March 10, 2004

VARIOUS PEOPLE seem to be portraying controls on broadcast indecency as some sort of Republican plot. This story would seem to offer a corrective:

Senate Panel Votes to Raise Indecency Fine, Put Limits on Violence: The Senate Commerce Committee voted 23-0 today to approve legislation that would raise fines for indecent broadcasts to as much as $500,000 and for the first time in history could subject violent TV programming whether originating on broadcast, basic cable or satellite TV channels to the same punishment.

Sounds pretty bipartisan to me — unanimous. (Then, of course, there’s Kerry’s support for the dropping of Howard Stern’s show.) But here’s the really interesting bit:

At today’s vote, Sen. Hollings also introduced an amendment that would have required cable operators to offer their programming a la carte, allowing consumers to buy and pay for only the programming they want. But he withdrew the measure after it became clear that he didn’t have the votes to support it.

It seems to me that this proposal would answer any complaints (except with regard to labelling, I guess) that any parent could have about indecent programming on cable — you don’t want the channel, don’t buy it. The cable industry naturally opposes this — bundling the Celebrity Underwater Kite-Flying Channel with HBO is how they fleece consumers make a lot of their money — but I hope that it’s an idea that will come back. (And I can only attribute Hollings’ failure to get enough votes to undue influence on the part of the cable industry, as I can’t imagine any Senator’s constituents opposing this idea.)

Yes, it’s rare for me to praise Fritz, but this looks like a good idea to me. On the indecency ban, well, I think that the unanimous passage indicates that there are a lot of people out there who want this. You may think that’s a bad idea (in fact, I do) but it’s not a sinister plot by a theocratic Republican minority. And, in fact, I think that opponents of the indecency ban have hurt their cause by engaging in Bush-bashing instead of addressing genuine popular sentiment head-on.

UPDATE: Reader Frank Vance emails:

I have been advocating forced unbundling of the channels on cable and satellite for several years, ever since I took a serious look at my 100 channel (now 120 channel!) package and determined I have only watched maybe 20 of these channels in all the time I have had the service. And maybe 10 of the remainder I have actually locked to prevent my children or their friends from viewing.

Of course, if I downgraded service to the 50/60 channel level, I lose maybe half of the channels I actually watch.

Senator Hollings is correct, this would fix the problem. We need to make this a meme based on “Consumer Choice”, and get it in front of the FCC, the House, and the Senate.

(Keep in mind a big part of the problem is that much of the bundling is forced upon the cable/satellite services by the media giants [Viacom, ABC/Disney, et al.] who use their control of local affiliates to dictate the package placement of their “cable” channels. Dish Network [Echostar] and Viacom are currently involved in a dispute over the pricing of the Viacom channel “bundles”.)

Back in the days when ‘dishes’ were large (C band), most of the pricing was a la carte. Of course, you could get bundles for related channels from the same vendor (like all the HBO channels from Time Warner) if you were so inclined. In fact, this is the European (but not British) satellite model. SES Astra (and one or two competitors) provides the satellite, but customers subscribe to the programming (or bundled services) they want directly. The programming providers then pay the satellite company for transponder space on the satellites.

I think part of MTV’s problem is they look at number of “subscribers”, believe that reflects the number of “viewers”, and think they are driving mainstream thought. That’s why the backlash over the SuperBowl halftime show surprised them so. They honestly believe people actually watch their channels….

Kind of like op-ed columnists who believe that their readership matches the newspaper’s circulation numbers, I guess. . . .

I don’t know a lot about cable TV regulation, but I can’t imagine a legitimate objection to unbundling here. Why should people be forced to buy things they don’t want?

Meanwhile, Ed Cone notes that FCC Commissioner Michael Copps (a Democrat appointed by Bush — can’t get more bipartisan than that!) suggested in an interview in 2002 that the FCC was looking for an egregious case that it could use to reestablish decency regulation. MTV, and Stern, gave it to them.

UPDATE: Steve Postrel emails to defend cable-bundling:

Some of the econo-bloggers may get to this, but there is nothing particularly nefarious about bundling–it’s an alternative to other forms of price discrimination. The idea is that if customers’ willingness to pay for different products isn’t positively correlated (i.e. people who like the Fishing Channel are no more likely to also like the Crocheting Channel) then charging an average price for the bundle means that the firm doesn’t have to figure out which buyers love fishing and which love crocheting. Instead of charging high Fishing prices and low Crocheting to one group and low Fishing and high Crocheting to another group, you charge the same bundled price to everybody. Like price discrimination, in many circumstances this practice improves economic welfare (i.e. more mutually beneficial transactions are possible compared to a world where bundling is illegal).

Moreover, with information goods, where the incremental cost of serving another customer is near zero and where the population’s tastes are very diverse, it makes extra sense to bundle. Yannis Bakos and Eric Brynojolfsson have a Management Science article in Dec. 1999 that makes this point very convincingly and even shows why you’d expect to end up with various alternative bundles being offered, as in cable TV with its various tiers and packages.

Hmm. Well, if you put the indecency bit aside this may make sense — but when people have channels whose content they object to bundled with channels they want, it seems to me that unbundling is better than government regulation. And I’d rather choose a la carte anyway — as, I suspect, would most cable customers.

MORE: Barbara Skolaut would! She emails:

I’d get behind cable un-bundling in a heartbeat! I have no interest in most of my cable channels, but have to take them to get the ones I want (HGTV, Food Network, Discovery, etc.).

My cable company (Comcast) used to call me periodically trying to get me to “upgrade” (pay them more money) to HBO, etc. I alway refused. One day I got irked and told them I was never taking any of the “premium” channels and I wished they’d quit calling me unless they could offer me something I really wanted – such as NO sports channels and a lower monthly cost. Haven’t heard from them since (nor do I expect to).

Don’t hold your breath.

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