Should Consumers Be Allowed to Unbundle Their Cable Packages?
If you have a cable television package, your bill includes a charge for ESPN, as well as for several other sports channels, even if you have no interest in them. Sen. John McCain, R-Ariz., wants to change that.
McCain has introduced legislation – the Television Consumer Freedom Act of 2013 – that would allow consumers to "unbundle" their cable packages, letting them choose channels in an a la carte fashion, rather than having to purchase a slew of channels they never watch. "My legislation would eliminate regulatory barriers to a la carte by freeing-up multichannel video programming distributors – like, cable, satellite and others offering video services – to offer any video programming service on an a la carte basis," McCain said.
The goal is to save consumers money by letting them pay individually for channels. But would unbundling actually decrease prices? Some estimates show that unbundling would only save consumers a few cents every month. An analysis from Needham Insights shows that ESPN, in a world of unbundled cable, would cost $30 per month all by itself. Analysts also say more niche networks would disappear entirely if cable were unbundled.
Cable networks, of course, unabashedly oppose unbundling, as they could lose up to half of their current revenue under such a model. "I think the choice you get from cable is one of the most attractive things you get from [the bundle]," says Ed Durso, executive vice president of administration for ESPN.
But unbundling has plenty of supporters. Former Federal Communications Commission Chairman Kevin Martin, who served under President George W. Bush, said that he wishes he had done more to unbundle cable packages during his tenure. "During the current economic climate, consumers are feeling the pinch more than ever. So, at this moment we are seeing consumers faced with increasing cable bills at a time of economic turmoil for them," he said.
So should consumers be allowed to unbundle their cable packages? Here is the Debate Club's take: