House Lawmaker Considers a la Carte Bill

By David Hatch
National Journal

Rep. Mark Kirk, R-Ill., a member of the House panel that funds the FCC, may offer an amendment or stand-alone legislation that would require cable television operators to provide per channel — so-called a la carte — programming.

Word that Kirk, who sits on the powerful House Appropriations Committee, is exploring a la carte pricing emerged as the cable industry released two reports criticizing the approach. Kirk views the a la carte approach as a way to lower cable rates and give consumers more autonomy over content entering their homes.

To be germane, any a la carte amendment to an annual appropriations bill likely would focus on FCC operations regulating the cable industry, a source said.

The cable industry already is seeking to blunt upcoming legislation by Sen. John McCain, R-Ariz., that would grant cable operators relief from local franchise regulations if they adopt per channel pricing. The measure, originally set for introduction in February, has been bumped to late March or early April.

Both new cable industry analyses attempt to rebut an FCC report last month endorsing a la carte, a reversal of the agency's policy since 1994 that had rejected the option as too expensive.

In February, the agency concluded that most consumer bills would decrease and that its original position was based on flawed or incomplete data.

But Walt Disney Co. lobbyist Preston Padden countered that the FCC report overlooks "a lot of facts that are inconvenient" for a la carte proponents.

"It assumes away the cost of providing addressable digital set-top boxes on every TV" that would be required for per-channel content, Padden contended.

Padden said consumers would have to pay an additional $5 to $8 per month, per box. Disney owns three major cable channels: ABC Family, the Disney Channel and the sports channel ESPN.

The cable industry prefers to offer bundled programming packages, arguing that channels cost less for subscribers when marketed that way. But critics say consumers now pay for more channels than they watch.

The industry also is worried that the FCC's stance will embolden groups concerned about television "indecency," such as Concerned Women for America and the Parents Television Council, which have made per channel pricing a rallying cry on Capitol Hill.

Another concern is that Senate Commerce Chairman Ted Stevens, R-Alaska, who brokered an agreement among major cable operators to offer "family friendly" tiers, has left the door open on a la carte. Stevens recently said that if per channel programming is "not more expensive for consumers," he might support it after exploring the "downside" with video providers.

The Disney-funded report, prepared by the financial firm Cap Analysis, said the FCC "got it right the first time." The authors insist that the FCC's latest assessment contains almost no facts rebutting its earlier findings "beyond noting an inconsequential methodological error."

The second study, commissioned by the National Cable and Telecommunications Association, was written by Steven Wildman, a professor at Michigan State University.


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