Is A La Carte Cable Viable?

Yesterday, Viacom (who owns MTV, VH1, Comedy Central, Spike, and a 15 other cable channels) threatened to pull all its content from my cable provider (Time Warner) unless TW increased its subscription fees to Viacom by roughly $0.25. Viacom's spokespeople argue that Viacom stations combine for roughly 20% of viewership but that their fees only make up 2.5% of TW's cable bill, so their subscription fees should be increased. It sounds reasonable when they put it like that. Of course, if you put it the opposite way--that all other aspects of TW take up 97.5% of the bill but only account for 80% of viewership, so their fees should be slashed and my bill should be decreased--it still sounds reasonable.

The whole matter rises the question: why don't we have a la carte cable television yet? I did some quick research (read: google-searched) on the subject and found several people claiming to have good reasons; however, all of them seem extremely shallow in my book.

• One person argued that it was techonologically prohibitive because special hardware would need to be installed at each subscriber's home; however, looking at my current cable box, it already seems quite capable of determining which additional channels (premium, on-demand, sports packages, etc) I have subscription to and which I don't. At the very least, urban networks based off similar cable boxes should be able to handle such an innovation.
• Another person argued that, once viewers would drop less-popular channels if allowed, leading to those channels losing subscribers and revenue. There are two major flaws with this line: 1.) it assumes these channels won't bundle with other channels to become more compelling, 2.) it assumes these channels won't be able to raise their stand-alone fee to compensate for the lost subscribers. For example, currently The Sci Fi channel receives about $0.50 of my $60 monthly cable bill. Since the Sci Fi channel is one of the few channels I do regularly watch, I would be willing to pay as much as $4/month for it individually. Assume most other fans are like me, that means Sci Fi could handle up to a 87.5% loss in subscribers and still survive.
• Another argument was that such a change would drastically alter the cable channel market, causing "the demise of cable television as we know it". I like this argument because its not really an argument at all--it's claiming cable television would be radically restructured, which is actually a good thing (assuming you believe in free markets). Forcing the cable market to accept a la carte pricing would essentially make it a free market, where good services are rewarded and bad services are punished. I'm sure the transition would be unpleasant, but the end result would be customer-driven and should be much more efficient than the current provider-driven "take-it-or-leave-it" approach.
• Finally, my favorite bogus argument was that, because subscribers would presumably own less channels, they would be less flipping through channels, which would mean they would see less commercials, so there would be a huge fallout in ad revenue. There are so many things wrong with this argument. First off, no one flips through channels to watch commercials--in fact, usually it is because they don't want to watch whatever commercial came on the show they were just watching. Second, most people don't aimlessly flip through channels anymore--they use either the Favorites button or the TV Guide functions, so by the aforementioned logic ad revenue is already at a minimum and the fallout from removing unwatched channels entirely should be negligible. Finally, subscribers would (presumably) spend JUST AS MUCH time watching TV with a la carte bill as with their current bills. (Possibly more, if you consider people who don't have any cable now but would if it was cheaper.) The value of a television ad shouldn't be affected at all--if it is, then people buying television ads are doing something horribly wrong right now.

Unfortunately, I think the REAL reason we don't have a la carte cable television is entirely political. Some organizations (the cable company, the channel providers that are collecting unjustifiably large fees, and their lobbyists) are benefiting from the current implementation, and they are heavily resisting any change to the contrary because they don't want to lose revenue. Fortunately, Good Mother Internet is providing some alternatives to cable to us (Hula, IPTV, etc). One of the articles I read suggested that it would be pointless to create any regulation for a la carte television because so many alternatives already exist via the internet. I just might call his bluff and start working on my MythTV box this weekend.