Jeff Gelles: Advent of Custom TV takes on pay-TV practices

You may have read in my column about Verizon's new FiOS television offer, Custom TV. But you won't have seen commercials for it on, say, 6ABC.

Why? The answer speaks bundles - excuse the expression - about the state of today's pay-TV business, an oligopoly that profits large content and network owners while digging ever deeper into customers' pockets. Together, those companies have insisted that customers pay for huge bundles of channels when most want to watch just a handful.

Suddenly, Verizon is challenging a status quo it seemed to have accepted while rolling out FiOS over the last decade. With both broadband and pay TV, Verizon has offered cable its only true competition virtually everywhere it has ventured - including Philly, where it promises to reach every neighborhood by next February. (Some apartment dwellers seem to be left in the lurch, but that's a topic for another day.)

Until this month, though, Verizon had largely been standing pat on pricing. Unhappy with, say, Comcast? Verizon might offer an introductory discount for its end-to-end optical fiber, but you could eventually pay as much or more as for cable. Verizon's spin was that it was better, not cheaper or more flexibly priced.

That's the model Verizon is now challenging. Custom TV isn't the à la carte system that consumer groups have long urged and that makes sense with the Internet's capacity to eliminate cable companies as middlemen. But it gives more choice - which is why Disney ordered ABC stations such as Channel 6 to bar Verizon's Custom TV commercials, and why ESPN went to court in New York on Monday to block the move.

ESPN's breach-of-contract claim against Verizon is under wraps because it contains confidential contract details. Verizon officials haven't responded except to say, "We are well within our rights under our agreements to offer customers these choices."

So what, exactly, is Verizon pitching? It's what the industry has come to call a "skinny bundle" - less of what you probably don't want - plus a set of mini-bundles for customization. The first two are included in the base $55-a-month price (plus taxes and fees), and others are available for $10 a month extra.

Are you mostly into sports - including the local teams that regional networks such as Comcast's Philadelphia SportsNet have come to dominate? Custom TV offers a pair of mini-bundles that give you SportsNet along with ESPN channels, Fox Sports, NFL Network, MLB, and more than a dozen others geared toward college and pro sports.

A news junkie? The 35-channel skinny bundle gives you local channels plus CNN and Bloomberg TV. Then a "News & Info" mini-bundle adds an array of other perspectives - Fox News, MSNBC, Al Jazeera America - along with C-SPAN, Discovery, Science, and others.

Other mini-bundles are called Lifestyle, Entertainment, Pop Culture and Kids. (You can price out plans at http://vz.to/1Fyy6Ba.)

Verizon hasn't eliminated the top gripe about bundles: paying for a bunch of channels to get one you want. I could do without most of the Pop Culture lineup - if that's not the Internet's main sweet spot beyond cats, what is? - but I might want to keep Comedy Central while streaming matures.

Verizon is dead-on when it says consumers "have spoken loud and clear that they want choice," which is why Custom TV draws praise from advocacy groups while competitors and programmers squawk.

"It's not perfect, but when companies are finally trying to move in the direction of more consumer choice, that's a good sign for consumers," says John Bergmayer, a senior attorney at Public Knowledge. "It's something we'd like to encourage,"

Bergmayer says one side benefit of the fight is that it highlights how network owners aren't alone in being responsible for the costly status quo.

"A lot of people don't know that the reason you can't get a sports-free package is that ESPN insists on it," he says. "We like to blame the cable companies, but programmers share the blame."