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The Honolulu Advertiser
Posted on: Friday, February 10, 2006

FCC: 'A la carte' cable cheaper after all

By Leslie Cauley
USA Today

Consumers could shave as much as 13 percent off their cable TV bills if they were allowed to buy channels individually, a new report from the Federal Communications Commission concludes.

The FCC's finding that people would benefit from an "a la carte" system undercuts a bedrock principle of the cable industry that big bundles of channels deliver the best value for consumers. Programmers have long refused to sell their channels a la carte, saying it would erode their subscription fees and ad revenue.

But cable TV bills keep rising 2 percent to 6 percent annually. That rise is due, in large part, to programming costs.

The FCC's report, prepared at the behest of Chairman Kevin Martin, reversed a 2004 FCC report released under the prior chairman, Michael Powell. The Powell report had affirmed the industry's claim that a la carte programming would mean less choice and higher prices for viewers.

Gene Kimmelman of Consumers Union hailed the new report and predicted it will help spur congressional action to alter the way cable programming is sold.

"I think this will invigorate policymakers to pressure the cable industry and programmers to deliver the kind of channels consumers want, and at a lower price," Kimmelman said.

Sen. John McCain, R-Ariz., released a statement saying he planned to introduce legislation next week to ease franchising restrictions for any video providers that offer programming on an a la carte basis.

Senate Commerce Committee Chairman Ted Stevens, R-Alaska, said in a statement: "If a la carte is not more expensive for consumers, I will support an effort to take such an approach."