McCain Urges FCC Consideration of Cable A La Carte Pricing

John McCain Cable Satellite
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Sen. John McCain (R-Arizona) is asking the FCC to study the idea of a la carte cable pricing, in an effort to again give some momentum to a bill he recently introduced to require that cable operators give consumers the option to buy channels individually.

In a letter to acting FCC chairwoman Mignon Clyburn, McCain wrote that “for too long the government has entered the market on behalf of special interest to afford businesses the opportunity to develop and markets to mature. That time has passed. As such, I call on the Commission to review this issue and take steps to shift this balance toward consumers, by providing consumers with greater choice when purchasing television video.”

Although McCain’s legislation, called the Television Consumer Freedom Act, has drawn a great deal of attention, it has so far not advanced in the Senate and does not have any co-sponsors. McCain was once the chairman of the Senate Commerce Committee, which would take up the legislation, but he is no longer a member.

McCain, however, said that the current model amounts to a “socialized television model,” in which consumers are “forced to pay for channels they do not watch.” He says that his bill provides incentives for cable operators to offer channels individually. Under McCain’s bill, if the cable or satellite operator does not offer a broadcast station, or any other channel owned by the broadcaster, on an a la carte basis, they cannot rely on the compulsory license to carry those stations.

He also wrote that he rejects arguments from cable operators that the current system offers the best value, as an a la carte model would see the prices of certain channels, like ESPN, skyrocket, while niche networks would struggle to survive. “My instinct tells me they are wrong, and industry references to a ‘Golden Age’ of television apply to everyone but the American consumer,” he wrote.

The FCC currently has two vacancies, with President Obama having nominated Tom Wheeler to be its next chairman. Wheeler is to go through a nomination hearing on June 18, so there is a chance that the issue will be brought up then. But current FCC members have suggested that even as bills rise, a shakeout first has to be left to the marketplace.

Nevertheless, some in the cable business have warned of a consumer backlash. At the Cable Show on Tuesday, Time Warner Cable CEO Glenn Britt called for more flexibility in pricing.