Senator Thune, the ranking Republican on the Senate Commerce Committee, is crusading to force TV stations to offer their channels directly to pay-TV customers on an individual, ‘á la carte’ basis. Thune bills his ‘Local Choice’ proposal as a ‘new’ idea, but there is nothing new about government meddling in the relationships between cable networks and content providers. The intellectual basis for Thune’s á la carte proposal is no different from the basis which underpins arguments in favor of ‘net neutrality’.
Debates over á la carte access to individual TV channels and net neutrality appear to be unrelated on the surface. But beneath the overheated rhetoric, they share the same DNA. Cable operators are the central player in both dramas. They play the role of an ‘Internet service provider’ (ISP) who provides access to the Internet in net neutrality debates, and the role of a ‘multichannel video programming distributor’ (MVPD) who provides access to cable TV in á la carte debates, but the ‘pipes’ that cable operators use to provide both services are exactly the same — it is only the jargon (ISP versus MVPD) and the legal rules that change.
The fact that the intermediary roles played by cable operators as ‘ISPs’ and ‘MVPDs’ are fundamentally the same is why Senator Thune’s support for an á la carte mandate in his Local Choice proposal is so alarming. It would force cable operators to offer each local TV channel to their subscribers on an á la carte basis at an individual price set by the TV station and would prohibit any opportunity for cable operators and TV stations to engage in market negotiations regarding channel pricing and packaging.
Eliminating market negotiations between cable operators (in their role as ISPs) and Internet content providers is also the central goal of net neutrality. Susan Crawford and other prominent net neutrality advocates have long sought to turn cable networks into ‘dumb pipes’ by prohibiting cable operators from influencing the pricing and packaging of Internet content in the same way that they have traditionally influenced the market for video channels. The net neutrality dream is to ensure that the rules governing cable operators in their role as ‘MVPDs’ do not apply to them when they are acting as ‘ISPs’. That’s why Crawford describes net neutrality as a way of preventing the ‘cable-ization’ of the Internet.
The prohibition on market negotiations proposed by Senator Thune would turn cable networks into ‘dumb pipes’ for the purpose of retransmitting broadcast programming in the same way that net neutrality would turn cable networks into ‘dumb pipes’ for Internet traffic. By eliminating the ability of cable operators to play a role in the pricing and packaging of TV channels, the ‘Local Choice’ proposal would take a huge first step toward an á la carte mandate for all video content. It would also play directly into the hands of net neutrality advocates, who have always wanted to eliminate the opportunity for market negotiations between cable ‘pipes’ and the providers of Internet content.
The link between á la carte mandates and net neutrality explains why Senator Rockefeller is so willing to work with Thune on the ‘Local Choice’ proposal. While Thune presumably sees the proposal as a limited intrusion on market negotiations for broadcast TV channels, Rockefeller “has bigger ambitions.” He reportedly wants to upend the entire video industry and the Internet along with it by providing “protections” for online video companies (think net neutrality). Unfortunately, Thune’s embrace of an á la carte mandate for broadcast programming permits Rockefeller to use the critical ‘bipartisan’ label as he moves forward with his plans to regulate online content.
Thune’s embrace of the intellectual basis for the ‘Local Choice proposal’ — which inherently distrusts market negotiations between the operators of cable ‘pipes’ and content providers — represents a tipping point in the battle over net neutrality. If Thune doesn’t believe market negotiations are capable of producing fair outcomes for pay-TV customers with respect to television content, how does he plan to justify relying on the free market to produce fair outcomes for Internet content?