[opendtv] Re: 20050509 Mark's Monday Memo
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Fri, 3 Jun 2005 09:58:36 -0400
At 12:27 PM -0400 6/1/05, Manfredi, Albert E wrote:
>It's all a matter of perspective. In practice, there is
>no clear advantage with your proposal, but there are
>drawbacks. Here are two ways to look at it:
Agreed that it is a matter of perspective. But I am totally in
DISagreement with you about the notion that there is no perceived
advantage in what I am proposing.
>
>1. Your "utility" would become the gatekeeper, Whether
>they set the fees, or whether they use other criteria
>to allow access, they will accept or reject applicants
>for bandwidth. Bandwidth will be limited for the same
>reasons it is now. Physics. No, you don't get to
>violate any laws with the "utility" concept.
No, the utility would have no say in what content makes it onto the
system, just as is the case today for the telephone system. It's not
quite common carriage, just as the Internet is not common carriage.
But if you are willing to pay market rates, you can distribute your
content via the Internet simply by getting a domain and a server.
Likewise, if you are willing to pay market rates, the spectrum
utility will deliver your bits.
The Internet has little notion of "time" as we think of it in
broadcast terms; there are peak usage periods, but the global nature
of the net distributes these peaks across time and location.
Because of the "local" nature of broadcasting, the spectrum has more
or less value based on the time of day, which is directly related to
usage patterns. TV has prime time; radio has drive time. This will
not change with a spectrum utility, however, there will be new
services competing in some time periods, and the off-peak time
periods will become more valuable (thanks to local caching),
providing lower cost access for content providers who don't want to
pay peak rates to deliver their bits.
I also agree that bandwidth is limited, as are any resources for
which the value is set by the marketplace. THIS is the major reason
that the spectrum utility offers a clear advantage, as it uses the
marketplace to establish the rates for access to the system at ANY
moment in time.
The system we have today does a poor job of providing
access...because the spectrum is controlled by gatkeepers who have NO
REASON to provide access to competitors.
>
>2. The "utility" is the spectrum the FCC assigns to TV.
>Therefore, with DTT, more entities can get a 6 MHz slice.
>So that's the "utility," and the FCC is the manager. And
>yes, there will be multiple gatekeepers.
With a well thought out spectrum policy driven by the marketplace we
would not need the FCC. There are many who question the value of the
FCC today, even with the current system where the government
regulates spectrum users. As we have seen in recent years, the FCC is
powerless to establish spectrum policy. This power is reserved for
the legislative branch, and the courts keep turning back almost every
attempt by the FCC to establish rules that have not been authorized
via legislation.
And I am not sure what makes you think that with DTT there will be
more spectrum available.
It has already been established by the legislative branch that the
spectrum assigned to TV broadcasting will be significantly reduced
after the transition. It is unlikely that much of the spectrum that
will be re-allocated will be used for TV services, although if the
spectrum is auctioned, the government will have little if any say in
what it will be used for.
No new licenses are being issued in the core spectrum, and it is way
too early to tell what the interference issues will be when all DTT
stations operate at full power. What we do know is that the current
method of allocating channels that can be operated at high power
levels will necessarily restrict the number of new channels available
because this philosophy perpetuates the poor spectrum efficiency that
exists today with NTSC. We will continue to waste about half of the
spectrum in congested areas because of the use of high powered big
sticks.
>I've made these points on numerous occasions, so I have
>in fact already responded to your question on
>gatekeepers. In short, better have many rather than just
>one, better let them compete against each other rather
>than create another bureaucracy.
You continue to miss the point Bert. The current system may look like
there are many gatekeepers, but the reality is that they act as a
TRUST, protecting each other from meaningful competition. This might
be acceptable, IF the service using the spectrum was heavily
utilized, and had strong popular support. But the reality is that the
TV service is dying; it does not enjoy broad popular support.
How much support for improvements to the Interstate Highway system
would there be if only 15% of the people in this country used it?
>What about oil? Should we go back to regulating oil
>production and prices?
Go back?
Please tell me when the government ever did this.
The only control that the government has over oil production is
related to leases for exploration on public lands. In this, there are
parallels to the public spectrum. But the companies that take oil
out of public lands pay lease fees to do so. There is at least a
modicum of competition at work when the rates for these leases are
set.
> I think that the best the govt can
>do here is shut down analog, thereby increasing
>availability of spectrum to newcomers, and *keep* the
>existing local ownership caps. This achieves the same
>goals as your utility without the socialist flavor.
There is nothing socialist about the spectrum utility concept. It
takes a resource that is currently allocated to privileged companies
that are subject to intense government regulation. Now that sounds a
bit socialist to me.
Letting the marketplace decide the best use of the spectrum resources
rather than the regulators is a capitalistic approach. And again,
there is little indication that there will be more spectrum available
after the transition, not to mention that newcomers would have little
reason to use a system that does not work well and cannot support
many of the services that could be operating in this spectrum.
>
>> If broadcasters wanted to pool spectrum in small
>> markets and create a cable competitor, I suspect that
>> they could do it cheaper that cable.
>
>In very small markets there is no cable competitor at
>all. There is DBS or OTA. And again, if the govt sees a
>need, they can give broadcasters tax incentives to
>operate in such rural markets. This is preferable to
>an artificial "utility" structure.
Cable has far better reach than broadcasters in the U.S. It is far
more likely that there will be cable in a small market than OTA TV.
And cable is an artificial utility structure; one that local
governments love to regulate as a source of revenue. Local
governments don't get a nickel from broadcasters other than the
property taxes that ANY business would pay. Local goivernment are mad
as hell about DBS, because they cannot control the competition with
cable or tax DBS subscribers as they do cable subscribers.
>
>> 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.
>
>This is irrelevant to the discussion here. Depending on
>copy protection technology and laws, the "bypass
>technology" you talk about could threaten your OTA
>"utility" concept, as it threatens cable, DBS, telco
>IPTV systems, rental businesses, and advertizing
>businesses. So I'm not sure what point you're trying to
>make.
The local spectrum utility would function as an edge network,
extending the reach and functionality of the Internet.
Regards
Craig
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