Small cable operators ask FCC to limit ‘bundling’

A group representing 1,100 smaller cable companies said Walt Disney Co., Viacom Inc. and other network owners force them to buy unwanted channels, and asked the U.S. Federal Communications Commission to step in.
The American Cable Association made its remarks in a filing to the agency, which requested comments by Jan. 4 on the practice of bundling, or requiring more program purchases when cable operators buy the most-popular channels. Disney, in a separate filing, said the market is fair and FCC action isn’t needed.
The cable operators’ group gives FCC Chairman Kevin Martin support for plans to widen industry regulation. He has been a critic of cable price increases, saying the average cost of an expanded basic subscription rose 93 percent from 1995 to 2005.
“Content and cost are forced onto the lowest level,” where all customers pay, Matthew Polka, president of the Pittsburgh-based trade cable group, said in an interview earlier this month.
Thirteen of the biggest channels – such as Disney’s ESPN and Disney Channel and Viacom’s MTV – are “bundled” with obligations to carry at least 60 other channels, the trade group said in a filing. It said programmers also demand placement on specific programming tiers, or channel groups.
Polka said programmers should be forbidden to demand placement on particular tiers, or to demand prohibitive prices if associated channels aren’t carried.
Disney told the FCC it has no authority to regulate bundling. “Packaged offerings are in the public interest,” the company said in its filing. Benefits include “reduced transaction costs for buyers and sellers, reduced marketing and advertising costs and more diverse programming.”
The National Cable & Telecommunications Association, which represents large cable operators and more than 200 cable programmers, this month told the FCC that regulation isn’t necessary because the marketplace is competitive, with virtually all customers having a choice of three pay-TV providers.
Still, Martin has led the agency to impose growth limits on cable companies. Fellow commissioners in November forced him to withdraw a plan for wide regulation of the cable industry.
After receiving comments, the FCC typically takes several months or longer to rule on issues. It is under no deadline to act. The agency had no comment on the filings, said spokeswoman Mary Diamond. •