Pimentel seeks Senate probe on pullout of cable channels

Senate Minority Leader Aquilino Pimentel is seeking an inquiry into the sudden pullout of popular channels from SkyCable and Home Cable to determine if these operators may be liable for breach of their contracts with subscribers.

Pimentel said yesterday SkyCable and Home Cable, which joined operations earlier this year, should fully explain why they can no longer carry channels like National Geographic, ESPN, Star Sports and Star Movies.

"Paying customers feel shortchanged without the telecast of their favorite programs," he said.

Australia-based Star Group Inc. pulled the plug on these channels last week during negotiations with the Philippine cable providers.

Pimentel said he would file a resolution urging the Senate committee on public services to look into the complaints of subscribers who claimed they chose these cable companies because of the Star channels.

"Thousands of households were enticed to subscribe to cable because they expected to see these programs. With the cancellation, they feel they are not getting their money’s worth," the senator said.

SkyCable and Home Cable charged in a joint statement that Star was trying to bully them into buying a bundle of six channels on a "take all or nothing" basis, when the two only wanted the sports and movie channels.

Lopez-owned SkyCable said it could not afford a new contract after Star raised its rates. Star, however, said the channels were indefinitely suspended over the "non-payment of millions of dollars of fees" for the sports channels.

The withdrawal of the service has deprived viewers of the popular sports channels amid the Major League Baseball postseason and ahead of Michael Jordan’s return to the National Basketball Association.

Pimentel said cable operators owe an explanation to subscribers who cannot comprehend why SkyCable cannot afford the Star channels after a merger that was expected to boost financial standings, cut costs and offer better services.

"It seems that cable subscribers are victims of false promises. After the merger, they were told to expect more high-quality programs," the senator said.

Philippine cable television operators claimed that rising programming costs and the weakness of the Philippine peso have dealt a serious blow to the growth of the industry.

They have kept subscription rates steady since 1998, charging on the average P400 monthly per subscriber. On the other hand, they pay the program distributors around $8 to $10 per subscriber, or roughly P500.

Other countries charge as much as $20 for basic cable services.

Cable service providers have come under heavy pressure to rationalize operators as industry costs continue to rise. The unstable foreign exchange regime has practically doubled programming costs from 1997 to 2001, without a corresponding increase in subscription rates. Programming costs are expected to jump 20 percent year-on-year.

Since 1997, cable companies have been absorbing increased programming costs, unable to pass it on to customers largely for fear that demand will only go down. Program fees have risen from 20-30 percent to 40-50 percent of subscription revenues in the last four years.