06.12.2006 08:00 AM
McCain intros a la carte cable legislation

U.S. Sen. John McCain (R-AZ) introduced a bill that would provide regulatory relief to video service providers who agree to unbundle and sell individual pay television channels to subscribers.

In exchange for offering channels to consumers on an a la carte basis, video service providers would: receive the right to obtain a national franchise; pay lower fees to municipalities for the use of public rights of way; benefit from a streamlined definition of “gross video revenue” for the calculation of such fees; and prohibit the solicitation of institutional networks and in-kind donations.

Called the Consumers Having Options in Cable Entertainment (CHOICE) Act of 2006, the bill is designed to grant significant regulatory relief to video service providers who agree to both offer cable channels on an a la carte basis to subscribers and not prohibit any channel owned by the video service provider from being sold individually.

Broadcasters with an ownership stake in a cable channel would get the benefit of the FCC's network non-duplication rule if the broadcaster does not prohibit the channel from being sold individually. The bill also would extend Section 616(a) of the Communications Act to extend this provision to distribution over the Internet.

McCain emphasized that his proposal is not a mandate on cable providers. “Instead it is designed to encourage choice and competition by granting significant regulatory relief to video service providers, such as telephone and cable companies, that agree to both offer cable channels on an a la carte basis to subscribers and to not prohibit any channel owned by the video service provider from being sold individually.”

The senator said his bill does not force video service providers or broadcasters “to do a single thing.” He said it is their choice whether to act or not act. The bill, he insisted, is “incentive-based legislation that would encourage owners of cable channels to make channels available for individual purchase and would do nothing to prevent cable companies from continuing to offer a bundle of channels or tiers of channels.”



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