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RCN offers to test a la carte pricing;Cable firm relents following Senate decency hearings

Wed, 12/14/2005 - 5:59am

Copyright 2005 Globe Newspaper Company
The Boston Globe
December 14, 2005 Wednesday
THIRD EDITION
By Keith Reed, Globe Staff
From LexisNexis

RCN Corp., a cable company with subscribers in Massachusetts, yesterday offered to test a pricing plan that would give subscribers greater flexibility to choose the channels they want, another sign that the cable industry's decades-long united front against a la carte pricing may be crumbling.

Responding to a week of hearings in the Senate over decency standards in cable programming, RCN chief executive Peter D. Aquino said yesterday that he supported Federal Communications Commission chairman Kevin Martin's view that cable companies should voluntarily adopt more "family-friendly" programming options. He endorsed the idea of selling channels by theme as a way to achieve that goal.

Martin and some legislators have indicated they would seek to impose controls on cable programs, including legislation that would impose a la carte pricing, if the industry does not limit access to programs filled with sex and violence on their systems.

"RCN believes that themed-tier a la carte would allow cable operators to offer consumers smaller programming tiers, limited to the kind or categories of programming they most value," Aquino said in a statement the company issued yesterday afternoon.

His comments could mean that a la carte pricing would become an option for local subscribers. RCN has more than 70,000 subscribers in Massachusetts, according to data from the state Department of Telecommunications and Energy.

The cable industry has long rejected a la carte letting subscribers choose channels instead of prepackaged lineups arguing that that model would make programming more expensive and limit consumers' choices.

But that stance weakened last week when Charles Dolan, chairman of Cablevision, the country's fifth-largest cable company, said in a Senate hearing that a la carte was a viable option for the industry. Also forcing the cable industry's hand is looming competition from phone companies like Verizon Communications Inc., which plans to launch a fiber-optic based television service in Massachusetts next year and has said it supports a la carte pricing.

Aquino stopped short of endorsing a total a la carte model, instead saying that RCN would like to test selling themed tiers of programming, such as family channels in one grouping and sports in another, as soon as it could. A spokeswoman for the company said last night that no dates for a potential trial had been set.

Bruce Leichtman, president of telecommunications research firm Leichtman Research Group in Durham, N.H., said he is not convinced a la carte will be a reality in the near future.

"Can it physically be done? Yes it can. Will it? No way," he said. "Certainly there's a segment that wants less and to pay less for it, but a la carte is not going to lower rates, so what we might see is some family-friendly tiers."

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