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Bringing real choice to U.S. cable customers
Special to The Times
Consumers today have too few choices when it comes to cable television.
In the U.S., if you want ESPN, you must pay for 60-plus channels that you may never watch. If your child loves Nickelodeon, your family must pay for the same 60-plus channels, some of which may not be suitable for young children.
Now, imagine deciding for yourself which TV channels you want to purchase. You could select the channels you want to pay for, or perhaps the ones you no longer want to buy. Right now, TV viewers around the world have these choices. They buy their television channels individually or in smaller bundles — and get better deals as a result.
Today in our land of opportunity, freedom and choice, there is too little competition, too much regulation and not enough real choice in the cable business. In just the past two years alone, cable prices have increased at twice the rate of inflation. According to the cable companies, it is because they are giving you more and more channels. At no time, however, have the cable companies actually asked if you want those additional channels. They just require you to pay for them.
The solution to high cable bills isn't price controls or additional government regulation. It is more competition in the video marketplace and more consumer choice. For that reason, we encourage Congress to pass the Consumers Having Options in Cable Entertainment Act — the CHOICE Act — which would help accelerate the penetration of new cable-service providers in our communities and would encourage the cable industry to offer channels individually or in smaller bundles, what is often called "a la carte." The Government Accountability Office has found that cable rates are 15-percent lower when a community has at least two cable companies competing for consumers.
Additionally, the Federal Communications Commission recently found that consumers could lower their monthly cable bill by as much as 13 percent if they had a la carte programming options. For example, Spanish-speaking homes would never be forced to purchase all the English-language channels before being able to buy the Spanish-language cable channels they actually want. And parents would never be forced to purchase a slew of channels, some not suitable for young children, simply to receive those channels their family enjoys watching together.
Real-world examples illustrate the benefits of greater choice and more competition coming through our TV sets. In Hong Kong, viewers can select and pay for only the channels they want. A family that wants to watch sports, movies, news and children's programming can receive 15 free channels plus a selection of 11 additional digital channels including ESPN, HBO, CNN, Headline News, National Geographic, Animal Planet, and Discovery for only $27.50 per month. To get the same channels in Washington, D.C., it would cost $82 per month. That's quite a difference.
Similarly, in Canada, after buying basic, digital subscribers can buy channels individually or enjoy significant savings on a "5 pack," a "10 pack" or a "15 pack" of their own choosing.
As a result of competition and choice, consumers in Hong Kong are paying less on their cable bills. From 1995 to 2002, Hong Kong's cable bills increased 13 percent. That year, a new video competitor came on the scene with an a la carte option it called "true consumer choice." Since then, the monthly bills for Hong Kong cable customers have fallen by 9 percent. In the U.S., by contrast, cable prices have increased almost 20 percent since 2002 and more than 90 percent since 1995.
The same programmers who oppose selling channels individually or in smaller packages in the U.S. offer their programming a la carte in other countries. Their threats of financial ruin and a loss of diverse programming have proven hollow. The number of viewers in places where consumers have more choice over the channels they buy is booming, and a rich variety of programming remains.
In fact, companies like AT&T, Echostar and Charter want to provide consumers more control over TV programming and enable them to lower their bills, but many programmers will not allow them to do so. And American consumers want these companies to offer such choices. According to a recent AP-Ipsos poll, 78 percent of respondents said they would prefer to choose and pay for their own tailored selection of channels.
Today, cable choice and competition success stories are being written in countries all around the world. Consumers in Hong Kong, the United Kingdom, India and Canada are reaping the rewards of greater choice from channels being offered on an a la carte basis.
So why should cable companies and programmers determine what Americans watch and pay for? We see no reason why the U.S. should be behind so many other countries in giving its people true choice in cable programming.
Republican John McCain is the senior U.S. senator from the state of Arizona. Kevin Martin is the chairman of the Federal Communications Commission.
Copyright © 2006 The Seattle Times Company