Comcast Sues State of Maine Over Bill That Requires Them to Sell Channels Individually
Comcast and channel owners like Disney, Discovery, Fox, NBCU, and Viacom have sued Maine over a law passed that requires providing à la carte option cable subscribers. In the law that was passed in June called, “An Act to Expand Options for Consumers of Cable Television in Purchasing Individual Channels and Programs,” mandates that, “a cable system operator shall offer subscribers the option of purchasing access to cable channels, or programs on cable channels, individually.”
A similar bill, known as the “Television Consumer Freedom Act of 2013”, was proposed federally by Senator John McCain, but never made it to a vote.
With the law set to go in effect on September 19th, Comcast and the channel owners are seeking an injunction. Much of the allure of unbundling cable comes out of the dream of consumers to pay for just the channels they want. With the increase of retransmission fees and sports rights, that get passed on to subscribers as a Broadcast TV Fee and Regional Sports Network Fee, many consumers are hoping to get out of paying the $25+ that gets added to their cable bill, as well as for the channels they don’t want.
However, by breaking the bundle, consumers won’t necessarily see overall prices go down. A 2016 paper by Professors Gregory Crawford (University of Zurich) and Ali Yurukoglu (Stanford) which analyzed the cost effecting of unbundling concluded that “some households would win and others would lose, but that on average they would be no better off in an à la carte world.”
Part of the reason that customers don’t necessarily benefit is that top cable channels, like ESPN, Discovery, Bravo would charge more for their channels if they were bundled. In the case of smaller cable channels, they may be able to raise prices for the customers who really want their channels, but with fewer consumers paying for them, revenue would drop, and they might not survive. So while you would be paying for fewer channels, you would be paying more for each of them.
The bigger issue at play is not that customers want to pick and choose the channels they get, it’s that they want affordable options for entertainment. With Live TV Streaming Services like Philo, Sling TV, and Hulu Live TV — customers at least now have a choice of a smaller bundle, where they can pay $25-50 a month.