Feeling deja vu? Good for you.
About a year ago, a column appeared in this space (penned by yours Fooly) titled "FCC: Friend to Cable Companies." Back then, I chastised Federal Communications Commission Chairman Michael Powell (yes, son of that other famous Powell) for recommending that Congress refrain from forcing cable television providers to price their channels "a la carte."
In so doing, Chairman Powell sided with the nation's cable monopolists and their argument that consumers benefit from being forced to buy "bundles" of cable service. That it's cheaper for you to subscribe to 100 channels and watch just 17 of them than to pay separately for the 17 channels you do watch. That in fact, in order to save any money off of a bundled service, consumers would have to cut back to watching just eight television channels.
Balderdash, said I. And guess what -- today, the FCC chairman agrees with me.
Not Powell, mind you. He's exited stage left, replaced by family values advocate and new FCC Chairman Kevin Martin. On Tuesday, Martin went on the record in favor of a la carte pricing, taking a tack that even industry-friendly administration officials will feel hard-pressed to ignore: We need to protect the children. Specifically, we shouldn't be forcing parents to purchase programming packages that bundle Cartoon Network with Cinemax, Noggin with Playboy (although I've yet to encounter a package that presents parents with such a starkly contrasted pairing).
As spurious as the new pro-a la carte argument appears to this Fool, it's no more so than the transparently disingenuous arguments fielded by the cable monopolists. Take your pick of Comcast
A clue to the industry's real motives may lie in its latest threat, rumbling that any move to force a la carte pricing "might violate free speech rights." Translation: "Just try it. See how long it takes us to sue."
Well, speaking of grounds for a lawsuit, the industry might want to consider this one. One man's bundling of channels to keep prices affordable just might be another judge's "tying" of one service to the purchase of another. There's a little thing called the Sherman Antitrust Act that's made that practice illegal for well over 100 years. Now seems like just the time to dust the act off and give it another read through.
Read more about America's regulatory wonderland in:
- VoIP Users Not in Good Time
- Surf and Talk at 35,000 Feet
- Senate's Cellular Stand
- No, Seriously: Do Not Call!
Time Warner is a Motley Fool Stock Advisor recommendation.
Fool contributor Rich Smith owns no shares of any of the companies mentioned in this article.