tone -- especially on whether a la carte could result in huge price hikes -- could influence whether forces in Congress continue to pursue the issue.

The cable industry has been girding for the symposium.

"We certainly expect an opportunity to present our viewpoint on why a la carte would be harmful to consumers," said Brian Dietz, a spokesman at the National Cable & Telecommunications Association.

Cable industry reps are expected to argue that additional investments in equipment and other administrative costs would result in higher prices for all cable customers.

The FCC will also examine the situation in Canada, where several cable operators offer a la carte programming choices to TV viewers. Philip Lind, vice chairman of Canadian cable operator Rogers Communications, will testify.

A la carte backers have used the Canadian model as an argument for a la carte in the United States.

But Michael Hennessy, CEO of the Canadian Cable Television Association, has called a la carte a "none-too-successful aspect" of the Canadian system. Dietz noted the "irony" that digital TV penetration is actually lower in Canada than the United States.

Consumer groups will wage their own assault at the symposium.

In a presentation, the Consumer Federation of America will lay out a "mixed bundling" concept in which a la carte channel menus would only affect existing digital subscribers, to keep down equipment costs.

The group also argues the cable industry exaggerates costs to scare lawmakers.

"They have painted a doomsday scenario with no relation to reality," said Mark Cooper, the CFA's director of research. He criticized a cable-industry-funded study (PDF) released by Booz Allen Hamilton earlier this month.

The study warned that even partial a la carte could cost the cable industry between $17 billion and $34 billion, pushing up cable prices by 7 percent to 15 percent. It assumed that cable operators would need to deploy a digital set-top box for every TV hooked up to cable, at a cost of $185 per box.

"We think that's just bunk," said Cooper. "They have a whole series of costs that are just fiction."

A Booz Allen Hamilton representative will be on hand Thursday to defend the study.

FCC staffers, on the other hand, will try to make sense of an increasingly complex debate.

From Wired.com

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