One of the reasons satellite TV services have been able to compete with cable operators is that Congress required cable companies in 1992 to make the programming they owned available to other service providers without discrimination. As a result, cable monopolies couldn't cripple the fledgling satellite services by cutting off access to such must-have channels as HBO, CNN and regional sports networks. The Federal Communications Commission recently extended that requirement for five more years, a move that will help a new breed of cable competitor: TV delivered by phone companies through high-speed data lines.
The commission didn't stop there, however. It also launched an inquiry this week into whether companies that own multiple networks should be barred from selling them only as package deals. This practice has helped companies such as Time Warner, Viacom, NBC/Universal, Disney and News Corp. saturate the program grid with seemingly endless versions of HBO, MTV, ESPN and the like. FCC Chairman Kevin Martin accused broadcasters and cable programmers of routinely "tying" their best offerings to lower-rated channels, driving up the price of cable and satellite TV subscriptions. "I believe that if a cable operator only wants one channel, it should not have to take 10 or 20 channels in order to get that one," Martin said.
The investigation is welcome. Rural telephone and small cable companies say they want to offer competing TV services, but they're impeded by take-it-or-leave-it deals that force them to carry unwanted networks or place less-desirable channels in their basic tiers. Not only does this hurt competition in multichannel services, it also deters investment in the upgraded networks necessary to deliver high-speed Internet access.
Some larger phone and cable companies have also complained that the networks' bundles prevent them from offering channels on an a la carte basis -- a consumer-friendly option that has been one of Martin's pet causes. Some programmers have countered, not persuasively, that a la carte sales would hurt new and niche networks while raising the cost of cable. Martin and some consumer advocates, however, contend that an a la carte option would help viewers trim spending and limit their exposure to offensive programming.
Because the FCC's authority to bar bundling isn't clear, any attempt to regulate how networks are sold is likely to wind up in court. At the very least, though, the commission can expose how much control programmers wield over the lineups offered by multichannel TV services. Just as cable operators weren't allowed to use programming to block competitors, programmers shouldn't be allowed to use their market clout to stop new TV services or business models. A TV service's lineup should reflect what its subscribers want to see -- after all, they're the ones footing the bill.