As the debate on so-called a la carte pricing reverberates through the cable industry, one hard-charging player is taking a contrarian approach. Breaking with the rest of the industry, Cablevision ( CVC) Chairman Charles Dolan Thursday released a statement in support of Federal Communication Commission Chairman Kevin Martin's pick-the-channels-you-like push. "Cablevision agrees with FCC Chairman Kevin Martin's assertion before the Senate Commerce Committee on November 29 that the opportunity to purchase programming on an a la carte basis would be in the best interests of consumers," says Dolan. "Like Chairman Martin, we do not believe in the long term that selling programming a la carte will be detrimental to either programmers or cable operators." The FCC on Tuesday said it believes a la carte pricing could be good for consumers and economically feasible for operators. The notion was loudly decried by cable investors and the National Cable & Telecommunications Association trade group. "Cable's method of delivering programming packages, with channels bundled into basic and digital tiers, has proven to provide both choice and quality to consumers," the NCTA said in a statement earlier this week. "This model has enabled all programming networks, including niche networks that serve underserved audiences, to find and build an audience." Cablevision is a member of the NCTA. The NCTA had no comment on Thursday's statement from Dolan and Cablevision, noting its earlier statement this week on a la carte pricing. The Cablevision view, according to sources, is based at least in part on the premium prices the company expects to collect on its sports teams and associated channels. Still, it is unclear what unintended consequences a la carte pricing might have on second- and third-tier channels such as WE. The Dolan pitch does not mention support of legislation. Cablevision said it has previously expressed its support for a la carte pricing in the past and in earlier congressional testimony. Cablevision cable television operations, the sixth-largest in the nation, serve 3 million households in New York. Cablevision's Rainbow Media Holdings operates smaller cable channels including AMC, IFC and WE. It also owns Madison Square Garden and the New York Knicks and Rangers.
"Our experience indicates a la carte will result in a more affordable service for all with more programming options," Dolan's statement continued. "The 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." In a research note earlier this week, Merrill Lynch media analyst Jessica Reif Cohen said that the real impact of Martin's remarks would depend on what the new pricing schemes look like. Merrill says the most popular channels would probably fare well, while second- and third-tier channels could be at risk. "Given strong opposition of pay TV and content providers, significant technological hurdles, and uncertain consumer benefits, we believe it is highly unlikely that a la carte pricing will be implemented," Reif Cohen writes. Shares in Cablevision, which Dolan and his CEO son James were considering taking private earlier this year, were down 37 cents to $23.29.