TV Consumer Freedom Act of 2013 Aims to Stop Channel Bundling

Published 1 year ago by

sr tv logos1 TV Consumer Freedom Act of 2013 Aims to Stop Channel Bundling

In the first salvo of what will likely be an epic battle between the U.S. Congress and cable companies, Senator John McCain introduced the TV Consumer Freedom Act of 2013, a bill that will seek to free channels from the burden of bundles, allowing cable customers to pick and choose which channels they subscribe to.

So why should we care? Well, if the bill passes, it could conceivably reward customers with a lower cable bill, but the effects that such a massive change would have on broadcasters and cable companies cannot be underestimated – and they could be good or bad for all of us.

Right now, cable companies make their money by charging customers for these flush channel packages that (surely) include many channels that we don’t watch. The companies behind those channels get paid a licensing fee by those cable companies based – in part – on how many subscribers will have a chance to see that channel.

nbc logo evolution TV Consumer Freedom Act of 2013 Aims to Stop Channel Bundling

That business model isn’t exclusive to cable channels either. Though the signal for broadcast networks like ABC, CBS, FOX and NBC goes out over the public airwaves, they too get paid something like a licensing fee because about 90% of households do not receive their TV over the air anymore – they get their TV from the cable company. How does the cable company thank those networks? A money basket. The cable companies collectively paid out an estimated $2.36 billion in re-transmission fees to those networks and their affiliates last year, and that could jump to $6 billion dollars by 2018.

Unfortunately for those networks, a new competitor has emerged in the form of Aereo. Aereo is a company that is owned by Barry Diller, and essentially, it seeks to deliver that over the air signal to its own subscribers with the help of extremely small antennas that (while avoiding those re-transmission fees).

As you can imagine, there is presently a court fight underway to stop them and some network executives have threatened to pull their networks off the public airwaves, putting them onto cable and into square competition with other cable networks while also escaping Aereo’s grasp.

Senator McCain is seeking to drop the hammer on those broadcast networks with this bill as well, should they ever leave for cable – a fantastic way to kill Aereo, but a risky proposition in that people could conceivably opt out of their channels, too, thus limiting their licensing booty.

tv consumer protection act aereo TV Consumer Freedom Act of 2013 Aims to Stop Channel Bundling

As previously stated, passage of this bill could mean a lighter cable bill, but we may also have a bit to gain as fans of good TV if the bill passes and networks have to fight with each other to woo us.

Why? Well, the present system gives the people behind these cable channels a disincentive, allowing them to be risk averse when it comes to programming because they already have a guaranteed pay day since they are – in many cases – always going to be a part of a basic cable package.

These networks still need to compete against each other and the broadcast networks for ratings and advertising revenue, but forcing them to earn that huge chunk of subscription money might actually push them to invest more heavily in becoming attractive to consumers. That could mean competitive pricing, but it could also mean a more robust lineup that works hard to stand out above the competition.

On the other hand, if the bill fails and these networks do move off the public airwaves, we could see the loss of public service content, markets that would no longer get local TV news, and there’s also that (not insignificant) number of people who would lose their TV altogether.

Beyond that, yes, we’d also have to skip past a bunch of channels that we don’t watch but do pay for, but we could also see some benefit, as broadcast networks would be free to air edgier programming that could more easily compete with cable offerings.

Having said all that, one has to wonder if this matters in the long run.

Everyone is yelling about the possible virtues of ‘a la carte’ programming, but what is viewed as possible is already here.

tv consumer protection act hulu TV Consumer Freedom Act of 2013 Aims to Stop Channel Bundling

If you want to eschew your cable company right now, you really can. Get your local news from the web or the radio, watch most broadcast and a lot of basic cable offerings on Hulu and watch the rest by buying single episodes or a show’s season pass on Amazon or iTunes.

Cord cutting isn’t just an option for the extremely connected either. In the first quarter of this year, Time Warner – the 2nd largest cable company in the US – lost more than 117,000 subscribers.

It’s impossible to prove where those people went, but it is also impossible to deny that many of those decamping subscribers either gravitated toward the Hulus of the world, embraced satellite TV, or got their TV in a less than upright manner.

An exodus like that cannot be ignored, but it also may be impossible to stop, meaning that as the cable companies and broadcasters gear up for battle against Aereo and Congress, they may already be losing the war versus irrelevancy.

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For more updates on this bill, keep an eye on Screen Rant.

Source: Deadline, THR & New York Times

18 Comments

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  1. Good! I hope this bill passes. As it stands with me right now I am about to drop my crap cable Insight. I barely have anything and I still pay $100 a month only for a few channels I watch. I have Netflix and Hulu plus a long enough HDMI cable to stretch from my computer to my tv. If Netflix and Hulu don’t have what I want I have free websites I know of I can go to and watch movies, tv shows, and sports. I’d rather pay $35 a month for internet verus $100.

  2. Go for it, Senator McCain! I always said he was the best Senator we have, and should have been President! I think instead of cable packages that force us to take cruddy channels we don’t have an interest in, just to get a couple good ones, it should all be carte Blanche, Smorgasboard-style. We put together our own packages from anywhere on the menu, and get charged either per channel added to our self-created package (say, $2.00 oer channel as an example, no limit on channels, but we select which ones we subscribe to), or at least get to pick all our own channels per tier (ie: we get one rate for say, a 10 channels package, a higher rate for 20, etc., but WE the viewer decide what will comprise our individually self-selected tiers). I have wanted this for years. In the meantime, I recommend Netflix as the best company for alternatives to cable and dish and network TV. Great service, huge catalogee, fast as lightning, well worth the cost…you can’t beat it, and you can supplement with going to channels’ websites for whatever is not available on Netflix.

  3. I support it.

    Long have the cable companies charged us for channels we don’t want in the basic package, and made us pay a premium for a package that has a channel or two we really want, but some other stuff we don’t care about.

  4. I support this for sure. We dropped our satellite (DirecTV–$97 a month) because we realized we just don’t watch much TV anymore. We can’t stand mainstream TV at all such as “reality” shows. I asked about a package that only includes the 20 or so channels we watched, including local news channels and the Discovery channels. Of course that’s not possible. So we now watch everything via Netflix streaming or Vudu. I love not having to sit through commercials and I can pick and choose what news articles I want to read instead of being forced to hear about useless information. If this happens, I’d be happy to get back on track with satellite and pick up the Discovery channels again.

  5. We cut the cable almost two years ago and haven’t really missed much. Most televisions or blu-ray players now come with those apps built in already and many households already have home wifi networks so it’s an easy setup. Between Hulu and Netflix, we’re spending $16 a month and get a good 70% of what we watched when we paid almost six times that for cable as well as have discovered some other great shows we didn’t even know about. Sure, we miss some shows but we probably shouldn’t be watching that much anyways. Plus it’s nice to let your queue build up for a few weeks and then have a nice weekend mini-marathon of shows. Not sure if this “a la carte” ordering system would bring us back as I can guarantee there would be backlash by the providers, so it would be interesting to see how it all plays out, but it has been a system I’ve been in favor for for some time. Seems silly to pay for a bunch of channels I’ll never watch yet still bloat my bill.

  6. I pay for the Big 3. Hulu, Netflix and Amazon Prime. Each has their own perks. Hulu for network television, Netflix for cartoons and obscure shows LOL and Amazon Prime (I ship a lot of goods to my home. I get their movie collection just because its included.) But I would drop Hulu in a heartbeat if FINALLY the cable companies go this route! I know its only saving me $8 a month pay possibly $50 but the bad thing about Hulu is that some networks don’t allow the broadcasting of their shows on media devices or cell phones and they only have a “last 5 episodes” rule. I really hate that. I could DVR the shows I want to watch and watch them at my convenience.

  7. I disagree with this notion about being able to cut the cord and still get everything you want from Amazon and Hulu.com

    All I want is UFC. FUEL TV, FX, Fox Sports 1, etc. You can’t buy live fights off the internet. If this I bill passes I can get buy with the bare minimum amount of channels and live happily ever after.

    • I agree with you on that point. Live sports, and most sports related programming isn’t really available online. But once it does, I think the flood gates on online programming will open. I hate that I can’t watch the NFL online.

      • If you have a crummy computer and don’t mind the possible viruses try out thefirstrow.eu. You can watch pretty much any sporting event you want on there for free.

    • Right. Every year when it is college football season is the only time that I consider buying tv again.

  8. One drawback to cutting unwatched channels, though, is that we wont get the chance to just fall into stuff. We won’t be able to explore those channels and be surprised by shows if we cut certain channels individually. It is a small thing, but something I neglected to add.

  9. Sounds great to me. My family doesn’t have cable but I miss channels like AMC, USA, and TNT. I would love to be able to pick and choose the channels I want. However, I don’t like the idea of basic cable channels getting “edgier content”. I’d like to see better shows, but edgy content isn’t necessary for good television. The West Wing was a masterpiece without sex, language, or violence. Lost and 24 were amazing, and violent, but a lack of F-bombs didn’t make those shows less good. The real problem is that network channels don’t put enough work and money into their shows. So I hope competition will help improve show quality, but not the quantity of adult content.

  10. Ah yes. The end of cable as we know it. The biggest scam of our generation. Pay $100 a month to be sold advertisements for 20% of your time. I will never pay for cable.

  11. They will never let this bill go through because most people will cut down their channels to just what they need and it will become obvious how much they have been gouging people for the last 20 years. The other problem is what will the price range be and will popular channels charge more because they know they have programming people want to see?

  12. Using the internet does not work at this point. Unless there is some way to program a DVR for each program you watch and at the same time update the recorder when a program may not be shown and all the other thing a DVR does, most would find this a useless alternative.

  13. This is stupid on many levels. Most of which is what makes this any of the government’s business. World is crumbling and government is worried about how content is delivered. The other thing most people don’t understand is the reason the channels are packaged like they are is because the networks force the distributors to take all of their junk channels to get their one good channel. Direct TV do you want Nickelodeon, you have to put 14 other channels in the package, thanks Viacom. DISH you want AMC, you have to take IFC, Sundance and 4 other channels in the package too. Comcast you want ESPN, you have to add on the other 15 ESPN channels including the OCHO.
    Short story long, if this bill passes, people can get the channels they want only, but will still have to pay about the same price or they will just go out of business. Enjoy your freedom from the evil cable companies.

  14. I support this bill hole heartedly. I only watched about ten channels when I had cable and I cancelled it because of the price and 60+ other stupid channels I didn’t watch. give us the option and ill show you better tv with channels competing against each other. bad channels will get cancelled which is a win in my book.it will make cable tv stronger in the long run and make it cheaper for the masses.

  15. Our TV bill – 0, zero, zilch. Bought a “attic” antenae for $40 and it we pickup about 30 channels. Has all the TV we want to watch. Blueray has extra net stuff that I watch once in a while (nothing that I pay for) and cable bill runs us about $40 a month, got a Magic Jack phone (not great but it works) that runs about $40 a year ($4 a month). So for $44 a month (give or take) we have phone, cable and TV.

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