McCain wants major change in the way cable TV is sold

WASHINGTON - Americans are at a "tipping point" as it regards their monthly pay-TV bill and should be given the option of purchasing channels individually instead of as a bundle with hundreds of channels, Arizona Sen. John McCain told a Senate panel Tuesday.

"I truly believe that a lot of Americans are fed up with their cable TV bills," said McCain, speaking to a Commerce subcommittee exploring the status of the TV and video industries in the United States.

McCain was speaking to rally political support for the Television Consumer Freedom Act of 2013 that he proposed last week. It would give pay-TV providers incentive to sell channels individually or a la carte, instead of as bundles.

McCain, who has publicly supported a la carte for years, cited the soaring cost of sports programming and cable-bill inflation since the mid-1990s for the legislation.

Michael K. Powell, the former chairman of the Federal Communications Commission and now president of the cable industry's trade association, said the industry had "profound doubts" that a la carte selection would lead to lower cable bills. Programmers would have to boost the price of individual channels if they had to sell them separately, Powell said.

Powell said that cable companies had invested heavily in their networks and that the bundling of channels allows a diversity of programming that might not be supported if channels were sold individually.

The rising cost of cable was one of several video-related topics at the hearing. Others were whether the 1992 Cable Act needs to be overhauled because of the Internet and other new technology, and the future of broadcast TV.

The broadcast industry fears that the government could take its wireless spectrum for broadband and has been promoting the importance of local TV stations for news.

"Broadcast television is as relevant today as ever before," said Gordon Smith, president of the National Association of Broadcasters. Responding later to a question, he said, "Our spectrum comes with public-service obligations that others don't provide."

The hearing was attended by about 50 TV officials and lobbyists. It was one of several being held on industry topics by the new chairman of the communications, technology, and Internet subcommittee, Sen. Mark Pryor, an Arkansas Democrat.

Others speaking at the hearing were John Bergmayer, staff attorney with the nonprofit Public Knowledge, and R. Stanton Dodge, general counsel with Dish Network, the nation's third-largest pay-TV provider.

McCain, a Republican and former chairman of the Commerce Committee, was not officially scheduled to present at the hearing but was allowed to make his presentation before the scheduled speakers. He did not take questions.

In his remarks, McCain said that cable-TV bills had risen about 6 percent annually since the mid-1990s. Citing Nielsen research from 1995, cable companies sold subscribes bundles averaging 41 channels, of which they watched just 11, McCain said. In 2008, the last year for which statistics were available, the figures were 130 and 18.