A la Carte Rides Again

A la carte cable pricing has once again been resurrected by Sen. John McCain (R-Ariz.), who this time tied it to video franchising.

Under McCain's CHOICE Act (Consumers Having Options in Cable Entertainment) video providers who elect to offer a la carte pricing would be able to obtain a national franchise and pay municipalities 3.7 percent of gross revenues, instead of the current 5 percent required by municipal franchising authorities. They would also be exempt from several other facility-based provisions common in the local agreements.

The legislation is not a forced a la carte regime, but it does lift non-duplication protection for local network affiliates if the network refuses to offer its cable channels a la carte. i.e., if Disney didn't permit ESPN to be offered a la carte, ABC stations would lose non-dupe protection, allowing cable operators to import signals from distant affiliates.

FCC Chairman Kevin Martin, who inserted a la carte channel pricing into the content decency debates last year, welcomed CHOICE.

"I support Senator McCain's efforts to increase cable competition and choice for consumers as well as remove regulations that keep potential competitors out of the video business," Martin said in a statement.

The bill also merited the support of Concerned Women for America: "These goliaths of greed make no effort to meet the needs and preferences of their paying customers. They seem to care only about filling their deep pockets by charging people money for programs they don't even watch."

Commenting on behalf of the Consumers Union, Gene Kimmelman said he supported the "spirit" of the legislation, but could not endorse it.

"... It goes too far in eliminating important public obligations of video service providers to ensure nondiscriminatory delivery of cable service, diversity of local programming, and essential consumer protections, including the timely and successful resolution of consumer complaints."

The National Cable and Telecommunications Association was predictably miffed:

"It is completely unnecessary for the federal government to disrupt a competitive marketplace and engage in the pricing and packaging of video services. Most studies show that a la carte will diminish diversity in programming and result in higher prices for fewer channels, hardly a positive result for consumers."

McCain is expected to offer the bill as an amendment to the sweeping telecom legislation being hammered out in the Senate Commerce Committee.