© National Journal Group Inc.
Thursday, Dec. 15, 2005

Speaking at a recent forum on indecency, Federal Communications Commission Chairman Kevin Martin told members of Congress and the entertainment industry that parents need more and better tools to help them navigate the waters of cable and satellite programming. Without endorsing a particular solution, Martin offered several suggestions, including family-friendly channel bundles and so-called a la carte pricing, a model that would allow customers to cherry pick those channels they want.

	“We're not allowing parents and families to make decisions about what is allowed into their home.” — Dan Isett

The a la carte system has been endorsed by many family and morality groups, who view it as a method that could potentially address programming questions aside from the indecency debate. The cable industry has been opposed to pick-and-choose mandates, saying they threaten the existence of niche channels, and allegedly violate providers' First Amendment rights.

In a recent interview with NationalJournal.com's Shawn Chen, Dan Isett, the director of corporate and government affairs for the Parents Television Council, elaborates on the a la carte system and why his group believes a market-based solution may benefit both sides of the debate. Edited excerpts follow. For previous Insider Interviews, click here.

Isett: You'd really have to ask them what they'd look like. [National Cable & Telecommunications Association President] Kyle McSlarrow was very careful to say that they didn't know what it was going to look like. They didn't know what channels would be included or not included... that each cable company would be wrestling with issues about their distribution. In addition, they wouldn't be rolling this out for another several months. So the bottom line is that they don't even know what it'd look like.

Our contention however, is that while this is a good step, it doesn't address the fundamental problem, which is that we're not allowing parents and families to make decisions about what is allowed into their home. And equally important, they don't get to make any decisions about what they subsidize with their cable payment.

Q: You said this was the first step. What about previous anti-indecency efforts, such as the V-Chip?

Isett: We've heard from these guys about nine years now about TV ratings and the V-Chip, and how this was supposed to be a solution to all their problems. And now here they are back again proposing what they call a family-friendly model.

They don't have any credibility when these things are concerned. They're willing to do anything but let consumers make up their own minds about what they want to take.

Q: Could you explain the a la carte system that your group and others are pushing for?

Isett: Right now, consumers are forced not only to take the channels they want to receive when they get a cable package, but also must subscribe to a number of channels that they won't necessarily watch, and often times find offensive.

We advocate a consumer-choice model, where consumers could take a certain number of channels and pay whatever rate is commensurate with that.

Q: I know that the industry, in the past, has argued that a la carte would increase costs for specialized stations such as C-SPAN, and threaten some minority stations and educational programming. Is this a real possibility? What is your group's answer to this?

Isett: I don't think so. One of the things that came out a couple of weeks ago, and Chairman Martin's statement at the indecency forum held by the Senate Commerce Committee, was that the FCC was revisiting its previous report on the economic viability of an a la carte system. It can be safely assumed by what he said that they're going to arrive at a much different conclusion from a previous report. He termed the methodology used to arrive at the previous conclusion as flawed. So we anticipate having a much better report out of the FCC.

As for the other arguments, the industry has this problem. Out of one side of their mouth, they talk about what value they bring, and how important and valuable the content is on any number of stations. And then turn around and say that if consumers had the choice to pick and choose which channels they want, they might go out of business. I'm not sure if both of those things can be true.

There was a lot of rhetoric about the free market at the announcement. Well, they are for the free market as long as it doesn't apply to them. What we're talking about here is a market-based solution that lets people choose what channels they want, and conversely, not choose channels they don't want.

Q: What about the First Amendment argument the industry raises? They say an a la carte mandate would intrude on cable operators' editorial discretion and protected speech.

Isett: Of all the many arguments they make, to me, that is the one that makes the least amount of sense. Since when is giving people an option in what they take a violation of the First Amendment? This isn't unnecessary intrusion, if anything, it's an upholding of the First Amendment. That's what the First Amendment is all about.

Q: You're pushing for a la carte, but are you also searching for a legislative solution to indecency, such as extending the FCC's broadcast rules to cover cable?

Isett: We think the best solution, the market-based solution, is to let customers make up their own minds about what channels they take.

The unfortunate reality now is that all of these channels are grouped together. Carriage of one is dependent on carriage of all the rest, and those owned by whatever media company you're talking about. So there's no option given.

Q: So you're taking a business approach to the issue?

Isett: As backgrounder, I think there's some misnomer about what is in fact business-friendly here.

We think this model would be good for businesses. Cable advertising now is sold on a personal-subscriber basis. In general terms, it's not sold based on Nielsen ratings. So if you trotted down to your local cable office and said, "Hey, I want to buy X number of spots." They would assemble a package for you and say, "Well we can get CPM for this price on 47 different networks," under the theory that people will see your ad as they're changing channels.

I have to believe that it's more valuable to a business to specifically target the demographics in each one of these channels. And then people will have made an affirmative choice to take a channel, and you have to believe that is more valuable for a business.

[ Insider Interview Archives ]

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