Policy

McCain to Nets: Test a La Carte

2/13/2005 7:00 PM Eastern

Washington— Sen. John McCain (R-Ariz.) last Thursday called on networks to permit a la carte market tests by cable companies to determine if such a program-purchasing system could hold down cable rates.

“I urge companies in the content industry to work with these providers to allow a valid market test to proceed, so that policy-makers can debate the merits of channel choice for the first time with concrete data in hand,” McCain said.

RATE-HIKE PEG

McCain’s statement was a response to the recent Federal Communications Commission report which showed that cable rates rose 5.4% in 2003. McCain claims cable rates keep rising faster than inflation due to the absence of significant wireline competition to cable incumbents.

The FCC report, McCain said, showed that cable rates don’t rise as fast in so-called overbuild markets, where consumers can choose between two local cable providers.

“Competition matters. Therefore, I will continue to champion policies that promote competition to the incumbent cable operator from other technologies, including overbuilders, satellite providers, wireless carriers and telephone companies using Internet protocol-enabled services,” McCain said.

McCain was chairman of the Senate Commerce Committee last year, but had to yield the gavel this year to Sen. Ted Stevens (R-Alaska) under Senate GOP rules that limit the terms of committee chairmen.

TWO OPS NAMED

McCain said that RCN Corp. and PrairieWave Communications were two cable companies willing to conduct tests in which consumers may purchase channels a la carte or select from several packages.

“These carriers want to allow consumers to purchase additional options of bundles or individual channels, thereby providing consumers with more control over their bills, particularly those consumers who watch only a few channels, and over the content they welcome into their homes,” McCain said.

“A market test is the only true way to understand both the merits and shortcomings of alternate channel packaging.”

September