• WSJ (paid subscription required), Wednesday, November 30, 2005 10:45 AM

Responding to claims by the Federal Communications Commission that tiering of channels is fundamentally unfair to consumers and is responsible for inflated bills, the nation's cable operators have gone on the offensive, countering that dismantling the current system would hurt customers and the industry alike. Geraldine Laybourne, CEO of Oxygen Media Inc., which owns the Oxygen channel, said an a la carte pricing structure, if it were imposed on the industry, would put her company "out of business. Unless we had the total possibility of widespread distribution, we could never have raised the money we raised," said Laybourne, a widely admired industry leader.(Oxygen is currently in about 75 million homes.) Other cable executives echoed similar sentiments. One unexpected development of the FCC's opinion, as reported in The Wall Street Journal, is that Time Warner and Comcast, which recently bought the assets of bankrupt Adelphia Communications, may be encouraged by the commission to offer a "family-friendly" tier of channels as a condition of their deals, which have not yet received final approval.

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