[opendtv] Re: 20050509 Mark's Monday Memo
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 1 Jun 2005 10:13:59 -0400
At 11:45 AM -0400 5/31/05, Manfredi, Albert E wrote:
>Okay, so you argue that back then, a monopoly was
>essential to create the infrastructure of this
>"utility," but that now this is no longer the case.
>
>Which is what I'm also arguing. For terrestrial OTA
>television, you don't need a monopoly to provide the
>infrastucture. Not saying it CAN'T be done that way,
>just saying that there are better alternatives.
I have yet to see you propose one that does not retain the
broadcaster as gatekeeper. I would note that cable and DBS also are
gatekeepers. This is the downside of relying upon regulated
monopolies as opposed to market forces.
> > 2. Creation of a real market for use of the
>> infrastructure - The utility should have little
>> if ANY say in the pricing structure. This is for
>> the marketplace and regulators to decide.
>
>Regulators? So this is a step in the wrong
>direction. Having to depend on regulators is
>something you do when there are no better
>alternatives, not something you do when plain old
>competition can do a better job.
I generally favor the marketplace and a hands off approach with
respect to regulation. But we are talking about a scarce public
resource here, and markets can be distorted by the actions of a few
powerful companies, as we see today with the big media congloms.
The kind of regulation I am talking about is intended to prevent
powerful companies from controlling the market, especially in large,
profitable markets. In essence I am talking about caps on the
percentage of available bits that any one entity could control. This
could be set via legislation, without the need for a regulator to
micro manage the "market."
>I guess you really don't believe in free enterprise
>working, then. Broadcasters, and the conglomerates
>that own stations, can certainly do a better job of
>providing TV for the smaller markets than cable TV
>companies can, simply because their infrastructure
>costs are far lower per household served. However,
>the govt can always play a role here, with tax
>incentives.
I'm not certain that you can back up your claims. But we have never
had an apples and apples situation to compare. Broadcasters don't
offer the programming choice than most consumers want today. Clearly
they could, but they don't. The profitability of broadcasters is
small markets is often marginal.
If broadcasters wanted to pool spectrum in small markets and create a
cable competitor, I suspect that they could do it cheaper that cable.
But it is easier to let cable do it and to get carriage on the cable
system. One major rub here is that broadcasters would need to get a
large percentage of cable subscribers to switch. It would not be
profitable if they only got say 10% to subscribe. They could get a
much larger audience if the service was free, but then they would
have to rely on local ad dollars to pay for the infrastructure and
operational expenses. In small markets this is not all that
attractive. This is a major reason why it makes sense to let a
regional service provider do the cost shifting so that the smaller
markets get he same level of service as the large markets.
There is no free enterprise, when all of the market players rely on
government regulation to charge significantly more than the service
is worth, as is the case today.
Sooner or later, a bypass technology comes along and upsets the
applecart. This is why the TV industry is so concerned about
broadband and the Internet.
Regards
Craig
Regards
Craig
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