ESPN A La Carte? FCC Chair Martin Proposes New Cable Tier
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Martin Proposes Offering
Cable Nets A La Carte |
FCC Chair Kevin Martin this month has "floated a new idea ... [to] allow cable operators to eject from expanded basic service -- the most widely purchased cable programming tier -- any channel that charges wholesale license-fee rates of [$0.75] or more per subscriber, per month," according to Ted Hearn of MULTICHANNEL NEWS. In theory, this could mean consumers for the first time "could buy some of the most expensive cable channels ... on an a la carte basis," including ESPN, FSN, TNT and Disney Channel. Martin on April 9 proposed that any cable network that demanded at least $0.75 monthly per sub "could legally forfeit its place on expanded basic" cable. SNL Kagan research shows that the $0.75 rule would "capture the elite members of the cable-programming community" including ESPN, which currently charges $3.65 per month per sub. Hearn reports the details of any FCC wholesale a la carte regime "would be critical." Although the goal would be to "lower the price of expanded basic, a voluntary plan could fall short of that goal." For example, an MSO could "remove ESPN and replace it with far less expensive programming while leaving the price of the tier unchanged." An ESPN fan who "sought to maintain the same level of service would end up paying the same amount for expanded basic without ESPN while paying a new fee, amount unknown, to access ESPN" a la carte. ESPN Exec VP/Administration Ed Durso: "I think there would be an uproar. I don't think any consumer would think that would be a good thing." Hearn writes, "Suppose ESPN were sold a la carte, priced anywhere between $10 and $20 a month. What would cable operators do if a large percentage of customers fled expanded basic, limiting their purchase to just local TV signals and ESPN?" Kansas-based cable operator Sunflower Broadband CEO Patrick Knorr: "Packaging (ESPN) that way would not be a business decision I would make" (MULTICHANNEL NEWS, 4/28 issue).
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