[opendtv] News: Those licenses will soon be worthless...

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 20 Apr 2005 12:35:37 -0400

Monday morning I attended the Congressional Breakfast here at NAB. A 
report on this session from Broadcasting and Cable follows. 
Unfortunately it does not relate the context of the dialog that took 
place, and it is highly misleading in terms of the potential impact 
on broadcasters.

To be certain, the House, under Barton's leadership is trying to 
apply pressure on broadcasters to get the DTV transition moving. 
Unfortunately the Senate does not share Barton's passion, nor do most 
of the members of Congress who were on the panel, or the broadcasters 
in the audience. What Barton is doing is little more than the normal 
sabre rattling that takes place prior to the long dance towards new 
legislation, designed to extract a few pounds of flesh from the 
industries that Congress and the FCC regulate.

Bottom line, broadcasters still seek to extend the protection that 
they have become reliant upon to stay profitable. It is HIGHLY 
unlikely that a date certain deadline can survive an arduous trip 
through the Senate and the joint conference process. If anything 
happens regarding the DTV transition, it is likely to be part of the 
multi-industry shakedown that will take place next year when the 
Telecommunications Act of 1934 is re-written...again.

Barton has now lowered the bar again on the cost of subsidized 
set-top boxes, now claiming that they will cost between $35 and $50. 
I can assure you that there is NOTHING happening here at NAB to 
support this unrealistic assumption. Set-top boxes are evolving 
rapidly...away from the dated ATSC platform limitations. 
Broadcasters complained about the lack of Congressional action to 
accelerate the requirement to make all TVs include an ATSC tuner. 
This is entirely consistent with the attitude that the broadcast 
business must be protected at all cost, despite the lack of support 
from both consumers and manufacturers.

Tuesday morning the tables were turned as Eddie Fritts found himself 
playing the role of Sam Donaldson, in a replacement event for the FCC 
chairmen's breakfast. Donaldson was to interview Fritts and FCC 
Chairman Martin, but Martin could not make it to NAB due to the death 
of his Father last Friday. So Fritts found himself grilling 
Donaldson, Jeff Greenfield and Charles Osgood.

The session turned out to be quite interesting, and I suspect Fritts 
was not thrilled with the frankness of the responses of these 
industry insiders. One could only conclude that the business model of 
broadcasting is dying. Greenfield questioned whether the advertiser 
supported business model is sustainable in the face of VOD and 
Tivo's, admitting that he finds the ability to watch a one hour 
program in 40 minutes quite compelling. But Donaldson dropped the 
real bomb.

Fritts asked each of these industry vets to identify an issue that 
should scare the hell out of the broadcasters in the audience. 
Greenfield cited VOD and the PVR. Donaldson talked about the value of 
a broadcasters license. Stating that it might not happen tomorrow, or 
the day after, Donaldson warned that a license to broadcast would 
soon be WORTHLESS! Citing all of the distribution technologies that 
are beginning to bypass the broadcast gatekeeper model, and 
broadcasters reliance on cable and DBS for distribution, he warned 
that these licenses will soon be worthless pieces of paper.  If local 
broadcasters do not focus on creating content, they will be 
irrelevant.

Walking around the show floor it is not uncommon to see people 
engaged in conversations about the future role of broadcasters. Most 
believe the patient is dying and wonder when the"feeding tube" will 
be pulled. Chariman Barton is ready.

Another fact of life that is evident here in Vegas, is the toll that 
continuing industry consolidation is taking. The mating of dinosaurs 
is accelerating. In my 27 years attending NAB, I have never seen so 
many high level people forced to find new jobs, or so many people who 
are leaving an industry that they believe has no future.

On the other hand, NAB (the show) has never been so vibrant. 
Attendance is up - considerably - and vendors are reporting robust 
sales. Those broadcasters who can afford to show up are walking 
around dumbfounded, trying to figure out why they are becoming 
irrelevant as the television industry moves from a "baseband" to an 
IT infrastructure.

Regards
Craig



http://www.broadcastingcable.com/article/CA525792.html?display=Breaking+News&referral=SUPP

Barton Readies Hard-Date Bill

by Bill McConnell -- Broadcasting & Cable, 4/18/2005 1:20:00 PM

  House Commerce Committee chairman Joe Barton (R-Texas) told 
broadcasters Monday that his digital-television-transition 
legislation will be ready in two or three weeks.

  Barton said that the bill will definitely contain a "hard" deadline 
for cutting off old analog TV signals and making stations operate 
digital-only.

  Still under discussion with other committee members is a possible 
provision that would expand broadcasters' digital cable carriage 
rights.

  With apologies to broadcasters, Barton said he still favors a Dec. 
31, 2006 deadline, but conceded he's willing to compromise with other 
members who want to give stations more time. Some in congress have 
said the cut-off could be the new third rail of politics if too many 
people are potentially disenfranchised.

Barton, however, ruled out extending the deadline as far out as 2009, 
as suggested by New York Democratic Congressman Eliot Engle.

  "If we go a little later than 2006, I'm OK with that, "Barton said. 
"But I don't mean three years" Barton and Engle made their comments 
during a breakfast panel at the NAB's annual convention in Las Vegas.

  Other participants included House Telecommunications Subcommittee 
Chairman Fred Upton and House Judiciary Committee Chairman Jim 
Sensenbrenner.

  The session was moderated by ABC News' Sam Donaldson. Barton said he 
continues to support using some proceeds from auctioning reclaimed 
analog spectrum to provide a subsidy to low-income people that would 
cover the cost of converter boxes needed to keep old analog sets 
working in the all-digital world. He said the cost of the boxes could 
be as low as $35 a piece. Previous estimates pegged the low-end price 
tag at $50 a box.

Teasing Donaldson, Barton said Congress might instead choose to pay 
for the subsidy by raiding the ABC pension. "We're going to name it 
the Sam Donaldson set top box. You are going to go out in a blaze of 
glory."
 
 
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