Today, U.S. Senator Richard Blumenthal (D-Conn.) announced that he will be the lead co-sponsor of the Television Consumer Freedom Act of 2013, legislation that would give Americans more control over their viewing options and their monthly cable bill by providing them with the option to buy television channels individually or “a la carte.” Blumenthal, a member of the Senate Commerce, Science and Transportation Committee, is the first Democratic cosponsor of the legislation, which was introduced by U.S. Senator John McCain (R-Ariz.) in May.
“Consumers should not have to pay for programming they don’t want or watch,” Blumenthal said. “The current antiquated, antidemocratic system imposes all-or-nothing cable packages that give consumers no control over their cable bill, and prevent subscribers from voting with their feet when they are unhappy. During the late 1990s, technological advancement and consumer demand forced the music industry to dramatically change the way it distributed music to consumers. Now is the time for the cable industry to do the same. I am proud to join Senator McCain in this effort to give consumers the options they deserve.”
“Consumers should not have to pay for television channels they don’t want to watch, and deserve the option of purchasing channels individually,” McCain said. “Today, the government and special interests have stacked the regulatory deck in favor of preserving an outdated business model that forces consumers to buy – at ever-increasing prices – ‘bundled’ cable packages filled with channels they don’t want to watch. Our legislation would give consumers the freedom to buy either individual channels or the entertainment industry’s ‘bundled’ packages, letting the market decide, not the government. I’m very proud to have Senator Blumenthal’s support for this common-sense legislation – it’s another sign that the overwhelming support for this effort among consumers is beginning to be reflected in Congress.”
For years, programmers and multichannel video programming distributors (MVPDs) such as cable and satellite argued that consumers benefited from the packaging of video programming into “tiers” citing studies that suggested the price consumers would pay if distributors were forced to sell channels on an a la carte basis would be higher, not lower, and that there were technical limitations on distributors’ ability to deliver channels a la carte. Although changes in the marketplace and technology have begun to shift the thinking of some MVPDs on a la carte purchasing, this shift in thinking has been impeded by regulatory barriers that prevent the introduction of this option.
A good example of one of these regulatory barriers is the Cable Act. The Cable Act contains “must buy” provisions that require cable companies to package all broadcast signals together as part of a “basic tier” that all subscribers must purchase before they can purchase any other services. In addition, programmers (i.e. NBC, Disney-ABC) continue to be reluctant to unbundle their channels both in terms of the wholesale market and the retail market. In other words, programmers demand that MVPDs purchase large packages of channels and also require that these channels be bundled together for sale to subscribers. Ultimately, this gives consumers less control over what they watch and how much they pay for it. The Television Consumer Freedom Act eliminates the regulatory barriers to a la carte by establishing that MVPDs have the legal right to offer any video programming service on an a la carte basis.