ADELSTEIN WORRIES ABOUT A LA CARTE'S EFFECT ON DIVERSITY
FCC Comr. Adelstein said he was concerned about an apparent willingness by some lawmakers to impose indecency standards on cable. In a speech to the American Cable Assn., Adelstein noted that the cable industry is willing to provide blocking technology for consumers who don’t want certain channels. Although he acknowledged that children can’t distinguish between broadcast and cable, he said it would be hard for the govt. to force family tiers onto cable. “Families are different,” Adelstein said. “My family’s interests might be different than yours.”
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Adelstein said some families want the History Channel for educational purposes, but others might want to block it because of the violence of war scenes. And what’s appropriate for a family with teenagers wouldn’t necessarily be appropriate for a family with toddlers, he said: “Who’s going to judge?”
Adelstein told the small and rural cable operators he was concerned that a la carte programming would have a negative effect on diversity of channels as well as “other unintended consequences.” His remarks came the same day a group of lawmakers asked the FCC to study the issue (see separate story.) Adelstein said the FCC should “dig in” and get answers on a la carte programming and specifically on whether an approach embraced by Rep. Deal (R-Ga.) made sense. Deal, who withdrew his amendment to the SHVIA re- authorization act, would have allowed cable operators to buy programming a la carte. Adelstein said the FCC needs to study a “Deal-type approach where the smaller operators aren’t forced to swallow bundled programming.”
Adelstein said he also was concerned about retransmission consent practices -- an issue dear to the hearts of ACA members, who for years have complained that large programmers like Disney/ABC and Viacom have forced them to carry channels they don’t want, or demanded cash payments. Some ACA members have called the practice “extortion.”
Adelstein said he realized small operators have some of the highest supply costs in the industry and are bearing escalating programming costs as well, without the benefits of scale large MSOs have. Plus, they also face increasing competition from DBS, and many small and rural cable operators must lower their prices to compete. “I can’t imagine that you can maintain that kind of a squeeze forever. The pressure has got to be enormous,” Adelstein said.
That the FCC is allowing media companies to grow isn’t helping, Adelstein said, noting that the FCC has yet to set a new horizontal ownership cap for cable. “These huge media giants with their extensive reach and their market power in both programming supply and distribution now are dictating how programming is packaged and bundled,” he said. “This concentration of power hurts small, independent players and erodes the Commission’s longstanding goals of competition, diversity and localism.”
Adelstein expressed support for public broadcasters getting carriage on cable systems. “Those people are clearly serving the public interest. They're doing a lot of community affairs. They're doing educational programming and they offer incredible programming for people with families and for everybody who isn’t necessarily fully accounted for in the market value of what they're doing. So we want to make sure that they get carriage,” Adelstein said.
On an earlier panel, Jon Cody, aide to FCC Chmn. Powell, said the agency will “get down to the economics” of a la carte. He also said the must-carry proceeding would likely be resolved in the context of the DTV transition plan floated by FCC Media Bureau Chief Kenneth Ferree. The FCC plans to put a notice out on how to resolve questions surrounding the 15% of citizens who rely on analog TV sets to get over the air broadcast signals. Cody also said there would be a Notice of Inquiry the next few weeks for the FCC’s annual video competition report.
Greg Cooke, deputy dir.-Office of Homeland Security in the FCC’s Enforcement Bureau said he expected a rulemaking in the late summer or early fall on the entire reach of the Emergency Alert System.