Falmouth's negotiations with cable provider Comcast offer an example of how local leaders can have a positive effect on our cost of living.
Many Cape Cod towns have relatively low tax rates as compared to other communities in Massachusetts.
However, this is offset by the expense of living here.
Everything, it seems, is more expensive; gasoline comes to mind. The cost of cable television is no exception, and nationally it has risen at about three times the rate of inflation. While we can blame the cost of gas on a variety of things, the cost of cable is based on bundling.
Truth be told, many cable channels are rarely watched.
For example, given our local demographics, I'm sure few would miss Telefutura. However, by bundling more channels together, cable providers can charge more under the guise of “choice.” Of course, if you can't understand it, or it's of no interest to you, it's not much of a choice.
The alternative, “a la carte” programming, where we pick and chose what we buy and watch, has been resisted by cable companies for years because it would undermine this revenue model. Washington D.C. is deadlocked over whether to require a la carte, but our local leaders could step up.
Comcast wants to continue its monopoly in Falmouth.
By demanding a la carte pricing as part of the bargain, Falmouth selectmen could accomplish what Washington has failed to do – control, if not reduce, the cost of cable.
Cable companies and other detractors claim that a la carte will cost consumers more. For example, last year the New York Times suggested that ESPN, which charges cable companies $3 per subscriber per month, would have to charge $12 to break even under a la carte. However, this is not about how much money ESPN makes; it's about how much the consumer pays and the economics of supply and demand. Were ESPN to charge $12 today, Comcast would simply pass the increase onto its customers and bundle in a few cheap, obscure channels to justify it. Under a la carte, there would be no middle man to shield ESPN. They would have to price their product to attract subscribers, not drive them away.
One need only look to Apple's iTunes service, which has redefined the way music is packaged and sold, to see what would probably happen in cable TV. Music companies want us to believe that their declining revenues are due entirely to piracy. However, Nine Inch Nails' recent album Ghosts I-IV grossed more than $1.6 million in its first week - in spite of the fact that it can be downloaded freely.
The reality is that until recently, music industry profits were based on the concept of promoting a single hit song to sell a CD full of mediocre music.
iTunes is the epitome of a la carte; instead of spending $18 for a CD full of songs you don't want, you spend $1 on the one song you do want.
We could expect a similar shake-out in cable television with a la carte.
Falmouth selectmen will probably ask for concessions like new cameras in town hall, but they need to take a more aggressive leadership role. Other towns are also in negotiations with Comcast; we need to reach out to these communities and work with them to pressure the cable provider for something of greater benefit to local residents. Something like a la carte programming.
This also appeared as an op-ed entitled Few still hungry for cable's prix fixe (I don't get to name it...the paper does that) in the Friday, March 28, 2008 Cape Cod Times.
I sent a similarly worded letter directly to the Falmouth Board of Selectmen.
By the way...for those unfamiliar with the term, 'prix fixe' is the oppposite of a la carte. It basically translates into 'fixed price.'
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