[opendtv] Re: 20050509 Mark's Monday Memo
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 4 Jun 2005 09:48:52 -0400
At 4:13 PM -0400 6/3/05, Manfredi, Albert E wrote:
>The telephone system will handily reject new users
>if its bandwidth is in short supply. If RF
>bandwidth is in short supply today in OTA TV, it
>will continue to be in short supply no matter who
>manages it.
What kind of an absurd response is this?
The ability (or inability) to provide service at any location is
completely irrelevant to this discussion. The only thing that is
relevant is whether the telco imposes restrictions on what you can do
with the bandwidth they provide when service IS established.
When dealing with a telco, you buy connections and bandwidth. That's it!
What you do with those connections and bandwidth is for the most part
unregulated. About the only exception I can think of is the National
Do Not Call Registry, which places limits on the ability of certain
users to pester the hell out of other users.
None of this has any relationship to a discussion about a digital
broadcast spectrum utility. With one-way broadcasts the consumer
determines what content they want to receive. Unfortunately , with
the current system the consumer has little say in what is broadcast
(other than the influence of TV and radio ratings).
Obviously there are supply considerations at work with the spectrum,
just as is the case for any "scarce resource." This is the classic
basis for the way in which REAL markets allocate scarce resources -
i.e. supply and demand.
With TV and radio broadcasting supply and demand are virtually
meaningless. Competition is carefully controlled, and supply is
controlled by gatekeepers, not the consumer. This is true for
television, radio, movies, music and professional sports. All of
these industries operate as oligopolies, not real markets.
>
>With DTT, and analog off the air, the situation
>improves. But unless you have an oversupply of
>bandwidth, applicants will get bumped. This is true
>whether you have one gatekeeper as you prefer, or
>multiple gatekeepers as we have today.
And it is true for REAL markets, where there are no gatekeepers. If
supply is limited, then the price typically is bid up. What we are
dealing with in this case however is very different that what exists
today. In truth, supply is artificially limited today: by the
oligopolies; by regulators; and by technology decisions.
Every day we see potential competitors hitting the wall. the radio
broadcasters have successfully fended off competition from low power
FM using unfounded arguments about potential interference. The telcos
are running into walls as they try to get into the video distribution
business, including the reluctance of local governments to grant them
franchises to compete with cable, and the inability to buy content
for their systems at any rate, much less the "market rates" being
paid by cable and DBS. And the TV broadcasters are tying up vast
chunks of spectrum for a service that is only used by a small
percentage of the population and a new service - which they refuse to
promote- that is used by such a tiny portion of the population as to
be statistically unmeasurable.
NO BERT. We are not suffering from a shortage in bandwidth. We are
suffering from a shortage of imagination and innovation, as
entrenched players seek to protect the artificial scarcity they have
created via techno-political gerrymandering. Keep in mind that this
is happening as new technologies that turn our historic notions about
scarcity into a new problem - what to do about abundance?
>You acknowledged that "prime time" will continue
>to exist whether you have a single utility or many
>different ones. Good. But btw, peak usage affects
>the Internet as it does any other net. There is
>congestion at different times of day in different
>locations of the network, which is only resolved by
>over-provisioning. With a wired Internet, over
>provisioning is possible, limited only by capital
>expenditure. With RF, there are more limitations
>than just $.
True. That's why a market based approach will work. Content providers
will pay a premium to reach an audience. This may be "prime time" for
for program length entertainment television, "Drive Time" for radio
services, and "business hours" for data services. At other times
bandwidth will be in "over-supply," which will allow smaller content
providers to have access at off peak rates - WITHOUT HAVING TO GO
THOUGH A GATKEEPER WHO DOES NOT WANT THE COMPETITION THAT THEY
REPRESENT.
>The issue about TV stations broadcasting signals
>for non-real-time download is orthogonal to this
>discussion. Of *course* they can do this, whether
>there's one central gatekeeper or many different
>ones. Broadcasters will make use of this capability
>if they can conquer the copy protection paranoia.
>And this is true no matter who manages the spectrum.
The "copy protection paranoia" is just another WALL that the
oligopolies have erected to prevent competition. It is a non issue,
as has been proven by Apple with music, and others.
Non-real-time download is a huge threat to the existing business
model of television. It can turn non-productive bandwidth into
competition for the most productive bandwidth, just as the VCR, DVDs,
video games and the Internet have eaten into the audience for prime
time TV.
It is CENTRAL to this discussion, not orthogonal. And it extends well
beyond traditional TV programming. The ability to keep local caches
updated in a wide range of devices for both fixed locations and
things that move is going to be a HUGE business. Just look at the
traction of Podcasts during the past year. Yesterday Rush was hawking
the fact that his subscribers can now receive Podcasts.
Perhaps an analogy is appropriate here.
Printed media has been and will continue to be a major form of
communications. Books and magazines are sold WITHOUT the notion that
they are going to be consumed at a specific time; while newspapers
are often consumed during specific time periods after publication,
most notably by commuters. Why should linear entertainment content
be any different, unless it is being presented LIVE?
We buy books and magazines based on personal interests. We are now
moving into an era of digital media content that is targeted to
specific interests. The notion of sitting down at a pre-determined
time to watch a TV program is becoming much less meaningful,
especially for pre-produced content. And the notion that we must
settle for whatever is on at a given time is giving way to the notion
that we will have content we want to watch queued up in local cache
for consumption when we want to watch it.
Broadcasters fear this capability, because they are in another
business - trying to aggregate the largest possible audience at any
moment in time.
They might as well be selling buggy whips.
>
>But you specifically said previously that the
>rates would be REGULATED by some central
>authority. Matter of fact, that was your
>explanation for how starving artists would get
>access.
I NEVER said that the rates would be regulated by anyone. They would
be regulated by the marketplace.
I did say that there is a role for regulation in preventing a few
major players from dominating the new marketplace. That in markets
where there is strong demand we might place caps on the total
percentage of bandwidth that any one entity could program at a given
point in time. But this would be written into the legislation, and
would not need any regulators to manage on a daily basis. The
spectrum utility would manage this, placing these limits on users
when demand exceeds supply.
I suspect that as a transitional element of the plan that existing
broadcasters would be guaranteed access (at market rates) to the
system. But this is a no brainer, as these are the folks most likely
to use the system.
>Besides which, the multiple gatekeepers aren't
>stupid. They too understand what it means to rent
>out space, and they do this TODAY, as we already
>discussed. There's no reason to assume that
>broadcasters won't rent out spectrum in the
>future.
History suggest that you are wrong about this. They limit competition
today and will continue to do so as long as they can.
>
>> With a well thought out spectrum policy driven
>> by the marketplace we would not need the FCC.
>
>Oh come now. Let's not go in circles. The FCC is
>the same as your spectrum management bureaucracy,
>except they allow multiple gatekeepers. You're
>just changing the name of the same function.
Sorry Bert, but you are missing the point. There are many who feel
the FCC is useless today doing what they do. With a real marketplace
there would be no need for the FCC. There is no ongoing need for
regulation. Of course, this will not stop the Congress critters from
holding hearings to extort their pounds of flesh...
>
>> And I am not sure what makes you think that
>> with DTT there will be more spectrum available.
>
>Because the tabboo restrictions are relaxed and
>because you can fit more streams in each 6 MHz
>band. The result is, more programs can be aired
>in the TV OTA spectrum than can be done with
>analog.
DUH.
So you would think that the broadcasters would be rushing out to fill
up all those channels...RIGHT?
But that is NOT happening, which provides compelling evidence to
support my case.
>
>> The current system may look like there are many
>> gatekeepers, but the reality is that they act
>> as a TRUST,
>
>With more 6 MHz bands available, and the local
>ownership caps retained, this will be less true.
>And by the way, the popular content will also
>take up your centrally-planned utility concept,
>shutting out starving artists, assuming you're
>being truthful about your claim of "market
>driven." In fact, the same "trust" will evolve,
>where popular bits crowd out newcomers.
There is no evidence that there will be more 6 MHz bands available.
The taboo channel situation does not improve, and the core spectrum
is significantly reduced. You just refuse to listen.
The utility concept changes the fundamentals of the infrastructure,
which is how we can achieve higher levels of spectral reuse.
As for the trust surviving in the face of real competition? There is
no way to know until we try. It IS clear that the entrenched players
start out with a major advantage. As is the case in any market, the
stuff that is popular is likely to be the most rewarding
economically. But the market really has fragmented, and the ability
to aggregate a huge audience is not as easy as it once was.
I refuse to base arguments about the future on what has worked in the
past. I prefer to knock down the barriers to real competition and see
how the marketplace responds.
>
>> But the reality is that the TV service is dying;
>> it does not enjoy broad popular support.
>
>In Europe, all it took was the freeview concept
>to reinvigorate it. You can do the same here, even
>without the central planning. If it dies, it dies.
>Marxism won't be what saves it. If OTA dies, it's
>because of the "more is more" culture we live in,
>which will keep people on cable even with your
>centrally planned bureaucracy. At which point,
>reassign the remaining TV spectrum to other uses.
We cannot do the same here without changing the entire business
model. I agree that a Freeview approach could work here. But the
content oligopolies will resist this because it will undermine their
ability to keep charging ever higher subscription fees for the
content that they want us to see. They do not want real competition,
and they do not care if OTA broadcasting survives in the long haul.
What they want is to control supply and charge as much as they can
for each use of their content.
Regards
Craig
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