DTV Primer

Chris Llana, Editor



A la Carte Channel Pricing & McCain

March 8, 2006

In the wake of the FCC's revised report on a la carte channel pricing (see my 2/11/06 story), Senator John McCain has thrown down the gauntlet. Or perhaps I should say he has thrown it at the cable TV industry.

He has not provided details except to say that he will introduce legislation "soon" in exchange for regulatory relief (?).

This is what his press release says:


For Immediate Release
Thursday, Feb 09, 2006

Washington D.C. -- Senator McCain (R-AZ) issued the following statement about today's Federal Communications Commission report on the price effects of "a la carte" cable channel offerings:

"I am pleased that the Commission has concluded that 'a la carte' offering could reduce consumers' cable bills by as much as 13 percent. The report confirms what I have believed for years if consumers are allowed to choose the channels their families view then their monthly cable bill will be less. Choice is far preferable to being forced to buy a host of channels they don't even watch."

"It is regrettable that the cable companies continue to balk at offering channels on an 'a la carte' basis and instead continue to raise the price of their bundled offering. The Wall Street Journal recently reported that consumers can expect to rate increases of as much as six percent during 2006. Therefore, I will soon be introducing legislation that would entice all providers of television services to offer an 'a la carte' option in addition to a package of channels in return for regulatory relief. I hope that the cable industry will appreciate the ability to choose despite their failure to provide meaningful choices to their customers."

The FCC's report is a re-evaluation of the "a la carte" issue that the Commission first explored at the request of Senator McCain in 2004. In November of that year, the Commission issued a report that found the average consumer who purchased channels under an "a la carte" regime would face a monthly rate increase of between 14 percent and 30 percent. Today the Commission concluded that the data of the original report was misinterpreted and that consumers would see cost savings of as much as 13 percent from "a la carte" channel offering.