Wednesday, February 8, 2006

FCC Backs A-la-Carte Video Programming Model

The FCC issued a new report that concludes consumers could be better off if the industry adopted an "a la carte" model for delivery of video services instead of the current system of packaged content and service tiers. The new report reaches different conclusion from the Commission's 2004 research, which the FCC now says relied upon unrealistic assumptions and presented biased analysis.

The first report predicted that if a-la-carte were implemented the average consumer would face a bill increase of ranging from 14% to 30%. The new study finds that a shift to a-la-carte would decrease the average consumer bill by as much as 13%.

The new report also finds that a-la-carte could make it easier for new networks to enter the market and that advertisers would find it easier to judge the value of programming.

  • In 2004, the FCC issued a report concluding that a la carte and tiered models (such as family tiers) were not economically feasible and were not in consumers' interests.

  • In November 2005, FCC Chairman Kevin Martin called upon the cable industry and direct satellite broadcasters to offer better tools and packages to filter between adult-oriented content and family-friendly programming or face new rules. Specifically, he called upon these providers to offer a-la-carte programming so that viewers do not have to purchase objectionable content.

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