So many channels, and most viewers don’t want them all

WASHINGTON — Sports fans everywhere want to know: “Why do I have to subscribe to the soap opera channel when all I really want is ESPN?”

That’s the kind of question the cable TV industry hates answering. The channel choice issue comes up every few years, but people who argue that subscribers should be able to choose channels “a la carte” have never made any real headway.

The latest effort, and the newest reasoning for requiring cable companies to offer channel choice, or a la carte cable, has to do with yet another issue: television violence.

The Federal Communications Commission released a report in late April suggesting to Congress that an a la carte system would allow parents to shield their children from violent shows by not subscribing to the channels that carry them.

FCC Chairman Kevin Martin, who has been unshakable in his support of channel choice, says it can’t happen without federal legislation. And thus far, the issue has gotten little traction on Capitol Hill.

Sen. Jay Rockefeller, D-W.Va., who is expected to unveil a bill addressing television violence any day now, has opposed the creation of an a la carte system.

The overall lack of support might seem surprising, considering that the average household in 2006 received 104 channels, yet tuned in to only 16 of them, according to the Nielsen TV ratings company.

If we aren’t watching all those channels, why can’t we just pick the ones we want and avoid paying for the rest? The answer lies within the arcane world of cable television economics.

In the old days (pre-1970s), cable systems provided viewers with broadcast channels that viewers couldn’t tune in because the signals were too weak where they lived.

Since then, there has been a steady growth in cable-only channels, starting with popular ones such as HBO, CNN, MTV and ESPN.

Federal law requires cable companies to offer a bare bones, “basic tier” of service, consisting of local broadcast and public access channels. The second tier, commonly known as “expanded basic,” includes most of the major cable networks. There’s usually no choice on this tier; subscribers get all the channels or none of them.

Beyond that, subscribers may pick premium channels like HBO, that are priced separately.

Unlike over-the-air broadcasters, which rely almost entirely on advertising to stay in business, cable networks earn about half their revenue from per-subscriber charges levied on cable system operators. Those costs are passed on to cable subscribers.

Two types of companies dominate the cable industry: those that own both broadcast and cable networks (like Walt Disney Co.); and those that own both cable systems and cable networks (like Time Warner Inc.).

Disney, for example, owns the ABC television network, which feeds programming to 228 affiliates, several popular cable-only channels (80 percent of ESPN) and several not-as-popular cable channels (SOAPnet).

Cable customers demand that their local cable company carry the ABC affiliate so they can watch popular shows such as Desperate Housewives and Lost, or catch the local news. Disney can charge the cable operator to carry the ABC network, but the cable operator can avoid the cost by agreeing to carry other, less-popular Disney-owned networks.

The second model is a form of vertical integration, or ownership of the cable delivery system as well as its programming content.

Time Warner owns the second-largest cable television service in the nation with 13.4 million subscribers. It also owns some of the most popular cable channels in the United States. That means that Time Warner the cable system owner has to negotiate with Time Warner the cable channel owner to provide programming.

In a nutshell, the cable television business is a closed, profitable system with a small number of very large players who negotiate secret deals with one another and have a vested interest in maintaining the status quo.

“The whole system feeds on itself,” said Jeannine Kenney, senior policy analyst with Consumers Union, the nonprofit publisher of Consumer Reports magazine. “It’s almost like everyone benefits except for the consumer and the independent content provider.”

An a la carte regime would blow up that system and disrupt its economic model. And that would lead to higher prices and less programming diversity, according to the National Cable and Telecommunications Association, an industry trade group.