McCain Takes Another Crack at A La Carte
Sen. John McCain, R-Ariz., introduced the Television Consumer Freedom Act Thursday aimed at giving consumers more control over viewing options, he said in a floor speech Thursday. He said the bill, which was expected (CD May 9 p2), aims to “encourage the wholesale and retail unbundling of programming by distributors and programmers, establish consequences if broadcasters choose to downgrade their over-the-air service, and eliminate the sports blackout rule for events held in publicly-financed stadiums.” NCTA called the bill “unnecessary and counterproductive,” in a news release. NAB and Dish Network did not comment.
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McCain said the video industry gives consumers two options for TV programming: “First, to purchase a package of channels whether you watch them all or not; or, second, not purchase any cable programming at all. This is unfair and wrong -- especially when you consider how the regulatory deck is stacked in favor of industry and against the American consumer,” he said. McCain has introduced a la carte legislation in past sessions of Congress that didn’t pass (CD June 8/06 p1).
McCain’s bill would incentivize video distributors to offer a la carte services by linking it to their ability to access the compulsory copyright license, he said. “The compulsory license is a benefit conferred on MVPDs. So, it’s reasonable to ask the recipients of that benefit to provide consumers with an a la carte option,” he said. McCain said the provision of the bill also ties a la carte programming to other “regulatory benefits” such as network non-duplication, syndicated exclusivity, blackout rights and retransmission consent. The legislation says if parties can’t agree to the terms of a carriage agreement the final offer made by the negotiators must be disclosed to the FCC.
Under the bill, broadcasters who decide to “downgrade” or stop providing on-air programming would forfeit their spectrum licenses, which would subsequently be auctioned for mobile broadband use, McCain said. “Our country is facing a spectrum crunch, and if broadcasters who are using the public airwaves in return for meeting certain public interest obligations are going to deviate from those obligations, it is my view that we should consider if that is the most efficient use of our country’s spectrum,” McCain said. “It would be a distortion of this basic social compact if over-the-air viewers were treated as second-class citizens.” Executives at several networks have publicly threatened to take their programming off the air to thwart the business model of online-TV startup Aereo, which streams broadcast-TV signals to consumers via the Web. Aereo declined to comment.
McCain’s bill would amend the sports blackout rule to prohibit video distributors from blacking out the broadcast of a sporting event if the construction of the sports venue was financed by the federal, state or local government. “When the venues in which these sporting events take place has been the beneficiary of taxpayer funding, it is unconscionable to deny those taxpayers who paid for it the ability to watch the games on television when they would otherwise be available,” he said.
McCain emphasized that his bill “offers no mandates, regulations and is entirely voluntary,” according to his floor remarks. “It’s time for us to help shift the landscape to benefit television consumers. Now I know the broadcasters and cable companies are likely to suggest that the government should not micromanage how they offer their product to customers and that bundling can promote diverse offerings. What those interests will fail to mention, is that the government has already entered the marketplace, and conferred certain rights and privileges like the compulsory license, network nonduplication, syndicated exclusivity and retransmission consent, which stack the deck in the favor of everyone but the American consumer.”
NCTA said “attempting to force retail models on private providers is unnecessary and counterproductive,” according to a news release. “In a thriving marketplace that is constantly providing consumers with new services and features, a government-mandated a la carte system is a lose-lose proposition. As countless studies have demonstrated, subscription bundles offer a wider array of viewing options, increased programming diversity and better value than per channel options.”
Parents Television Council President Tim Winter said the bill “is a big step in the right direction to release the stranglehold the cable industry has on American consumers,” in a news release. “What we seek is the ultimate free market solution to cable, to let consumers decide for themselves which products they want to purchase,” he said.