Citizens Against Government Waste Off The Mark

J.J. Jackson* | September 29, 2007

At first I was ecstatic to learn that CAGW was against Congress mandating that cable companies provide al la cart options. Not because I don’t think it is a good idea, in fact many of us have begged for such an option for years, but rather because the government has no authority under the Constitution to make such laws. But then I learned this was their reasoning:

Washington, D.C. - Citizens Against Government Waste (CAGW) today urged the Federal Communications Commission (FCC) not to mandate “a la carte,” the sale of individual channels, in the cable television industry. On September 11, the FCC began considering a proposal to ban programmers from bundling channels together in the current tiered system.
“Just as dining a la carte is more expensive than a three-course prix fix meal, a la carte in the cable industry will be more expensive than the current tiered or bundled programming system for subscribers,” said CAGW President Tom Schatz.A la carte pricing would drastically change television advertising, ultimately making such a system more expensive than a tiered system for consumers. For example, a company might run an ad on ESPN hoping to reach primarily sports fans, but also reach others who might have a casual interest in the channel or those who might be surfing through channels. Reaching such a broad audience would be nearly impossible through a la carte TV as casual observers and channel surfers would be lost. Instead, advertising would be based on channels’ take-rates (the percentage of cable subscribers who subscribe to one particular channel). Advertisers will be unwilling to pay the prices they currently pay for their advertising to get on the air if it is going to reach a smaller audience.”

Generally I side with CAGW, but their logic on this is way, way off. They should have simply said that it was not the government’s role to take such action. Instead Mr. Schatz rambles on about how he assumes it would increase costs to advertisers when actually it would decrease costs because cable companies could no longer charge a rate that included the occasional and accidental viewer of a ad run on a station. Also, currently cable companies offer advertising plans that are so narrow that you can advertise on just one station in a very small area as it is to avoid having John Doe’s Hardware Store in Town A paying for ads that might appear in a market 100 miles away where no one cares about him and his store. If such a la cart advertising is good for advertisers why not for the subscriber?

CAGW also had the gall to claim that a la cart cable options would “also impair consumer choice.” Bull. If anything it increases choice by not having to pay for channels you don’t want. They further whine, “While large, popular channels such as CNN or ESPN could still be viable in this new business climate, channels like the Food Network or Lifetime could go off the air if they did not get enough subscribers to make them profitable.” Well DUH! That’s the way the free markets work! I thought you were all for that?

You folks over a CAGW disappoint me on this and I hope that you will revisit the issue and form a more coherent argument in line with liberty and actual facts than you have the first time around.

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