RE: Verizon's Latest Plan For Cable Fees Could Lower Your Cable Bill -- Eventually [telecom]

Bill Horne Verizon's Latest Plan For Cable Fees Could Lower Your Cable Bill -- Eventually > > By Alexis Kleinman > > What if, instead of paying for all of the hundreds of channels that > your cable provider offers when you sign up, you could choose exactly > which ones you want? That's definitely a dream of most cable > subscribers, riled by ever-high fees. And while Verizon isn't ready to > start offering a-la-carte channels, a new plan of theirs, reported in > The Wall Street Journal, could take us one step closer to making that > dream a reality.

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Good luck with that. I worked in the retail end of CATV industry for

25 years and I've been writing about it for another dozen years since I retired. "The dream of most cable subscribers" is also the dream of many CATV retailers.

Retailers are companies that sell video services to end consumers; e.g., franchised cable TV companies, non-franchised "private cable" companies, telephone companies (Verizon FiOS, AT&T U-Verse), and satellite TV companies (DirecTV and Dish Network).

Programmers are companies that produce video programming and provide it to retailers. Programmers fall into three categories: - Television broadcast stations. - PEG (Public Access, Educational Access, Government Access) channels. - Non-broadcast channels.

In any discussion of a-la-carte, the programmers hold the winning hand:

- Broadcast station licensees have a legal right to force retailers to carry their signals on the basic tier.

- Broadcast licensees have federally-mandated geographic markets ("Designated Market Area" or DMA). In any other industry, this arrangement would be called a "geographic monopoly." In the upside-down world of television broadcasting, it's called "consumer protection."

- CATV franchising authorities have a legal right to force retailers to carry PEG channels on the basic tier.

- Any programmer that owns non-broadcast programming *and* a broadcast station licensee has a legal right to force retailers to carry the non-broadcast programming on the basic tier as a condition for granting retransmission consent for the broadcast signal.

As I've noted before in this space, if Verizon or any other retailer wants to offer programming a-la-carte, it has to start by getting Congress to repeal the grotesquely misnamed "Cable Television Consumer Protection and Competition Act of 1992" and companion legislation governing satellite retailers.

All that said, I have some doubt that a-la-carte would actually lower retail prices anyway. My narrative about that is at:

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Neal McLain

Reply to
Neal McLain
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[I reordered his comments somewhat]

Note that these mechanisms are mutually exclusive: a broadcaster can elect retrans consent *or* must-carry but not both. There are also limits to how much channel capacity can be tied up with mandatory-carriage channels, but there are likely few cable systems left that qualify for anything other than the highest tier.

I'm not sure what you're on about here. DMA is Nielsen's invention and trademark, not the government's -- the FCC merely adopted it as a frame of reference for presumptively determining the boundaries of a market for CATV and SHVIA purposes. (Ownership limits in Arbitron-rated radio markets use a similar mechanism.) The only monopoly a television licensee has comes from its contracts with program providers (networks and syndicators) -- and those program proviers have a legal monopoly granted to them by their contracts with the copyright owners of those works. (There is less competition in broadcast television than there used to be, thanks to the partial repeal of the duopoly rule for large markets, and the "failing station" waiver that allows television duopolies in small markets. However, this is more than balanced out by the large number of additional non-broadcast options.)

It is true, and maybe this is your point, that when CATV operators offer two stations that carry the same programming, they are generally required to substitute the programming from whichever station is considered "local" to their market, if that station requests it.

I strongly suspect that many consumers would be happy to pay only a token amount less in the knowledge that they are "not paying for" those channels that they have no interest in (whether it's EWTN or LOGO).

-GAWollman

Reply to
Garrett Wollman

This is probably a diversion.

I've been using a box called Roku

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which allows me to take video programs over the Internet.

Aside from Fox News, there isn't anything on cable which I particularly care to watch.

But the Roku box gives me plenty that I enjoy. Though I haven't counted them, they claim over seven hundred channels. And it is a one time fee versus monthly payments.

Many of the services are free. Some (like Netflix) you pay a small monthly fee (not to Roku).

But as I get unlimited Internet from Roku for a mere eight dollars per month, it is a lot cheaper than paying for a lot of cable channels I never use.

In fact, I decided that what I was paying the cable companies [just so I could watch Fox News] wasn't cost efficient. And I could listen to them on my XM radio. So I called our cable company and asked them what the difference in my bill would be if I returned the cable box and kept only the high speed Internet.

They freaked when I asked them that. They gave me a special two year deal that saves me forty dollars per month for the first year and twenty a month for the second year so I would not cancel the cable portion of my service. I can cancel at any time with what I consider to be a reasonable fee for early cancellation. And as I am in the process of purchasing a new home, I can take the deal with me when I move.

Another solution by the free market.

Fred

Reply to
Fred Atkinson

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