McCain recently introduced a bill that would encourage cable providers to offer consumers the option of purchasing channels individually, rather than being forced to subscribe to a package of channels, or bundle.
Powell said his member companies, which include most of the major cable and broadband providers, would favor small changes to existing laws rather than a sweeping overhaul. That stance could prove appealing on Capitol Hill, where lawmakers are wary of interfering with a fast-changing market only to have their regulations quickly rendered irrelevant by new technology.
“The bill would have a long road to passage, but what’s important now is for discussion to begin in earnest,” Polka said. “There really is a role for Congress. Even though the marketplace is changing, it’s likely not going to change fast enough as content companies continue to get bigger and demand higher fees, bundle more programming and sports becomes a bigger part of their offerings.”
That conversation has already begun in Congress, but appears unlikely to result in legislative action anytime soon. Given the partisan divide in Congress and the generally hands-off attitude toward new or emerging technologies, an overhaul of the cable laws would appear to be a tough sell. However, all sides of the issue acknowledged that cable prices are reaching the point where consumers may force action.
“The government may be forced into this simply because the price reaches a point where it becomes untenable,” Polka said. “Where that is, I can’t predict, but I’ve seen articles that regular monthly cable could be $200 a month. Consumers, I think, would revolt sometime before then.”
Feld suggested that “without some kind of change in the market incentives, we’re going to continue to see the industry in the same cycle its been in for a number of years.”
“The most powerful content providers will continue to jack up the prices, the most powerful [cable and satellite] operators set terms for offering the stuff online and consumers continue to lose out on potential innovation,” he added.