McCain Bill AttemptsTo Force À La Carte

Long-shot legislation would unbundle cable channel/TV station deals and block broadcaster efforts to move must-have programming to cable
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Veteran cable rate critic Sen. John McCain (R-Ariz.) last week introduced a so-called à la carte bill targeted at unbundling offerings of programmers with both cable and broadcast channels, while inserting the FCC into carriage impasses.

Broadcast and cable outlets say the bill, titled the Television Consumer Freedom Act, has effectively no chance of making it into law—it gores almost everyone’s ox—but it could provide a launch pad for lively discussion during a May 14 State of Video hearing in the Senate Communications Subcommittee, or offer fodder for ongoing future of video discussions in the run-up to consideration of the Satellite Television Extension and Localism Act (STELA).

McCain’s bill would tie à la carte to the compulsory license, untie cable programming channels from co-owned broadcast stations in retrans deals, get rid of the sports blackout rule and include a provision that could provide a boost to Aereo architect Barry Diller if the courts uphold the legality of his TV station online delivery system. That provision holds that any broadcaster who moves programming to cable would forfeit their license.

Some broadcast networks, all major station group owners—and, most notably, Fox—have intimated (and more) that they might have to move their high-value broadcast programming to cable if Aereo is allowed to deliver over-the-air broadcasts to subscribers of its online video service without compensating those broadcasters.

McCain’s measure would require programmers to make their channels available to cable operators on an à la carte basis, and would not allow the bundling of co-owned cable channels and TV stations in carriage negotiations, while also getting rid of the sports blackout rule for stadiums built with any public money. It would also require a broadcaster to deliver the identical signal to cable operators as the one they deliver over the air—with a carveout for local commercials—or have their license pulled and their spectrum reassigned.

For any programmer wondering, “Anything else?” related to the bill, McCain also hammered on cable prices in outlining the measure, as he has done for more than a decade, adding that his bill would “put up a stop sign.”

The bill promotes—some would say forces—à la carte by tying it to the compulsory license. “If the [multichannel video programming distributor] does not offer a broadcast station—and any other channels owned by the broadcaster—on an à la carte basis,” McCain said, “the MVPD cannot rely on the compulsory license to carry those broadcast stations.”

But the bill also puts the screws to broadcasters with co-owned cable channels. It says that unless they allow their channels to be sold à la carte—say, WABC separate from ESPN or WNBC separate from Golf Channel—they will lose their “important regulatory benefits” like “network non-duplication, syndicated exclusivity, blackout rights and retransmission consent option.”

The bill would also require parties who can’t agree to a carriage deal to provide their last offer to the FCC, essentially putting the commission in the deal arbitration business.

McCain has not had success in the past with stand-alone à la carte bills. But compulsory licenses and other program negotiation issues will de!nitely be part of the Senate’s discussion of the renewal of the must-pass STELA, which expires at the end of 2014.

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton

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