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McCain bill sparks conflict between ACA and NCTA

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Lobbying groups representing big and small cable operators offered conflicting views on the Television Consumer Freedom Act proposed by Sen. John McCain (R.- Ariz.) Thursday.

John McCain

Click here to view McCain's introduction of the Act.

The National Cable Television Association, whose biggest member is Comcast (Nasdaq: CMCSA), called the bill a "lose-lose proposition." But the American Cable Association, which represents small and mid-sized cable operators, said it supported everything in the bill except a provision that would require cable operators to offer consumers a-la-carte programming options.

ACA has been lobbying Congress and the FCC to make it illegal for programmers that own both TV stations and broadcast networks--including Comcast, Walt Disney Co. (NYSE: DIS) and News Corp.  (Nasdaq: NWSA)--to tie retransmission-consent deals for TV stations with carriage deals for cable networks. McCain's bill would ban that practice, and could also prevent programmers such as Viacom (NYSE: VIA) from requiring operators that want to carry popular networks such as Comedy Central and MTV to strike broader deals that include distribution of ancillary networks such as VH1 Classic and Paladia.

ACA also opposes that practice. "In today's pay-TV world, programmers prefer that consumers have less choice, and we agree that this sorry situation needs to change," ACA CEO Matt Polka said in a prepared statement.

But both ACA and NCTA said they opposed the idea of offering consumers pure a-la-carte programming choices, with NCTA noting that consumers can already get a-la-carte choices by watching online video on connected TVs and mobile devices. "In the face of such innovation and expansion, attempting to force retail models on private providers is unnecessary and counterproductive," NCTA said in its statement.

McCain introduced the bill one month before NCTA is scheduled to kick off The Cable Show in D.C., a convention that it has been planning to use as a venue to woo legislators and regulators, and lobby against new regulations that could thwart cable operators from rolling out usage-based broadband pricing and data caps for their high-speed Internet services. The McCain bill will now take center stage at the industry's largest annual convention.

The proposed legislation will likely ignite a huge lobbying effort from Comcast, Disney, Viacom and News Corp. McCain appeared to welcome the battle in a speech he gave Thursday while introducing the bill on the floor of the Senate. "Today we're putting up a stop sign, and we're going to find out how powerful these companies are," McCain said.

McCain noted FCC data that has found that the average monthly price for expanded basic cable packages jumped 5.4 percent for the 12 months ending Jan. 1, 2011, to $54.45, while the Consumer Price Index increased 1.6 percent during the same period. He noted that the average price for expanded basic has jumped from $25 monthly in 1995 to $54 today.

The proposed legislation would also prevent broadcasters such as CBS and Fox from converting to cable networks to thwart technology firms such as Aereo that distribute over-the-air programming to viewers on the Web and through mobile devices. Broadcasters would lose their spectrum licenses if they attempted to move programming to cable-only distribution, McCain said.

Sports blackouts would also be prohibited, under the bill, which would impact the National Football League and Fox, NBC and CBS stations.

For more:
- here's video of McCain introducing the bill
- see statement from McCain
- see the NCTA statement
- see the ACA statement

Related articles:
McCain bill would break up cable bundles, penalize broadcasters that move to pay TV model
ACA's Polka: Small cable operators may exit pay TV business
NCTA books top Comcast, Time Warner Cable, Liberty execs to speak at The Cable Show