A La Carte Programming Would Only Hurt Consumers

The Senate Subcommittee on Communications, Technology, and the Internet held a hearing this morning on the State of Video, which was set to discuss all aspects of video delivery and programing.  However, Senator John McCain’s proposed Television and Consumer Freedom Act of 2013, which includes a la carte programming provisions garnered considerable attention.

The morning of the hearing, Americans for Tax Reform sent a letter to the Senate Commerce Committee urging them to oppose a la carte programming. The letter notes that “While this legislation seeks to broaden consumer choice and lower monthly cable bills, it fails to take into account that consumers can already choose from a litany of video services.  Consumers can purchase programming from a traditional local cable operator, like Time Warner Cable or Cablevision; from a telephone company, such as AT&T U-verse or Verizon FiOS; from a satellite company, like DirecTV or Dish; or from any one of a growing number of “over-the-top” providers, such as Netflix, Amazon, Apple, Hulu, and YouTube.”

In addition to Senator McCain’s statement, the committee heard from National Association of Broadcasters President and CEO Gordon Smith, National Cable and Telecommunications Association President and CEO Michael Powell, DISH Network Executive Vice President and General Counsel R. Stanton Dodge, and Public Knowledge Senior Staff Attorney John Bergmayer. While the hearing touched on many issues related to the state of the video market, chief among those discussed was the portion of Senator McCain’s bill which would require broadcasters to provide a la carte channels in addition to bundling options.

But why reincarnate a bill that was killed in 2007, when in the years since 2007 consumer choice has only expanded? Senator McCain and a la carte programming proponents such as Bergmayer insist requiring the option will allow consumers to pay less. Yet they ignore the fact that numerous third party organization including the Government Accountability Office, Congressional Research Service, and Federal Communications Commission have published research showing that prices would in fact rise, information which DISH Network’s Dodge noted in his testimony.

Unfortunately this is not the first time Senator McCain has raised the misguided notion that a la carte programming would benefit consumers. He introduced a similar bill in 2007-a bill that received a paltry 2 votes in committee. Such a reception, along with the wealth of research showing why a la carte raises, rather than lower prices, should have been enough to see it die for good. The video marketplace is a rapidly changing one, and its regulatory structure certainly needs work. However reforms should be free market based ones that allow consumers and businesses to interact without government mandates and interference.