McCAIN, DEAL LOOKING FOR WAYS TO MOVE A LA CARTE MEASURE
As Senate Commerce Committee Chmn. McCain (R-Ariz.) and Rep. Deal (R-Ga.) said Wed. they would search for ways to get an “a la carte” or tiered pricing package bill through Congress this year, activist groups said they had the money and will to carry the issue forward to next year if Congress fails to act. Deal has proposed an amendment to the Satellite Home Viewer Improvement Act (SHVIA), but acknowledged his amendment would likely have to apply only to DBS providers. McCain said he would try to move a la carte through an amendment, but said it was looking less likely that anything but the most essential legislation would move this year.
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Armed with an ad campaign, survey results and the support of McCain and Deal, a group of mainly socially- focused organizations said their effort was focused more on cable operators than Congress. “Our appeal is to the cable companies,” said Jan LaRue, of Concerned Women for America (CWA). “We think it best that industry makes these changes itself.” Phil Burress of Citizens for Community Values announced a print and radio ad campaign and said there was “plenty of money in the bank” to continue the campaign in the new year. Consumers Union, Parents TV Council, Focus on the Family and Family Research Council are also participating.
LaRue also unveiled a poll that she said showed overwhelming public support for a la carte, though NCTA said the poll didn’t reflect the consequences of a la carte pricing. The CWA survey said 80% “disagree” with the way the cable pricing system currently functions; 66% of cable subscribers said they would prefer to “choose for themselves” their channels; and 66% of non-cable subscribers (38% of the 1,000 people surveyed) said they were more likely to subscribe to cable if more channel choices were offered. The survey also said 73% agreed that until cable offers choices, it should enforce decency standards. LaRue said.
NCTA said a la carte pricing would raise rates, and those surveyed weren’t informed. “Our guess is that if consumers were asked whether they'd prefer to have cable or satellite service for free, they'd also answer with a resounding ‘yes,'” said an NCTA spokesman. “The fact is that cable consumers couldn’t enjoy the diversity of programming they have today if programmers had to sell and package their services in an a la carte manner.”
McCain, who has long advocated a la carte pricing, said cable prices were rising at up to 6 times the rate of inflation. While McCain’s emphasized free-market ideals, Deal spoke more about the use of a la carte as a consumer choice weapon against indecent programming. But Deal also said he was wary of cable network claims that a la carte pricing would lead to price increases: “They're the ones that control the prices.”
Deal also said a la carte was a long-shot for the SHVIA bill because “leadership wants a clean bill.” But he also said he was talking with some members of the House Judiciary Committee, which is scheduled to markup SHVIA legislation today (Thurs.)
With talk on Capitol Hill of imposing a la carte on multichannel providers, NCTA issued a white paper at its convention in New Orleans, arguing that a la carte would result in fewer choices, less diversity and higher prices. NCTA said a govt. policy requiring a la carte distribution of cable and satellite networks would result in a fundamental restructuring of the cable programming business. The paper said negative consequences would far outweigh any “theoretical benefits.”.
The paper said the current system of packaging has resulted in substantial growth in cable networks, with 339 national and 84 regional cable networks available, offering programming in many genres. Whereas basic cable networks currently generate revenue from 2 sources -- subscription fees and advertising -- removing the networks from a tier that’s available to several million households will require them to recoup lost ad fees mainly by increasing their monthly subscription price, the report says. The report also said implementing a la carte would create customer service problems because cable companies would need to revamp order- taking and billing systems, and customer service procedures.