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Seattle: Surveys Support a la Carte Mandates

7/12/2004 5:50 AM Eastern

The results of city-sponsored surveys in Seattle demonstrate the need for federal regulations that would require cable companies to break up large programming packages and offer channels individually, the city claimed in comments filed with the Federal Communications Commission last week.

Seattle cable regulators sponsored a pair of surveys that produced results showing that 46% said they would pay “a little extra” for more a la carte options. A second, less-scientific survey showed that 66% said they would opt for a la carte if given the chance by the cable company.

“Because cable operators have not been responsive to the demand for customized programming, the FCC should establish regulations that facilitate consumers’ choice, whether this is accomplished by requiring cable companies to offer a la carte programs, theme-tiered programs, or some other options,” said Tony Perez , who signed the FCC comments filed by Seattle’s Office of Cable Communications.

Seattle’s cable market is dominated by Comcast Corp., which, along with most cable operators and programmers, is strongly opposed to mandated a la carte. Cable’s largest players argued that forced a la carte would lead to higher bills for fewer channels and would drive niche networks from the market.

Comcast has about 117,000 Seattle-area subscribers, and Millennium Digital Media is the area’s second MSO, serving about 17,000 subscribers, the OCC said in its July 6 FCC comments.

The FCC is conducting an a la carte study due at the House Energy and Commerce Committee by Nov. 18. The commission asked for initial comments by July 15.

Other comments that have reached the FCC so far have emphasized that large programming tiers provide consumers the best value and offer new programmers -- especially services aimed at minorities -- a test bed to find an audience and build a dual revenue stream of license fees and advertising.

“The business model of smaller ethnically or culturally targeted networks, like that of most networks, requires that their service be available in the largest possible number of television homes,” said Karen K. Narasaki, president of the National Asian Pacific American Legal Consortium, in a July 9 FCC filing.

Seattle said it engaged Pacific Market Research to conduct “a statistically valid telephone survey” of 1,000 randomly selected “Seattle citizens.” Those polled were asked how likely they would be to pay a little extra to create their own packages, and a large minority -- 46% -- said they would be “very likely or somewhat likely” to do so.

The second survey -- posted on the OCC’s web page (www.cityofseattle.net/cable) -- found that 66% would be “likely or very likely” to elect a la carte if made available.

Both surveys were conducted in 2004, the OCC said.

The OCC concluded that because a minority in the scientific sample and a large majority in the unscientific one voiced support for a la carte, the FCC should move forward with a la carte rules. It did not address the extent to which the FCC has legal authority to impose a la carte.

“The OCC believes the survey results in Seattle -- which clearly indicate that a high percentage of the population wants choice and would be willing to pay for the ability to customize their channel selection -- echo the voice of consumers nationwide,” the OCC told the FCC.

The OCC said the surveys were conducted in connection with Comcast’s franchise renewal, adding that the results should not be interpreted to mean that cable subscribers are willing to pay “a higher total-package cost” for their cable service.

“The OCC believes that giving subscribers the opportunity to customize their own packages would actually lower the overall cost of their cable service,” it said.

 

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