Let's get serious about a la carte cable, satellite TV

David Lazarus
San Francisco Chronicle May 2, 2007

Federal regulators issued an extraordinary report the other day that basically says existing methods of shielding kids from violent TV programs -- the V-chip, parental controls, etc. -- aren't working, and that one alternative answer is giving consumers greater choice in how they purchase channels.

In other words, it's time for an a la carte system by which people pay for only the channels they want to watch.

"I have long encouraged industry to give parents more direct control over the television content that comes into their homes," Kevin Martin, chairman of the Federal Communications Commission, said in a statement.

"Cable and satellite operators could enable parents to avoid purchasing channels that tend to show excessively violent programming by allowing them to purchase channels individually or in smaller bundles as they do for 'premium channels' like HBO," he said.

In its report to Congress, the FCC determined that "there is strong evidence that exposure to violence in the media can increase aggressive behavior in children, at least in the short term."

It found that "although the V-chip and TV ratings system appear useful in the abstract, they are not effective at protecting children from violent content."

"An a la carte regime would enable viewers to buy their television channels individually or in smaller bundles," the commission concluded. "In this manner, consumers could avoid purchasing those channels that tend to air more violent programming."

The FCC isn't alone in desiring a la carte programming. An Associated Press survey last year found that 78 percent of consumers favor paying for only the channels they want to watch, as opposed to receiving bundles of channels selected by cable and satellite companies.

The cable and satellite industries, which profit handsomely by selling customers channels they may never watch, have been vocal in opposing such a change.

"It's not a good idea for consumers," Brian Dietz, vice president of the National Cable & Telecommunications Association, told me. "It would result in higher prices for most consumers and drive out diversity in programming."

This is an argument that cable companies in particular have been making for years. They say that consumers pay less for channels in programming bundles because costs are spread among numerous subscribers.

They also say that this system allows less-popular channels to ride on the coattails of more-popular fare, thus providing consumers with more viewing options.

"Newspapers are sold in a bundle," Dietz said. "Eggs are sold in a bundle. Many consumer products are sold where you get a discount if you buy in a bundle."

I can't speak to eggs, but the newspaper analogy simply doesn't hold up. Dietz and others in the industry like to point out that you can't pay for just the business section, say. You have to buy the whole paper.

But a newspaper represents a single product, just as CNN, for example, represents a single channel. TV viewers can't pay for Larry King but reject Wolf Blitzer. If they want CNN, they get CNN.

But should they also be forced to pay for Fox News if they never watch that channel?

"It's more apt to compare programming bundles to magazines," said Jeannine Kenney, senior policy analyst at Consumers Union. "You shouldn't have to buy Cosmopolitan just because you want to read Field and Stream."

She disputed industry claims that a la carte would lead to higher prices and less diversity. Kenney said a popular channel like ESPN costs more than $3 per subscriber under the existing system because Disney, the channel's owner, can get away with setting the price so high.

"When you actually allow the marketplace to reflect supply and demand," she said, "prices find equilibrium." Many cable and satellite channels, Kenney noted, cost as little as 25 cents per subscriber.

For its part, the FCC says a la carte programming could lower average cable and satellite bills by as much as 13 percent. Surveys show that even though most cable and satellite subscribers receive well over 100 channels under current bundles, they watch no more than 17 channels on a regular basis.

In its report, the FCC observed that the average American household has its TV turned on 8 hours and 11 minutes every day, and that kids watch between two and fours hours daily.

"By the time most children begin the first grade, they will have spent the equivalent of three school years in front of the television set," the report said.

That may never change. But a la carte could limit exposure to violent programming by giving parents more control over what comes into the house.

At the same time, a la carte allows consumers to avoid having to subsidize programming they find objectionable. Why should a family that wants the National Geographic Channel, say, also have to help keep MTV afloat?

"This is a fundamental question of fairness that resonates on Capitol Hill," said Kenney at Consumers Union.

Don't be surprised if the FCC report results in new legislation, and soon.

Premium on privacy: AT&T customers are being notified in their monthly statements that the cost of having your phone number unlisted will jump on June 1 from 28 cents monthly to $1.25 -- a more than quadrupling of the fee.

Gordon Diamond, an AT&T spokesman, said the company's charge for an unlisted number hasn't gone up for 20 years. "We are making the change now to simply put our prices in line with others in the industry," he said.

Verizon Communications, the second-largest U.S. phone company (after AT&T), has charged customers $1.50 a month for an unlisted number since 1995.

"It's a big charge for a service they don't do -- not publishing your number," said Michael Shames, executive director of the Utility Consumers' Action Network in San Diego. "Or if there is a service involved, it's protecting people's privacy."

Diamond said about a third of AT&T's customers choose to have their numbers unlisted. The company has roughly 8 million residential lines in California.