but consulting company questions Commission's latest findings

Revising its previous conclusion on the controversy, the Federal Communications Commission now says that letting consumers pick their own cable networks could save them money.

In May of 2004 the FCC commissioned a report on a la carte cable distribution based on research compiled by the Booz Allen Hamilton company. The Commission's new findings argue that the Booz Allen study included mathematical miscalculations and flawed assumptions.

"Based on a more complete analysis of the costs and benefits of bundling and the potential costs and benefits of a la carte," the new report concludes, " . . . a la carte could be in consumers’ best interests."

The FCC has exempted Adelphia Cable Communications from regulation in Boca Raton, Florida, despite the city's opposition to the move. Adelphia asked to be released from rate regulation on the grounds that it faces competition from DirecTV Inc. and EchoStar Satellite. The FCC's decision to grant the request was announced today.

FCC rules require a cable provider to prove that competition exists in order to justify deregulating city rates. The City of Boca Raton argued that although DirecTV and EchoStar provided service to the area, many apartment dwellers cannot access satellite cable because their balconies do not face the southern sky, the direction to point a satellite pickup device. But the FCC agreed with Adelphia that the city had not proven that 50 percent of households in the franchise area could not reach satellite services.

Consumer, conservative, and parents groups have hailed FCC Chair Kevin Martin''s suggestion that cable TV companies allow customers to buy service by the channel rather than in big packages. But the idea is getting panned in some quarters, including Congress.

Letting consumers purchase individual networks "will cause cable prices to soar, consumers to suffer and diversity in cable programming to disappear," argues Southern California Congressmember Loretta Sanchez in an op-ed piece for the San Francisco Chronicle. "If that happens, the cable industry''s most exciting new talent —” scores of programs for Latinos, African Americans, women and others — would be the first casualties."

The Orange County Democrat argues that small, struggling networks need to start out as part of a big package of offerings, generally known as "basic cable," before consumers will notice them. "Because so many viewers will peruse the network while surfing," Sanchez writes," it gets the incalculable benefit of free promotional advertising to its potential audience of millions."

The FCC today gave the first and third biggest cable companies in the nation the right to classify as "highly confidential" documents related to their bid to buy out Adelphia Communications and merge into one company.

On the 12th of this month, the Commission asked Comcast and Time-Warner for what the Wall Street Journal called an "unusual" amount of data about their proposed takeover of Adelphia Communications and its assets (see Lasarletter update 2005-12-08).

Since then attorneys for Comcast and Time-Warner have argued that many of those documents could reveal competitive information on how the two companies conduct business, especially about selling and distributing sports shows.

FCC Chair Kevin Martin issued a statement on Monday stating that he is pleased that "some cable companies may respond" to his calls for family-friendly programming packages. Martin says that he hopes that the plans "will provide parents with real options to address parents' legitimate concerns with having to purchase programming that they believe is unsuitable for their children."

The New York Times reports that the head of the National Cable and Telecommunications Association disclosed yesterday that the cable industry is, in fact, putting together packages that will address the concerns of parents worried about their children''s television viewing. Kyle McSlarrow says at least six cable companies will assemble such programming tiers, but did not say how much they would cost cable and satellite consumers.

The biggest cable provider in the United States says that it may offer a "family tier" of programming in response to concerns about decency on television.

Reuters news service reports that Comcast Vice-President John Alchin''s remarks came at a UBS Global Media conference in New York City yesterday. "If there''s a need for a family tier and it could be accommodated with programing contracts, we can meet those concerns," he told the conference during a keynote presentation.

The Federal Communications Commission has asked Time-Warner and Comcast to submit what the Wall Street Journal calls an "unusual" amount of data about their proposed takeover of Adelphia Communications and its assets. The Journal reports that the FCC wants details on at least six aspects of the deal, including reports of e-mail blocking, limiting data to Internet customers, and ownership of sports teams. Speculation continues that FCC Chair Kevin Martin is using this issue to pressure the two giants to provide "a la carte" cable programming, in which consumers could choose individual channels rather than whole packages.