In a characteristic break with the rest of the cable industry, Cablevision Systems Corp. chairman Charles Dolan came out in favor of letting cable consumers pay for only those channels they want to watch, siding with Federal Communications Commission chairman Kevin Martin.
In a prepared statement, Dolan said he agrees with Martin’s assertion that moving to a so-called a la carte model will provide consumers with more choice and lower-cost service.
“Our experience indicates that a la carte will result in a more affordable service for all with more programming options,” Dolan said. “The [FCC] chairman's approach, in our view, is consistent with the best traditions of retailing in this country. Consumers should not be obliged, directly or indirectly, to buy services they do not want. Cablevision has expressed its support for a la carte over the years and in earlier testimony to Congress. We hope chairman Martin's remarks encourage a move by the industry in this direction.”
The a la carte endorsement was not a stretch for Dolan. In testimony before the U.S. Senate Committee on Commerce, Science and Transportation in May 2003, he echoed the same sentiments.
At the time, Cablevision was embroiled in a battle with Yankees Entertainment & Sports Network over what the MSO considered to be exorbitant carriage fees. Cablevision wanted to make YES available to consumers on a special tier to help absorb the cost (estimated to be about $2 per subscriber, per month at the time), while YES insisted on basic-tier carriage.
Cablevision, which kept YES off its systems in 2002 while the dispute went on, offered the regional sports network on a special sports tier in 2003 before an arbitrator forced it to carry the network on expanded basic about one year later.
In a research report, Bear Stearns Cos. Inc. media analyst Ray Katz said Dolan’s endorsement of a la carte should have little effect on whether it becomes a reality.
“We would not make too much of them,” Katz wrote of Dolan’s comments in a research report. “We do not think they will have a material impact upon the debate in Washington, nor the outcome.”
