November 20, 2004|By KNIGHT RIDDER/TRIBUNE
DALLAS - The ability to buy cable-TV service a channel at a time, rather than bundled by the dozens, might cost most families more, not less, money, the Federal Communications Commission concluded in a report released yesterday.
Most Americans watch too many TV channels for government-imposed a la carte pricing to reduce rising cable rates, the FCC told Congress, which has been considering such regulations. Consumer and parents groups blasted the FCC study, saying it skewed the results in favor of the nation's large cable companies.
A la carte pricing would probably force cable companies to spend more money on equipment, customer service and billing and office support, costs that would be passed on to consumers, the FCC said.
Cable and satellite-TV companies, which have long argued that regulations would increase rates, welcomed the report's conclusions.
The FCC said households that bought nine or fewer cable channels might benefit from buying their TV service by the channel. But on average, it said, families watch 17 channels and could pay as much as 30 percent more if they paid for each separately.
Rep. Joe L. Barton, a Texas Republican who chairs the House Energy and Commerce Committee, requested the report.
Steady increases in cable rates nationally - they have risen 34 percent over the past three years, according to the Government Accountability Office - have heightened interest in a la carte service.
Consumer advocates contend that Americans pay for more channels than they want because cable companies sell service in tiered bundles. Consumers who want to watch only ESPN and HBO, for example, have to pay for dozens of other channels they don't want.
Consumers Union argues that a la carte service could help cable companies win customers who have tuned out because of high rates.
The group said the companies could sell channels for $1 to $3 a month each to digital subscribers, using existing cable decoders to keep costs down.
Big cable and media companies are reluctant to sell channels piecemeal because it would fundamentally change negotiations between Hollywood content producers and the companies that distribute content, said Gary Arlen, an industry consultant based in Washington.
