John McCain Pushes for à la Carte Cable, Providers Resist
by DailyFinance Staff
May 15th 2013 12:04PM
À la carte cable: a cheaper option for consumers, or fool's gold?
Senator John McCain is pushing a bill to allow TV viewers to pay à la
carte rates to get only the channels they watch. He told a Senate panel
yesterday that consumers would save money if they did not have to pay
for bundles of channels, most of which they rarely turn on.
He's especially focused on sports programming, especially for people
like him who rarely tune in to ESPN and other sports channels.
According to a report by the research firm SNL Kagan, ESPN charges cable
companies an average of about $5.50 per month, and that cost gets passed
along to consumers.
McCain argues about cable billMcCain says it's "unfair and wrong" that
we're forced to pay for things we simply don't want.
But the cable industry says that argument is unfair. It maintains that
bundles, such as the basic cable package, offer a wide variety of
viewing options and a better value than per channel pricing.
Consumers are often outraged by the high cost of cable or satellite
subscriptions. The FCC said the average cable bill in 2011 for the most
popular package cost more than $57 a month. That represents an average
annual increase of 6.1 percent a year, every year since 1995.
That makes à la carte pricing sound pretty attractive to many consumers.
But some analysts say most people would actually lose out, because they
would no longer have access to channels that they don't watch on a
regular basis, but do tune in to for some particular programs.
For instance, maybe you don't watch PBS very often, but love "Downton
Abbey." Or maybe there's an old movie on AMC that you want to catch.
This even pertains to sports programming. You may not watch games on a
regular basis, but you still get caught up in March Madness basketball
games or the World Cup soccer tournament.
Critics say à la carte pricing is a lose-lose proposition. They say
consumers would end up with far fewer channels to choose from without
saving much money. Smaller cable channels that are likely to get dropped
by many people would lose potential viewers. And the cable companies
would lose revenue.
Not surprisingly, a trade group representing Comcast (CMCSA), Time
Warner Cable (TWC) and other cable companies opposes McCain's bill.
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George Antunes Voice (713) 743-3923
Associate Professor Fax (713) 743-3927
Political Science Mail: antunes at uh dot edu
University of Houston
Houston, TX 77204-3011
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