Let’s establish one fact before we look at the wheels that Sen. John McCain just set in motion with his new bill to end cable channel bundling (read it here). It won’t pass. This isn’t Mr. Smith Goes To Washington. And two things have changed since 2006, the last time the Arizona Republican tried — and failed — to promote a la carte cable pricing. He’s no longer on the Commerce Committee which likely would have to move the legislation forward. What’s more, his new Television Consumer Freedom Act of 2013 has a provision that would strip licenses from broadcasters who move programming to pay TV as Fox, CBS, and Univision have threatened if they lose their court challenge to streaming service Aereo. The provision ensures that the broadcast lobby will join cable to do everything in their power to defeat McCain’s bill. The National Cable & Telecommunications Association has already weighed in. Consumers “enjoy more choice than ever before,” it says adding: “In the face of such innovation and expansion, attempting to force retail models on private providers is unnecessary and counterproductive.” Regardless of what you think about the argument, McCain and his supporters can’t match the lobby groups’ muscle.
But winning isn’t everything. By turning program bundling into an inside-the-Beltway issue, McCain has given a green light to politically obsessed editorial boards and pundits to take sides. That will present a public relations nightmare over the next few weeks for the Big Media companies that require people to pay for channels that they don’t want. Voices across the ideological spectrum overwhelmingly will side with McCain. That could leave a lasting scar on the public’s perception of broadcast and cable companies. Broadcasters “have a pretty good deal going presently,” Pivotal Research Group analyst Brian Wieser observes in a shrewd note today about the industry that could apply just as neatly to pay TV. Their ability to keep it going “may depend on a shift of focus in the public discourse to the services they offer rather than how much they are going to get paid.” If the debate over the McCain bill makes it harder to do that, then when digital services such as Aereo do become a threat “broadcasters may not have the support of Congress or regulators when they need it most.”
So keep an eye on how the issue plays politically. It could deepen fissures between pay TV programmers and operators. Look, for example, at the endorsement McCain’s bill received today from the American Television Alliance, a coalition of pay TV distributors and small programmers who want to limit broadcaster’s clout in retransmission consent negotiations. The group says the anti-bundling proposal “is sure to generate further discussion and debate, which will benefit the many consumers around the country who are crying out for reform.” McCain also could unite advocates who favor free speech with those who oppose broadcast indecency. “What we seek is the ultimate free market solution to cable, to let consumers decide for themselves which products they want to purchase,” Parents Television Council President Tim Winter says.