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.
When Sen. John McCain recently introduced legislation to reshape how consumers watch cable television, he knew he was picking a fight with some of the most influential companies in town.
“Today, we’re putting up a stop sign,” the Arizona Republican said in a May 9 floor speech. “And we’re going to find out how powerful these companies are.”
McCain’s bill 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. He blames the practice of bundling for the steady increase in the cost of basic cable, from $22 a month in 1995 to $54 in 2010. That’s an average annual rate increase of 6.1 percent, according to the Federal Communications Commission.
The battle is not a new one for McCain, who has railed against the bundling of cable channels for 15 years. He specifically points to the rapid increase in the cost of sports programming, noting that ESPN is by far the most expensive cable channel, costing four times that of second-place TNT. At a Senate Commerce, Science and Transportation Committee hearing on the future of the video industry last week, McCain called it unfair that consumers with little interest in sports must still spend almost $80 a year for ESPN and ESPN2.
“Do consumers want bundles? The answer is obviously no,” he said.
While McCain’s bill (S 912) is not the first attempt by policymakers to tackle cable bundling, it comes at a precarious moment for the television industry. The rising cost of cable, combined with the increasing availability of video content online, has given rise to fears of “cord-cutting” — consumers choosing to go without cable and relying on the Web for video content. That threat is only increased by the emergence of companies like Aereo, which offers users a cheap way to stream live programming from broadcast channels such as NBC and CBS over the Internet.
The legislation wouldn’t require that cable and satellite operators offer channels a la carte, but if they fail to do so, they could lose privileges like their compulsory license for broadcast television. Delara Derakhshani, policy counsel for Consumers Union, said the bill should put downward pressure on cable prices while generally increasing choice for consumers.
“Right now, cable companies decide exactly what programming is bundled with what other programming and at what price it’s offered. Those sorts of decisions would be best left to consumers themselves,” Derakhshani said.