

Sports broadcaster Bob Costas looks into the camera while on set during a game between the Washington Redskins and Dallas Cowboys last year in Arlington, Tex. (AP Photo/LM Otero)

Late last week, two senators formally rolled out a plan that, if passed, would dramatically reshape the economics of television. The idea is to unbundle broadcast programming so that individual consumers could pick — and pay for directly — only the channels that they want to watch. Broadcasters oppose the idea because it would limit their ability to extract revenue from big, wealthy cable companies. But in challenging the proposal, the broadcasters are actually sounding a lot like their negotiating partners in the pay-TV industry.

When Sens. Jay Rockefeller (D-W.Va.) and John Thune (R-S.D.) introduced the legislation Friday, broadcasters quickly attacked it. The bill "will lead to higher prices and less program diversity," said Gordon Smith, chief executive of the National Association of Broadcasters (NAB).

TV Freedom, which represents broadcast affiliates, state broadcast associations and the NAB, among others, called the plan — known as Local Choice — a "pay-TV giveaway."

"Any congressional bill that includes the components of the Local Choice proposal will ultimately cost pay-TV consumers more for less programming under an unproven and often criticized a la carte model," the group said.

It so happens that the broadcasters' language is the same, down to the word, as the rhetoric that cable companies use. In a 2004 paper, the National Cable and Telecommunications Association argued that cable unbundling, despite its appeal among some, would "reduce program diversity" and "increase prices for consumers."

Before we go on, a bit about Local Choice. The plan would flip the current relationship between broadcasters and cable on its head. Instead of having cable companies pay broadcasters for over-the-air content — which involves complicated, opaque negotiations and massive sums of money changing hands — broadcasters would sell their programming to pay-TV subscribers directly. You could choose to buy CBS and NBC alone, but opt out of ABC if you wanted to, under this plan.

Local Choice is meant to address rising charges levied by broadcasters on cable companies. The trend has alarmed federal regulators who believe that an 8,600-percent increase in "retransmission" fees over the last seven years has led to a simultaneous ballooning of cable bills. And there's no sign of slowing: CBS has indicated that it wants to quadruple its retransmission revenues to $2 billion in 2020, up from $500 million last year.

Why are broadcasters and cable both so opposed to unbundling? To tackle just one part of it, imagine that you could suddenly buy ESPN on a standalone basis from Comcast. Suddenly, rabid sports fans who once paid for Fox Sports 1 and ESPN together as part of a bundle would just start buying ESPN. Perhaps then Fox Sports 1 would jack up prices on its remaining subscribers, and ESPN — armed with a better idea of its true audience size — would raise its channel price, too, knowing that the people who are watching will pay through the nose to get their programming. (For an idea of how much ESPN already charges cable companies, check out this data from the research group SNL Kagan. For more on the case for bundled cable, the New York Times' Josh Barro has a good summary.)

The process of unbundling broadcast would involve many of the same dynamics. Individual networks might be tempted to increase prices on a per-channel basis if they have to negotiate directly with consumers. And while the Local Choice proposal would require channels to be provided to consumers at the same price within a particular market, it's still unlikely that you'd be paying the rate that cable companies currently do.

For consumers hoping for an unbundled future, this argument might come as something of a disappointment. For the broadcasters, appropriating the cable industry's rhetoric is purely rational.