John McCain: “ESPN Tax” Needs To Go
John McCain became the best friend of many cable subscribers around the country earlier this month when he introduced the Television Consumer Freedom Act. The bill would allow consumers to subscribe to only the channels they want instead of having to pay for expensive bundles full of channels they’ll never watch. Now the congressman is pushing his bill in a wonderful op-ed piece for The Los Angeles Times.
The core argument from McCain is that the cable industry needs to be more like iTunes or Netflix. It should allow customers to consume entertainment when and how they want. He laments that the cable industry is fighting against convenience by using federal regulation to push expensive bundles on consumers.
Reinforcing this fundamental unfairness is a federal regulatory and legal framework that tilts in favor of cable companies and television programmers at the expense of consumers.
This framework, which includes arcane but important benefits such as “compulsory copyright licenses,” “syndicated exclusivity,” “network non-duplication” and “retransmission consent,” was originally developed to help the fledgling industry grow. Today, these benefits, vigorously defended by armies of well-paid lobbyists, are helping sustain the status quo while failing to push the industry to meet modern consumers’ evolving demands.
All of this, McCain says, leads to consumers having to pay what he calls the “EPSN tax.” While some consumers may want to watch ESPN, millions of others don’t care about sports. Despite the fact that they never watch ESPN, they are still forced to pay, by his calculations, $5 a month for the channel.
He says that the practice of making consumers pay for channels they don’t want must come to an end. Of course, he realizes this this is harder than it sounds. He says that the cable industry is “firing up their legions of lobbyists” to fight the bill to the bitter end. To them, he has but a simple warning:
Many industries over the years — from the stagecoach builders and saddle makers to those who made the eight-track tape and the Sony Walkman — didn’t much like the change forced on them by the tide of history. Sooner or later, companies standing in the way today will face a similar choice: Meet consumers’ demands or become obsolete.
Some may have issues with McCain’s current bill, but it’s heart is in the right place. There is far too little consumer choice in entertainment these days. If he’s successful in taking on the cable industry, we could see wide sweeping reform in other entertainment industries as well. Being pro-consumer can only help bolster profits in the long run and it’s about time these industries learned that.