McCain bill seeks 'a la carte' cable channel subscriptions

Reuters News
Posted: May 09, 2013 6:04 PM
McCain bill seeks 'a la carte' cable channel subscriptions

By Alina Selyukh

WASHINGTON (Reuters) - Senator John McCain introduced a bill on Thursday that would uproot the current system of bundling cable channels and let customers pay for select channels on an "a la carte" basis, a move likely to face stiff industry opposition.

The influential Republican's bill, dubbed the Television Consumer Freedom Act, comes at a time when cable prices are rising and pressure is mounting for programmers to stop forcing consumers to pay for subscriptions to lower-rated cable networks in order to watch more popular channels.

The move drew criticism from a leading cable trade group, which has long opposed "a la carte" programming. The industry has fought with regulators for years to protect the right to bundle, arguing that it offers customers the best value.

McCain, a long-time critic, called it "unfair and wrong" that consumers must choose between paying for dozens of channels they might not watch, or not getting a cable subscription at all.

"For over 15 years, I have supported giving consumers the ability to buy cable channels individually ... to provide consumers more control over viewing options in their home and, as a result, their monthly cable bill," McCain said.

Prospects for the legislation are unclear, but the bill has re-focused a debate that has for years consumed broadcasters, programmers and distributors, caused headaches in Washington, and led to some high-profile court cases.

In one current case, Cablevision Systems Corp is accusing Viacom Inc of forcing cable providers and subscribers to buy channels they do not want. Viacom has asked the court to throw out the lawsuit.

Cablevision founder Charles Dolan and Charlie Ergen, the billionaire chairman of Dish Network Corp, have advocated for an "a la carte" model. But Ergen, asked about the bill on an earnings call on Thursday, sounded skeptical.

"There are six big or five big groups that probably have enough clout in Congress" to stop the legislation, Ergen said, adding, "we'll see."

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The National Cable & Telecommunications Association fired back at McCain.

"A government-mandated a la carte system is a lose-lose proposition," the group said in a statement. "As countless studies have demonstrated, subscription bundles offer a wider array of viewing options, increased programming diversity and better value than per channel options."

In a nod to the high-profile debate over online TV service Aereo, McCain's bill would strip operation licenses from broadcasters that decide to take their programming off free airwaves to be offered to cable subscribers only.

Last month, News Corp's Fox TV network threatened to become a cable channel if courts do not shut down Aereo, which offers cut-rate TV subscriptions by capturing broadcast signals over thousands of antennas at one time.

(Reporting by Alina Selyukh; Editing by Ros Krasny and Jan Paschal)