McCain to Propose Incentives for Cable Firms to Offer a la Carte Pricing

Sen. John McCain (R-Ariz.) plans to introduce legislation as early as today that would offer incentives for cable TV providers and network owners to allow viewers to pay for only the channels they want to receive.

McCain will offer a “bucket of goodies” to offset strong industry opposition to a la carte pricing, according to an aide, who spoke anonymously because the bill was not finished. The legislation would apply only to digital cable and would not force anyone to provide channels on an a la carte basis.

“It’s an incentive-based bill to ensure that consumers are provided more options and choices of buying channels,” the aide said.

McCain’s bill has been anticipated for weeks, and his aide said it would be introduced before Congress leaves for the Memorial Day recess at the end of next week. The senator plans to try to attach the legislation to a major telecommunications bill that the Commerce Committee will vote on early next month.

For cable companies, McCain would offer an unspecified reduction in the 5% maximum local franchise fee they pay to cities and towns for the right to offer TV service. For networks that have resisted unbundling their channels, he would extend some undisclosed Federal Communications Commission rules that would benefit programmers. For phone companies eager to offer TV service, the bill would give those agreeing to a la carte pricing a national franchise system so they’d no longer need to petition every community they want to serve.

But the National Cable & Telecommunications Assn. would oppose such legislation, spokesman Brian Dietz said.

“It is completely unnecessary for the federal government to disrupt a competitive marketplace and engage in the pricing and packaging of video services,” he said. Cable operators have promised to offer family-friendly packages but say a la carte pricing would increase rates and limit diversity by forcing some niche channels off the air.

Family advocates such as the Parents Television Council favor a la carte pricing because it would allow consumers to avoid objectionable programming. The FCC issued a report in February that said consumers could save as much as 13% with a la carte pricing.

In a statement, FCC Chairman Kevin J. Martin said he had not seen the bill but was “supportive of increasing cable competition and choice for consumers and removing regulations that keep potential competitors out of the video business.”