Should Congress Force Cable Companies to End Bundling?

I have a little brochure from Comcast next to the comfortable chair where I watch most of my TV. On it is a list of approximately 200 channels I can watch. Needlessly to say, I never watch most of them, though I pay for them all.

That kind of arrangement is called bundling and many consumers, including me, hate it. Why can’t I simply pay for the channels, and I’d say there might be 20 of them, that I actually enjoy and wouldn’t mind paying for? What’s more, in most markets there are only a handful of providers; in quite a few smaller markets, there’s only one.

That’s the argument that Sen. John McCain is making. The Arizona Republican has introduced a bill that would, among other things, force cable and satellite operators to unbundle and let consumers pick and choose on an a la carte basis. While I’m glad to see McCain taking a break from advocating yet another war, and while I wish the cable/satellite guys would back off from their arrogant, anti-consumer ways, I don’t think this is a good idea.

Here’s why:

Philosophically, I don’t see why it’s the government’s business. No one has a right to watch cable TV, and there’s no compelling public health or safety issue here, as there is when the feds regulate the auto industry.

Unlike the broadcast spectrum which is owned by the public, and thus quite fairly regulated, the cable infrastructure is private.

Ultimately it may not be nearly as good a deal for consumers as you might think. Cable providers pay a lot of money to carry certain networks — ESPN is a good example – and they charge on a per subscriber basis. So if millions of viewers cancelled ESPN, the sports network would then force the cable providers to pay much more to keep revenue up. And that, of course, would be passed on to viewers. (Here’s an article that explains this in more detail.)

Technology is making it easier and easier to put together your own menu of television offerings and cut the cord. The switch to digital broadcast now gives consumers in many locations dozens of free channels. Internet providers, including Netflix, Hulu, Amazon, and more, offer quite a bit of programming, and it’s relatively easy to stream Web content to television sets.

Sure, there’s quite a bit of programming one can’t get over broadcast or by streaming it. But as more and more consumers cut the cord — by some estimates more than 1 million have already done it — the cable guys and the companies that produce the content will be forced to change their business models. It won’t happen overnight, but just as the music industry was forced to come to terms with iTunes and then a myriad of other services, the television industry will be forced to change.

Having said all that, I realize I could be wrong. Maybe McCain has the right idea. I wish I could support him on this. I welcome your thoughts. 

Image: AllThings D