Sen. Feingold doesn't like cable industry's bundling habits

Looks like Sen. Russell D. Feingold (D-Wis.) isn't a fan of bundling.

In written questions to Comcast and NBC Universal about their $30-billion merger proposal, the senator, a member of the Judiciary Committee, asked: "Is it common practice now to require a television distributor ...  to carry several less popular channels in order to get a cable channel that they and consumers really want?" He then wondered whether Comcast and NBC would stop the practice, according to people familiar with his letter.

What Feingold was referring to is how big media companies package channels together in deals with distributors instead of selling them individually. In other words, it's pretty hard to cut a deal to carry just ESPN without having to carry all the spinoff channels. It's a similar story at other companies that own lots of cable channels, and if Comcast took over all of NBC's big cable networks including USA, Syfy and Bravo, it too would have leverage to do some serious bundling.

What the content companies will tell you is that a distributor can  choose to carry just one channel, but the more it carries, the bigger the discount. In other words, it's a better deal for it and consumers.

That sounds nice, but what they are leaving out is that this is basically big media companies making a land grab of channel space. That makes it very difficult for smaller players that don't have the leverage to get their channels off the ground.

Of course getting some limits on the practice of bundling will be very difficult. Even cable operators that are not fans of bundling would probably be wary of some sort of official rule about it because that would move everyone one step closer to a la carte -- which is consumers' fantasy of being able to pick the channels they want and leave out the ones they don't. Neither programmers nor distributors want that to happen, and there are convincing arguments on both sides on whether going a la carte would really lower cable bills.

Feingold's questions, which were part of a bunch of questions from senators, are part of Comcast and NBC Universal's dance through Capitol Hill. A few weeks ago, executives from both companies testified at hearings on the deal, and other hearings are planned as well including February 25 in front of the House Judiciary Committee.

Ultimately, though, it is up to the Federal Communications Commission and the Justice Department to decide whether the deal goes through. But if lawmakers make enough noise, regulators will take note.

-- Joe Flint

Photo: Sen. Russell Feingold. Credit: Alex Wong/Getty Images

Comments

[Writeathome]

Our directv is bundled crap. If my wife was not here to push for it the tv would be unplugged.

[Dean Corso]

Ala carte cable service will never happen. Comcast has already lined the pockets of Congress, via lobbyists, to prevent any disruption in the way they financially sodomize consumers by forcing them to pay for crap channels that they can't get advertising dollars on and preventing smaller cable channels from competing. The government needs to change the domains of these predatory monopolies by deregulating territories and letting any cable company that can, compete for consumer business. That won’t happen either because in America MONEY talks and once admirable American business ethics, morals, honesty, and integrity, walks. And those that are supposed to protect us have already sold us out.

[Bill]

My cable bill is zero, even though Verizon would love to have me on their excellent fiber system. --- Big reason is simple, TV is a great time-waster which consists of 99% garbage and endless commercials for those little blue pills, etc. --- When I had DirecTV with Discovery and History, ended up listening to Music Choice, a great selection of music with no talking at all. --- Now have XM radio, just lots of music, no commercials and very little talk.

[Julie H]

You are onto something here! Comcast is on a quest to not just control the pipes but also the content.

If the JV is approved, Comcast will control of 7 out of 20 of the top cable channels and would own one out of every five viewing hours on television. Perhaps, even more nefarious... Comcast would also take a controlling stake in Hulu. Frustrated cable subscribers have hoped that Hulu would make cutting the cord less penal. But if you were Comcast and had 25 million subscribers on average paying $115.27 per month, do you think you would invest heavily into a technology that increased the likelihood of subscriber attrition?

@Dean Corso
Never happen? are you sure?
There is a consumer movement to bring back competition and transparency into the industry. Hundreds of folks have already signed up in San Francisco. No reason why LA should be stuck with the same old status quo.

Join the movement: TValacarte.org