FCC Video Inquiry Asks about Telecom TV, a la Carte
The FCC is poised to eye telco TV products and a la carte in a pay-TV competition report reflecting Chmn. Martin’s and colleagues’ concerns about cable rate increases. As expected, a notice of inquiry (NOI) approved at a Thurs. FCC meeting will study how newer services, including IPTV, affect the video market(CD Oct 11 p7). The NOI seeks data on “newer distribution methods,” including IPTV, online video streaming and distribution of programming over wireless devices, Media Bureau attorney Marcia Glauberman said.
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The NOI includes “fairly broad” questions related to a la carte, Media Bureau Chief Donna Gregg said afterwards: “We're just hoping people will come forward with as much information as is out there.” In addition to asking about family tier and bundled channel offerings, the latter promoted in Martin’s February a la carte report, “the draft NOI seeks detailed information regarding developments in foreign markets,” Glauberman told the meeting. Other questions address the DTV transition, she said. Cable operators suggest selling channels individually will cost customers more. “There has never been more competition in the video market,” an NCTA spokesman said: “Consumers today can choose from at least three and up to five different [video] providers.”
Martin and other commissioners endorsed increased pay-TV competition as a possible way to contain rate hikes. “I think all of us agree that additional competition can only be beneficial,” Martin said: “We have seen cable rates continue to climb.” Comr. Copps said access to more TV options gives consumers “big rewards… and very importantly, lower prices.” An AT&T official told us after the meeting that FCC approval of its purchase of BellSouth (see separate story) would mean more deployment of U-Verse IPTV service, perhaps inhibiting cable rate growth.
BellSouth couldn’t sell an IPTV product of its own due to high programming costs overbuilders also face, Robert Quinn, an AT&T senior vp, said: “BellSouth couldn’t make the plan work… Approving this merger is a way for that to happen.” If the FCC approves the transaction, “we are going to take U-Verse and IPTV into the BellSouth 9-state territory… and hopefully end up lowering the cable bills [customers] have to pay,” Quinn said.
FCC officials sought more reliable data after the 2005 video competition report said industry data weren’t adequate for deciding whether cable is bought by 70%-plus of homes passed by their systems (CD Feb 13 p2). “The NOI… emphasizes the importance of receiving complete and accurate information directly from commenters,” Glauberman said: “To the extent that commenters do not supply needed information, the report will use publicly available data as well as information submitted in other Commission proceedings.” Glauberman didn’t specifically invoke the 70/70 threshold of percentages of U.S. homes passed by cable and the portion of such homes that subscribe. A media activist lamented the Commission’s inaction on 70/70. “In approving the Adelphia deal last July, every commissioner recognized that the cable market has grown increasingly concentrated and that independent programming has suffered,” Media Access Project Senior Vp Harold Feld said: “A finding on the 70/70 test would give the Commission the power to address these problems.”
Martin hopes by year’s end commissioners will okay a video franchise review order proponents tout as paving the way for telcos to get faster municipal approval to sell TV, he said. “I've publicly said before that we'd like to move forward on that item by the end of the year,” he told us after the meeting: “I still hope to be able to do so.”