What is a la carte?

The ability to price and order channels individually rather than as a selected bundle.

Why is pay-per-channel regulation (a la carte) bad for consumers?

Several independent and industry analyses have been consistent in their conclusions that government-mandated pay-per-channel regulation would be likely to hurt consumers by increasing prices, decreasing choice and reducing diversity in programming. The current model used by cable and satellite providers to deliver a bundle of channels to consumers provides both the widest variety of content and best value. This system has enabled all program networks, including those that serve niche and minority viewers, to find and build an audience. Breaking up this model would result in a higher cost per channel, and many networks serving important and diverse audiences would be forced out of business.

How would pay-per-channel regulation raise prices?

Kagan Research estimates that, under a pay-per-channel system, customers would need to select as few as six to nine channels in order to effectively reduce their monthly cable bill below its current levels. Today, most consumers regularly watch or tune into two or three times as many channels.

Most program networks rely on subscription fees and advertising revenue to sustain their business. By removing networks from a tier that is available to tens of millions of customers, a government-mandated pay-per-channel system would significantly reduce the advertising base of most basic networks. In addition, networks would be forced to increase their marketing costs to attract individual subscribers.

How would pay-per-channel regulation decrease choice?

The current cable and satellite delivery systems provide an opportunity for networks that service niche and minority audiences to reach millions of households, and potentially, millions of viewers. Since pay-per-channel regulation would force each channel to be sold individually, many of these networks would face a significant reduction in subscription fees and advertising revenue, potentially driving them out of business.

The consulting firm Booz Allen Hamilton estimates that as many as half to three-quarters of emerging networks could fail under a pay-per-channel system, including a growing number of targeted niche and ethnic program networks, and new network launches would become extremely unlikely.

Rather than invoking a mandated pay-per-channel system, how can parents protect their children from TV programming they may find inappropriate?

In addition to providing consumers with the greatest choice of entertainment and information programming that is suitable for children and family viewers, the cable industry believes that it has an important responsibility to provide its customers with the necessary tools and resources to make responsible viewing decisions.

Fortunately, with technology that is already built into the cable set-top boxes, the majority of cable customers already have parental control technology at their fingertips that enables them to block unwanted content. Most cable set-top boxes feature easy-to-use parental controls that enable parents to block channels that may be inappropriate for children.

In addition, to help parents better understand whether the content of a specific program is appropriate for children, cable networks utilize a recently improved TV ratings system that displays an icon on the screen at the beginning of each program and after each commercial break to alert viewers of a program’s rating and content.

How does pay-per-channel regulation violate the First Amendment?

In examining the impact of government-mandated a la carte, University of Chicago Professors Geoffrey Stone and David Strauss have concluded that, under standards established by the Supreme Court, a la carte and themed-tier regulation would impermissibly intrude on cable operators' editorial discretion and protected speech. Professors Stone and Strauss conclude that forcing cable operators to assemble and offer packages that exclude content that is deemed objectionable would, "constitute a content-based invasion by the government into the very heart of the editorial process."

Their report can be found here.