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InsiderOnline Blog: July 2004

Cato: "A La Carte" Cable in Bad Taste

Adam Thierer of Cato told the Federal Communications Commission what was what Monday at a hearing on "a la carte" cable pricing. His assessment? Unappetizing. The idea being floated is that the federal government should mandate that cable companies allow each consumer to pick exactly which channels he wants to pay for. Animal rights activists could eliminate TNN's bass anglers, college guys could wipe Lifetime out of their lives forever.

Sounds nice until you start to wonder whether a sweeping new federal regulation is needed to personalize your channel-surfing. Thierer says no. He says cable companies got where they are today by bundling channels. It's a successful, market-tested strategy that shouldn't be wiped out because a few people don't like it. He also says "a la carte" would be a major logistical hassle, offer fewer choices at higher prices, and raise ad rates.

But most importantly, Thierer asks the question most of the federal government is incapable of asking: "By what right?"

If enough citizens complained about the bundled laces in shoes or bundled tires on cars or the sports sections bundled in their local newspapers, would that be enough to justify government action to remedy such a non-crisis? The same principle holds for the case of MVPDs and video programming services. Just because a certain number of consumers don’t like a particular business model does not give the government license to upend an industry’s private business arrangements and substitute a grand industrial policy scheme in the name of "consumer choice."

Posted on 07/16/04 02:12 PM by Mary Katherine Ham

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