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FCC Opens a la Carte Inquiry Sought by House

5/25/2004 9:30 AM Eastern

Under orders from key House members, the Federal Communications Commission Tuesday launched an inquiry into the plausibility of cable and satellite companies offering channels on an a la carte basis.

The FCC acted one week after receiving a bipartisan letter from leaders of the House Energy and Commerce Committee, who punted a la carte issues to the agency partly to assuage the concerns of a la carte proponent Rep. Nathan Deal (R-Ga.).

The House letter gave the FCC until Nov. 18 to respond with a detailed report answering nearly three-dozen questions about the offering of cable networks a la carte under various legal, technical and practical scenarios.

The report will serve as the FCC’s most detailed look at a la carte in more than one decade.

Last fall, the General Accounting Office concluded in a study for Sen. John McCain (R-Ariz.) that a la carte might expand consumer choice and lower rates for some customers, but other customers would have to pay higher programming and set-top-box fees.

The report also noted that a la carte would cause cable networks to lose advertising revenue and would impose other operating costs on cable operators.

In contrast, Deal argued that a la carte would actually help consumers to keep a lid on rising cable rates and allow them to pay for only those channels they actually view.

September