Monday, March 29, 2004

McCain and Cable

It seems that John McCain want the FCC to force cable companies to allow us to order our cable channels ala carte in an attempt to reduce the number of unwanted channels consumers are billed for. It is an interesting proposal, but one that raises questions in my mind.

McCain wants FCC to try a la carte cable pricing test

26 Mar 2004 2:12am EST - By Brooks Boliek | WASHINGTON -- The chairman of the Senate Commerce Committee thinks it's time to begin a government-mandated experiment that could end the cable industry's practice of charging people for a group of channels whether they want them or not. Sen. John McCain, R-Ariz., a longtime critic of rising cable rates, said Thursday that he thinks the FCC should begin an pilot program that would determine whether offering cable channels a la carte would benefit consumers. McCain expressed support for the experiment to reporters, giving support to an idea initially proposed by Consumers Union director Gene Kimmelman during a hearing on cable rates. "We're looking at Mr. Kimmelman's suggestion of some kind of pilot program," he said. "I plan to talk to the FCC about it." Consumers are chafing on the programming leash the cable industry holds, and it's time to see if giving them broader latitude will help them, McCain said. "Right now, they have all the choice of a Soviet election ballot," he said. Visit HollywoodReporter.com for more ...

1) Do the cable companies actually charge extra for these small channels or do they themselves buy them in a "bundle?" i.e. all USA networks channels are bought simultaneously.

2) What will this do to advertising revenues? Since viewership will drop, losing the channel surfer, how will this affect the market?

3) Channels that are owned by the cable provider, do they cost money, or do the ad revenues from these channels offset some consumer costs? (Comcast owns TechTV, now, and G4 and is combining them).

4) How do new "niche" marketing channels promote themselves?

5) What if I do want all those channels? Will my overall cost increase?

Anyway, some questions. Not a lot of answers, but I think this sounds like a hairball scheme. Doing something to promote competition locally, that might reduce costs, by changing ownership rules and things like that, but all these changes have unforeseen consequences.
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