John McCain Wants to Lower Your Cable Bill

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In an ideal world, television viewers would only pay for those shows and channels that they actually care about. The concept, known as TV a la carte, has been a pipe dream of cord cutters and disgruntled cable subscribers for years. Thursday the movement received a significant boost from an unlikely political ally: John McCain.

The Arizona Senator introduced a new bill, the Television Consumer Freedom Act, that would present incentives to both cable operators and television networks to let consumers choose the channels in their subscription. Right now, all customers pay substantial “carriage fees” for the most popular channels—ESPN is pegged at about $5 per subscriber—whether they want them or not.

The biggest change would come in the way networks sell their channels to cable operators. Right now, media companies like Disney and Viacom sell their channels in bundles, forcing operators to pay for third-tier networks in order to get access to ESPN or Nickelodeon. Cablevision is currently suing Viacom for the practice.

(MORE: Young Americans Won’t Pay for TV. Will They Ever?)

McCain’s bill would force the networks to unbundle their products, theoretically allowing cable operators to be more thoughtful in their channel selection and pass the savings on to consumers. In the past, though, television networks have argued that bundling channels allows niche programming to exist when it would otherwise be economically unfeasible.

The bill “is about giving the consumer more choices when watching television,” McCain said on the Senate floor. “It’s time for us to help shift the landscape to benefit television consumers.”

While the bill requires networks to unbundle their channels, it only encourages cable operators to offer consumers a similar luxury. Cable companies that refuse to offer channels individually would lose out on a special compulsory copyright license which allows them to air content from broadcast networks for a set fee without getting tangled up in individual channel negotiations, as they do with cable networks.

In another potential blow to the broadcast giants, the bill also gives them less leverage against controversial startup Aereo, a streaming service that digitizes the over-the-air signals of the broadcast networks without paying them. In April, a Fox executive threatened to pull the channel off the broadcast airwaves if Aereo was not shut down by the courts, but McCain’s bill would revoke a network’s broadcast license if it offered different content for cable subscribers and viewers receiving over-the-air signals.

(MORE: Murdoch’s News Corp. Threatens to Pull Fox Off the Air in Aereo Dispute)

With clauses aimed at both television networks and cable and satellite operators, the bill isn’t likely to find many supporters in the traditional television industry. Despite very public spats between these entities when they negotiate carriage fees, the two sides have created a highly lucrative relationship based on the idea of selling consumers more content than they need. “I’d be surprised if this thing isn’t opposed by a lot of very strong forces,” says Harry Cole, a communications lawyer at Fletcher, Heald and Hildreth.

There’s also nothing in the bill that explicitly obligates cable companies to make their a la carte pricing affordable. In the same way that they make cable and Internet bundles more financially appealing than buying the two services separately, operators might choose to make individual channels so pricey that consumers stick to bundles anyway.

The TV a la carte movement might have more success in the online space. The niche programs that networks lament would be squeezed out in a cable shakeup are already staking out ground online, with everyone from Netflix to Amazon to Microsoft investing in original content. Aereo, which launched in New York last fall, is expanding to Boston next week. Meanwhile, Google’s YouTube announced Thursday the introduction of a pay service where people pay as little as $0.99 per month to subscribe to individual channels.

“This bill is being drafted against the backdrop of technology which is accelerating rapidly every day,” Cole says. “At no point is the development of video distribution technology going to stop long enough for John McCain or anybody else to come up with the ideal language that will best serve all interests.”

9 comments
Al_Buraq
Al_Buraq

Demonstrating once again, that Washington is always about a decade behind the rest of the country.  After contemplating a $94 bill for Dish TV and realizing that there is nothing on TV, I ditched the Dish and found that John McCain's a la Carte menu already exists in the form of streaming services and over-the-air broadcasts in HD.  Now I pay Hulu and Netflix a couple of bucks and I have considerable more watchable content for around 15 bucks a month.  ESPN recently joined the Roku lineup which signals to me that the writing is one the wall.

Technology moves the world, not politics.

BobBlock
BobBlock

McCain and his other elected cronies continue to shirk the important issues of the day by trumpeting and screeching about things the government has no business in attempting to legislate. This is one.

They are showing that they are shying away from dealing with the real high, hard items that they should be spending time and resources on like eliminating the budget deficit and paying off the debt THEY created. 

Anyone remember the story about Nero fiddling while Rome burned? Keep plucking those strings John and crew - you are leading us down the wrong road.


optimistic
optimistic

Obviously TV is going to be the next major sector to be disrupted and permanently changed by technology, like the music industry was a decade ago. the Aereo controversy is reminiscent of the Napster ordeal.

DeweySayenoff
DeweySayenoff

"...television networks have argued that bundling channels allows niche programming to exist when it would otherwise be economically unfeasible."

So why are they on their own channel? Let them band together to broadcast on one channel and select their most popular shows.  I, for one, wouldn't give two craps if the Golf channel went permanently into the rough, the Food Network ate it, and the Travel Channel got lost (among other less easily punned "networks").  Let them figure out how to adapt to ala carte programming.  If they fall, they weren't economically viable in the first place.  

As for McCain sponsoring this bill, he's wrong-headed in most things (at least ever since the early 2000's when he sold his soul to the rightist Devil), but I'd LOVE to see this come back, provided the prices aren't the same as before.  I'll pay a buck or two per channel per month (depending on how much I like them), but I won't pay more than about 20-30 bucks a month.

MarkSpivey
MarkSpivey

McCain wants to lower our cable bill so that the american tax payer will have more money to help pay the 6.3 trillion dollar debt that immigration reform will cost

BigDog1940
BigDog1940

Time for the lobbyists to start shoveling cash $$$ into legislator's bank accounts.

MikeJustice
MikeJustice

Hate to break the news to you genius, McCain is not the President.

DeweySayenoff
DeweySayenoff

@MarkSpivey I'd love to know where you got your figures.  Immigration reform means immigrants will be paying taxes instead of being paid under the table.  That means they'll be getting less money up front.  That makes it less attractive to come to the U.S. at all.

If you're talking about tax losses to the U.S. taxpayer, maybe you should look at what the taxpayer gains by having illegals pay taxes in the firs place.

And speaking of "in the first place", what the HELL does immigration reform have to do with cable rates?

MikeJustice
MikeJustice

It means they will be heading for food stamps and Medicare genius..