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PTC: A La Carte Is Path to AT&T-TW Approval

The Parents Television Council has some advice for AT&T in its effort to buy Time Warner: Offer its programming a la carte.

PTC has long argued (immediately remedy the anti-consumer sentiment the cable industry is so frequently accused of) that programmers should give viewers more choice over channels to weed out what it sees as family-unfriendly fare by offering channels a la carte.

Traditionally, distributors have argued that a la carte would lead to more expensive programming and that bundles allowed for anchor channels to support ones with lesser viewership that might not otherwise get such a large potential audience, akin to anchor stores--Bloomingdales, Macys--in malls with stores that only sell refrigerator magnets. But that model is clearly changing with the advent of over-the-top options for viewer choice and control.

PTC referred to a new streaming service from ESPN (the direct-to-consumer ESPN+), saying that demonstrated that programmers plans to embrace a world without traditional cable or satellite distribution. PTC said AT&T-owned DirecTV should get ahead of that by giving viewers choice over their programming, which PTC argued would "surely secure swift approval" of the deal by "immediately remedy the anti-consumer sentiment the cable industry is so frequently accused of," said PTC President Tim Winter.

AT&T and the Justice Department are currently battling in court after DOJ sued to block the deal, arguing the combined company would have the incentive and opportunity to disadvantage its competitors and raise prices to consumers.

PTC suggested a la carte as a behavioral condition on an approved deal, though Justice wants Turner programming assets--HBO, CNN--spun off instead.

DOJ antitrust Makan Delrahim has signaled that behavioral conditions on an otherwise anticompetitive deal are simply trying to fix an illegal deal, fixes that are hard to monitor and generally better achieved through structural conditions like spin-offs.

The idea is to wind up with a company that is not anticompetitive, then let it compete, rather than put conditions on it that have to be constantly monitored by the government, Delrahim has suggested.