New A La Carte Cable Bill Makes Rounds on House Floor

Getty Images

UPDATED: The draft, from California Rep. Anna Eshoo, would make carriers offer channels one-by-one and give the FCC power to intervene in retrans battles.

A proposed law that would allow consumers to choose cable channels on an a la carte basis and give the FCC the right to intervene in retransmission disputes hasn’t even officially been introduced yet in the U.S. House of Representatives -- but it already has opposing sides drawing battle lines.

On Monday, Congresswoman Anna G. Eshoo, who represents California’s 18th district (Silicon Valley), began circulating a draft of a bill written in the wake of the CBS-Time Warner Cable dispute that she wants to call the “Video Consumers Have Options in Choosing Entertainment Act of 2013” or the “Video Choice Act of 2013.”

The draft legislation was issued in advance of a hearing in Washington, D.C., on Wednesday of the House Subcommittee on Communications and Technology, on which Eshoo is a ranking member. Eshoo has been a Congresswoman for 20 years.

Her proposed bill is similar, but not exactly the same, as one introduced in the U.S. Senate by Sen. John McCain, R-Ariz., and supported by Sen. Richard Blumenthal, D-Conn., that would require cable distributors to offer customers the right to buy only those channels they wish to pay to watch.

In a press release announcing the draft legislation, Eshoo says that the bill is intended to eliminate blackouts cause by retrans disputes and give consumers flexibility in choosing the channels they want to buy from cable providers.

The proposed bill also would allow the FCC to try to stop one side in a retrans dispute from acting in “bad faith” by blocking certain online access, as CBS did to stop TWC customers from watching its shows on the Internet during their month-long dispute, and would also require the FCC do a study of programming costs for regional and national sports networks in the top 20 sports TV markets.

“A vibrant video marketplace is one in which there is healthy competition, consumer choice and basic protections to ensure consumers aren't caught in the middle of a dispute they have no control over," Eshoo said in a statement. "Recurring TV blackouts, including the 91 U.S. markets impacted in 2012, have made it abundantly clear that the FCC needs explicit statutory authority to intervene when retransmission disputes break down. This discussion draft is intended to spur constructive, actionable debate on ways to improve the video marketplace for video content creators, pay-TV providers and, most importantly, consumers."

The proposal immediately was endorsed by the American Television Alliance, a group that describes itself as a “coalition of consumer groups, cable, satellite, telephone companies and independent programmers.” The ATVA is funded in large part by Time Warner Cable, Dish Network and other cable and satellite operators.

“Her voice is the latest in an ever-growing chorus calling for retrans reform, and her bill is a step in the right direction,” the ATVA said in a statement. “Consumers continue to be hit with more and more blackouts and we encourage Congress to consider reform immediately.”

The National Association of Broadcasters was just as quick in denouncing the proposal, which it says fails to provide that pay TV providers must give subscribers rebates when programming is disrupted; and does not address the cable industry practice of charging fees when a customer changes to another provider during a retrans dispute.

“I am therefore surprised by the pro-pay TV slant of her retransmission consent draft bill, which could embolden pay TV giants to continue to game the system rather than negotiate in the free market for programming most valuable to viewers,” said NAB president and CEO Gordon Smith in his statement, adding: "Our overriding goal is to increase viewer access to broadcast programming. A truly 'pro-consumer' bill would ask whether Time Warner Cable's attempts to restrict that access to only its 'TV Everywhere' model does the same.

The NAB even took Eshoo to task for calling it a “blackout,” saying that the programming was still available free over the air.

The NAB also charges the latest proposed law is cable and satellite providers once again “manufacturing a crisis” over retrans when they are the ones responsible for nine out of 10 service disruptions.

An aide to Eshoo familiar with the proposed law says while the bill is the result of conversations spurred by the recent blackout, there were about 90 such blackouts last year and there already have been about 80 this year. The aide added Eshoo’s proposal is not the same as McCain’s, and it is much too early to say if the two could end up creating a single piece of legislation.

However, it is possible if both were to pass, they could be combined into a single piece of legislation.

At present, passage of either bill seems unlikely. There has not been a groundswell of support for McCain’s Senate bill, and it is unclear how much support Eshoo would have in the House. The cable industry itself has been ambivalent on a la carte legislation with some like TWC favoring it and others like Comcast opposing it.

Both TWC and CBS declined to comment on the proposed law.

Until now, the television legislation with which Eshoo has been most associated was a bill called the Commercial Advertisement Mitigation Act that made it illegal for TV stations to raise the volume on TV commercials above what it is for the programming that surrounds it. Eshoo introduced the House version of what became a law that went into effect at the end of last  year.

Eshoo reportedly got behind the TV commercial noise law after a family dinner was interrupted by a loud commercial. When she asked her brother-in-law to turn down the sound, he is said to have asked her why as a member of Congress she did not do something about it? She did.

Now she wants to turn down the volume on retrans disputes.