Rusty Benson

AFA Journal associate editor

May 2006 – If the Federal Communications Commission (FCC), pro-family groups and consumers get their way, cable television customers may soon receive and pay only for the channels they want. The change could be mandated through legislation or come about as cable companies voluntarily offer the channels a la carte.

Presently, the majority of cable companies and program producers are unfavorable to such a change, claiming that in the end consumers will have fewer programming choices and pay more each month. They say the practice of offering only packages of channels – especially the “expanded basic” bundle – is the most cost effective method of delivering their products. In recent decades, the industry has built its business around that model.

AFA and a coalition of pro-family groups who support a la carte pricing see the change as a tool for families to protect themselves against offensive programming content. The 24-member coalition campaigning for cable choice includes other high profile groups such as Focus on the Family, Family Research Council, Morality in Media, Concerned Women for America (CWA) and Parents Television Council.

“It only makes sense for a cable company to allow a family to pick what channels they want, and only pay for those,” said Tim Wildmon, AFA president. “Such an a la carte approach would also help parents keep smutty television out of their homes.” 

The debate over a la carte came to the public’s attention in the summer of 2004 when pro-family groups lobbied the FCC and key members of Congress to enact legislation that would require cable companies to allow consumers to pay only for the stations they selected. In response, Congress told the FCC to study and report on the impact of a la carte pricing. 

In November 2004 the Media Bureau of the FCC issued its report to Congress. The report, which contained the Booz Allen Hamilton Study (BAH), concluded that a la carte pricing was not economical. 

However, a re-examination of the report revealed errors in calculations, underlying assumptions and conclusions of the study, particularly in the BAH. As a result, the FCC reversed its earlier findings, stating in a February press release that consumers would be “better off under a la carte. …” 

The Further Report on the Packaging and Sale of Video Programming Services to the Public stated that in certain scenarios customers could purchase up to 20 selected channels and still save as much as 13% on their cable bills. Although the popular “expanded basic” package commonly includes 200-300 channels, most viewers only watch 15-17 channels a month, according to industry statistics.

Currently cable companies base their advertising rates on the number of people their systems reach. Expanded basic – the “big bundle,” in industry lingo – reaches the most viewers, so it commands the largest subscription fees and ad rates. A la carte would likely reduce the number of big bundle customers, thus cutting into cable industry profits.  

Critics largely agree that loss of profits is the reason the cable industry continues to stand against a la carte. In March the National Cable and Telecommunications Association and The Walt Disney Company released separate studies that support that position. A Disney executive called a la carte “an appealing and superficial sound bite.”

However, CWA’s Lanier Swann says the FCC’s new report shows that the claim that a la carte will cost customers more money is untrue. Congress now has no excuse not to act on legislation calling for cable choice, she says. 

Pro-family leaders have applauded FCC Chairman Kevin Martin’s support of a la carte. Along with recent large fines against CBS, they see a la carte as breaking the cable industry programming and pricing cartel while empowering families to reject offensive channels.

Other countries that already provide a la carte pricing include Spain, Italy, Canada and Hong Kong.  

Action needed
Call or write your federal lawmakers and let them know that you –along with 78% of consumers, according to a recent Associated Press poll – support a la carte pricing for cable television. See here to learn how to contact your elected officials.