Cablevision & Verizon: Will You Promise to Lower Bills?
By Swanni Follow @SwanniOnTV
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
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
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.