Opposition Mounts to Martin Channel-Ejection Plan
Opposition rose this week to FCC Chairman Kevin Martin’s proposal to let pay-TV providers sell channels separately when they cost distributors more than 75 cents a month per subscriber (CD April 9 p8). In a stream of letters and meetings, sports leagues, networks and minority organizations asked the FCC not to regulate deals between programmers and pay-TV companies. Six leagues attacked the April 8 proposal. No a la carte order is before commissioners, but cable and other executives fear Martin may circulate one, they said. An FCC spokesman said the agency is study channel tying’s impact.
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Martin’s proposal “targets for disparate treatment the most popular programming networks,” including those carrying sports, executives of the NBA, NHL, NCAA, NASCAR, Major League Baseball and Women’s National Basketball Association wrote Martin on Wednesday. A la carte rules would mean pay- TV companies have to pay higher per-subscriber fees for popular channels, which they'd “almost certainly pass on” by raising subscription fees, they wrote. The FCC lacks authority to issue a la carte rules, they said.
The same point was made in a Tuesday meeting with Commissioner Jonathan Adelstein by executives from the Motion Picture Association of America, Disney, NBC Universal, News Corp., Time Warner and Viacom. Officials with ESPN Desportes and Fox Sports en Espanol told Adelstein “there is no reason or need” for a la carte rules of “any kind” for wholesale or retail arrangements, a Wednesday ex parte said. They said the same to an aide to Commissioner Michael Copps.
The 75 cent proposal was slammed Thursday by 15 minority, civil rights and other groups in a letter to FCC members. Wholesale a la carte rules are “a close cousin of the much-rued and discredited retail a la carte cable pricing proposal” rejected by Congress, industry and others as harmful to minority programmers, wrote the Hispanic Federation, National Congress of Black Women, National Council of Women’s Organizations, National Gay & Lesbian Chamber of Commerce and others. Signers are “puzzled” by Martin’s plan to set “an arbitrary price,” fearing that any a la carte mandates will wreak “havoc on diversity by delivering a crushing blow to channels targeting minority comminutes,” they said.
Channel tying is a pressing issue for small cable operators and those serving rural areas, the FCC spokesman said. Programmers try to get cable operators, satellite-TV providers and telco TV sellers to buy more channels by giving them volume discounts. Small operators say they won’t sell channels individually, a claim programmers contest. The spokesman said the FCC is reviewing comments on a recent notice about channel bundling “to see how this practice impacts consumers who may bear the costs of unwanted programming in the form of higher prices.”