Key House leader assails a la carte cable TV

Panel chairman criticizes bid to revise subscriptions

July 15, 2004|By BLOOMBERG NEWS

NEW YORK - Comcast Corp. and other cable operators won support yesterday from Republican and Democratic lawmakers who criticized an idea to let consumers buy channels individually rather than in packages.

"We have a marketplace that is working," Rep. Fred Upton, the Michigan Republican who heads the House telecommunications subcommittee, said at a hearing. "The government must resist the urge to re-regulate and tinker with this marketplace."

No bill has been introduced to require so-called a la carte service, which would dismantle the current system in which cable operators select the channels viewers get in packages.

The current approach gives companies such as Comcast, the biggest cable operator, revenue from channels that viewers might not otherwise want.

Consumer advocates and family groups are pushing the idea with the support of several U.S. senators, saying it would lower prices and give consumers more control over what channels to buy. Cable-TV prices rose 56 percent from 1996 to March 2004, almost three times faster than inflation, according to the Bureau of Labor Statistics.

Cable and satellite-TV companies, such as News Corp.'s DirecTV, say a la carte service would lead to fewer channels and higher prices.

Cable operators would have to provide every subscriber with a set-top box, create new marketing and billing systems, and raise license fees for video-programming services, Thomas G. Baxter, president of Time Warner Cable, told the legislators.

"Subscribers might receive only the channels on which they place the highest value," Baxter said. "But they might pay more for those few than they now pay for many. And they would no longer have the option of occasionally watching the channels they lost."

Upton's criticism of channel-by-channel pricing was echoed yesterday by Rep. John D. Dingell of Michigan, the senior Democrat on the House Energy and Commerce Committee.

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