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Martin Touts Cable A La Carte, Regulation

A Senate hearing on television indecency with 23 witnesses turned into a face-off between FCC Chairman Kevin Martin and NCTA chief Kyle McSlarrow, with Martin calling for one of the industry’s most feared mandates, that cable programming be sold on an a la carte basis.

At the Senate Commerce Committee’s “Open Forum on Decency” on Tuesday, Martin said that he had the FCC’s chief economist, Leslie Marx, draft an analysis that counters the commission’s previous stance that forcing cable systems to sell all programming a la carte the way—they sell pay movie networks like HBO and Showtime—would substantially increase consumers' costs because operators and networks would have to raise prices.

Martin said that the old report prepared by the FCC Media Bureau “makes mistakes in its basic calculations” and is based on “incorrect and biased analysis.” A new report to be issued by commission staff soon shows that a la carte “could be economically feasible and in consumers’ best interest.”

In fact, Martin said, applying a la carte to the digital tier would actually lower cable and satellite bills by 2% — a finding he said was omitted from the original staff report

Martin outlined other options to regulate content, including extending broadcast indecency rules to include cable and satellite services, and mandating  family friendly tiers.

“We used to receive indecency complaints by the hundreds and now they come in by the hundreds of thousands,” he said. “The industry needs to do more to address parents’ legitimate concerns.”

McSlarrow, president of the National Cable & Telecommunications Association, came out Tuesday morning clearly against a la carte, tiering or indecency regulations for cable. McSlarrow said the Supreme Court has “very clearly” ruled in the past that any restrictions of that sort would be a violation of the First Amendment.

McSlarrow seemed to take dead aim at a la carte, comparing the idea of letting consumers pick and choose their cable channels to allowing newspaper readers to subscribe only to the sports section. McSlarrow said the multitude of channels helps provide the economic base for cable to carry several children’s channels. “The cable industry invented diversity of programming,” McSlarrow said.

McSlarrow said the technology already allows subscribers to block channels they find objectionable, and that it’s easy to do. “It’s four clicks and a scroll on the remote,” he said. “It’s not a heavy lift.”

Mandating a la carte, he argued, would “end up hurting the very customers we’re trying to help.” He ended his short presentation by urging legislators “to take government mandates off the table.”

Another witness, Preston Padden, executive VP of The Walt Disney Co., however, argued that “there is no longer, in our view, a constitutionally sustainable basis to distinguish between broadcast and expanded basic cable and satellite [programming] with regard to decency.”

Yet Padden also argued against a la carte, claiming it would cost cable operators billions of dollars just to provide the proper set-top boxes that would enable a pick-and-choose method of cable viewing. Disney’s gambit, it appeared, was a way for Disney to come out in favor of expanding indecency regulations to cable while defending the current cable delivery system.

Disney-owned ESPN is one of cable’s most expensive channels with the cost paid for by operators; if consumers had to pay for it, the reasoning goes, not enough fans would pay for Disney to continue to pay to show major league sports. 

The forum ended with lawmakers stressing that they’re serious about passing new legislation to crack down on indecent programming—whether it’s on cable, satellite or broadcast outlets.

“As we approach 2006, we ought to look at getting a bill that will deal with this subject,” said Co-Chairman Ted Stevens (R-Alaska). Congress is actually considering four bills that would toughen rules against the transmission of indecent content. “This is just a statement of fact,” said Co-Chairman Daniel Inouye (D-Hawaii). “We’re going to do something this time.”

Some argued that the rating systems and v-chips don’t address the main issue of the content itself. “No one’s addressing the pothole,” said Brent Bozell, president of the Parents Television Council.

Passing laws limiting speech is tough, many noted. Stevens, acknowledging that, said  if courts overturned new indecency legislation, it “would be a great disappointment to the American family.”