[opendtv] Re: FCC's spectrum plan gives broadcasters food for thought
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Fri, 2 Jul 2010 07:39:59 -0400
At 5:50 PM -0500 7/1/10, Manfredi, Albert E wrote:
Craig Birkmaier wrote:
The only reason that broadcasters "appear" to have limited spectrum is
that they wanted it this way. They WANTED to limit choice.
Not true. Take the days prior to cable. Maybe the existing
broadcasters at the time didn't want more competition, but obviously
there were newcomers that did want in. That's why UHF started, for
example.
Sorry Bert. But this is true.
Yes, in larger markets independents have been able to survive on a
few table scraps, but few if any create any content; they simply
survive on retreads and movies. Thanks to the proliferation of UHF
channels the necessary infrastructure was in place to support the
addition of the Fox Network and a bit later the CW and My Network
TV. Fox managed to grow to rival the big three. The others have
struggled at best.
The opportunity existed when the FCC opened the proceedings for what
became the DTV transition to ask for the ability to compete with the
rapidly growing Cable industry. Instead, the NAB and major
broadcasters chose to tie up the spectrum with HD, rather than
developing a new infrastructure that could have offered at least 30
channels in every market including a few HD offerings.
THIS is fact.
The reason that the MVPDs appear to have so much more spectrum is that
they invested in the infrastructure to offer MUCH MORE choice than
broadcasters.
Not true. Cable systems have continuous coverage, from 54 MHz to 900
MHz, because they do not need to share with anyone else (like
taxicabs and airports) and they do not need to worry about
interference zones caused by spatial distribution of markets. So
yes, they had to invest on laying cable, which is why you should
gladly pay those monthly fees. But OTA broadcasters wouldn't have
that same luxury anyway. OTA means sharing the medium with other RF
wireless devices and other RF transmitter sites.
This is only true TODAY, because the cable industry spent about $80
BILLION in two major upgrades of their infrastructure in the '80s and
'90s.
From the NCTA website:
http://www.ncta.com/About/About/HistoryofCableTelevision.aspx
Deregulation provided by the 1984 Act had a strong positive effect on
the rapid growth of cable services. From 1984 through 1992, the
industry spent more than $15 billion on the wiring of America, and
billions more on program development. This was the largest private
construction project since World War II.
AND
Also during the latter half of the decade, cable operating companies
commenced a major upgrade of their distribution networks, investing
$65 billion between 1996 and 2002 to build higher capacity hybrid
networks of fiber optic and coaxial cable. These "broadband" networks
can provide multichannel video, two-way voice, high-speed Internet
access, and high definition and advanced digital video services all
on a single wire into the home.
Nobody is saying that broadcasters could compete with 500 channels
and Internet access. But THEY COULD have countered the growth of
cable by investing in new infrastructure and content.
THEY DID NOT, choosing instead to leverage the investments being made
by the cable industry, and later the DBS industry.
These are physical facts, Craig. They can't be misinterpreted in a
credible way, for politically-motivated arguments. At least, not to
engineers.
And the above are ECONOMIC FACTS Bert.
Broadcasters CHOSE a path to irrelevance, and have spent the past
three decades milking their protected franchise while making the
minimal investment to keep it going. The entire cost to stations for
the DTV transition was less than $3 Billion, and this includes major
production upgrades, not just the transmitters and towers.
Broadcasters COULD have developed a digital infrastructure that
offered FAR MORE choice that the ATSC system can deliver.
An example of going back to old false assumptions that cause you to
draw false conclusions. Yes, there WOULD be a way for OTA
broadcasting to be more spectrally efficient. It is called REGIONAL
BROADCASTING. If you don't accept regional broadcasting, then you
have no argument. (By the way, I have no objection to regional or
national nets, which is why I support elimination of the national
cap. And looking into DVB-T2.)
Not false assumptions. There is adequate spectrum to use at least
half of the available channels in every market. Geographically
isolated markets could offer even more channels.
But this cannot be done with the ATSC Big Stick infrastructure. It
could have been done by investing in a new more spectrally efficient
infrastructure using SFNs. End of Story.
Still, we have single-market TV here. So, when ATSC managed to offer
25 programs in this market, with easy room for 40 or more total,
with the existing spectrum allocations, the FCC took only a few
months to threaten to yank it away.
You are making my point.
The problem is not that broadcasters offer a threat - they decided NOT to
compete with cable and DBS, but rather to take advantage of that investment,
Yes, that argument, that you have presented many times, I can agree
with. But I wasn't making the point that broadcasters are seeing
MVPDs as a threat to them, Craig.
The threat to broadcasters is that they are losing the most important
content franchises as the population has moved on to paying for
content. It is the content oligopolies that decided to pull the plug
on FOTA broadcasting back in the '80s, using their tight relationship
with the politicians to flatten out the product life cycle curve for
broadcasters so they could milk the franchise until it is no longer
economically viable - we are rapidly approaching that point, which
will likely happen some time during this decade.
I was making the point that MVPDs see OTA broadcasting as
"cheating," because OTA broadcasters don't have to pay as much for
the infrastructure they use. To me, the consumer, that just sounds
like an excess of greed. FOTA has existed since day 1, exists in all
developed nations, and certainly in this country, it is no threat to
MVPDs. Therefore, MVPDs can relax.
MVPDs rightfully are concerned about collecting subscriber fees for
what is supposed to be a FREE OTA service. But this is mostly just
posturing, as the steady increase in the cost of content has allowed
them to increase the cost of MVPD service at a rate far higher than
inflation.
What the MVPDs are growing concerned about is that so much money is
on the table now that it is becoming possible to offer economically
attractive alternatives to cable. And when this happens, the content
oligopoly can cut out almost all of the middlemen.
Broadcasters are only a competitive issue today in terms of selling
local commercial inventories. And cable has a very strong technical
and economic advantage in this area, which is why money is moving
from local broadcasters to the companies that insert ads in cable
programming.
The complaints about FOTA are based primarily on the tremendous waste of a
very valuable public resource
Personally, I think the Grand Canyon is a tremedous waste of a
precious resource, because I want to build condos there and they
won't let me. Waaa waaa.
Personally I think you are secretly working for the NAB.
Regards
Craig
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