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News Analysis
Cablevision & Verizon: Will You Promise to Lower Bills?
By Swanni

Washington, D.C. (March 21, 2013) - Both Cablevision and Verizon are taking steps to break up programming bundling, saying the requirement that they carry channels their viewers rarely watch forces them to charge higher monthly fees.

However, what Cablevision and Verizon are not saying is deafening. And that is if they win their separate battles, will they in turn lower their subscribers' monthly bills?

In an interview with The Washington Post, a Verizon spokesman ducked the question entirely.

"The idea of trying to tie content costs to people who watch it makes sense and that is the gist of this," Verizon spokesman Bob Elek told the newspaper. Verizon, according to the Wall Street Journal, is asking some smaller programmers to sell their channels separately rather than in bundles, which requires Verizon and other providers to pay a higher carriage fee.

Likewise, Cablevision has said its lawsuit against Viacom, which seeks to force the programmer to allow Cablevision to only pay for the channels they want, is based on helping the consumer. (Viacom, like most programmers, bundles channels so TV providers are required to take all or none. This approach leads to the providers paying more for the entire package of channels.)

“This anti-consumer abuse of market power is a key reason cable bills continue to rise and programming choice remains limited,” Cablevision said in a press release following the filing of its lawsuit against Viacom.

But Cablevision has not said that it would lower anyone's bill if it wins the Viacom lawsuit. In fact, the company has given no accounting of what it would do with its extra savings.



There appears to be no doubt that if Cablevision and Verizon win -- and can begin paying only for the channels they want to carry -- the companies would indeed save an extraordinary amount of money. Carriage agreements sometimes run into the billions of dollars over several years and the stripping of low-rated channels from the agreements would be a boon for the providers.

So why doesn't Cablevision and Verizon just say it would lower your monthly bill if they win? Wouldn't such a statement generate greater sympathy among consumers -- and a possible jury pool in New York where Cablevision is suing Viacom.

The answer is of course, which is why everyone should be skeptical of any suggestion the TV providers will lower subscriber bills if they win. If they planned to do so, they would have said so by now.

And that also goes for DIRECTV and Time Warner Cable, both of whom have publicly supported Cablevision's lawsuit against Viacom but have not tied unbundling to lower customer bills.


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