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Viacom: Study Advises Against a la Carte

Viacom Inc. announced the results of a new study that challenges the recent findings by the Federal Communications Commission on offering cable networks a la carte.

The study was conducted by Dr. Bruce Owen of Stanford University, a consultant to economic-consulting firm Economists Inc. and former chief economist of the Antitrust Division of the Department of Justice and the White House Office of Telecommunications Policy.

Speaking about the FCC’s “Further Report” -- which found that the average household would pay 14%-30% more to receive the same channels under an a la carte system -- Owen said, “It would be a mistake for regulators to use that document to guide policy.”

He continued, “Bundling of goods or services is a universal marketing practice. Nothing that the FCC has presented in the report leads me to believe that their initial 2004 recommendation against a la carte should be reversed.”

Owen added, “In fact, the report does not even consider the impact of a la carte on the diversity of programming and viewpoints available to consumers. Mandatory unbundling of video services will reduce the diversity of programming available to viewers, undermining a policy goal that has been critical to the FCC and Congress for the past half-century.”