FCC is urged to study cable-TV pricing

Key legislators ask agency to assess if channels sold `a la carte' would cut costs

May 20, 2004|By BLOOMBERG NEWS

WASHINGTON - Senior lawmakers of both parties urged the Federal Communications Commission yesterday to study whether cable-television prices would fall if channels were sold individually rather than bundled together.

Rates charged by cable-TV companies have risen 56 percent since 1996, according to the General Accounting Office, the investigative arm of Congress. Consumer advocates who have pushed for so-called "a la carte" pricing have said it would result in lower programming costs and higher-quality programs. Cable companies such as Comcast Corp. dispute that contention.

The letter asks that the FCC issue a report in six months. Its signers include Rep. Joe L. Barton, the Texas Republican who chairs the House Energy and Commerce Committee, and Rep. John D. Dingell of Michigan, the senior Democrat on the committee.

"It would be highly unusual for the FCC to deny a request from our governing committee in Congress," said Michelle Russo, an FCC spokeswoman.

Competition from satellite networks such as News Corp.'s DirecTV has had little effect on cable-TV prices, prompting cuts of less than one-half of one percent on average, the GAO has said.

U.S. senators have urged cable-TV executives to reduce prices, though they haven't yet introduced legislation seeking to make that happen.

James O. Robbins, chief executive of Cox Communications Inc., and George W. Bodenheimer, president of Walt Disney Co.'s ESPN Inc., have told Congress that a la carte pricing would result in higher prices for subscribers of cable-TV.

"A la carte pricing would be very harmful to ad-supported cable networks and consumers by reducing programming diversity and driving up the cost of cable and satellite television," the National Cable & Telecommunications Association, which represents cable-TV companies, said in a statement yesterday.

Sen. John McCain, the Arizona Republican who chairs the Senate commerce committee, has urged cable executives to consider a la carte pricing. Sen. John B. Breaux, a Louisiana Democrat who serves on the committee, has opposed the idea.

Consumer advocates praised the lawmakers' letter. "The cable industry will no longer be able to hide behind Chicken Little predictions," the nonprofit Consumers Union said in a statement.

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