[opendtv] Re: Broadcasters Lobby FCC for Cross-Ownership and Duopolies

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sat, 24 Jul 2010 11:42:14 -0400

But the FCC can't hide its head in the sand either. The reality of today is that the vast majority of people use these MVPDs for news and entertainment, rather than OTA broadcast networks. Therefore, given this fact of life, it is uncalled for to put what amounts to destructive limitations ONLY on the FOTA broadcasters. And to use what amounts to irrelevant rhetoric to support their position. 

How are these caps destructive?
Near as I can tell the broadcast networks are THE ONLY services that reach nearly 100% of U.S. homes.
Allowing the media congloms to own all of their affiliated stations would not change what people see. It would take some profits from the local markets and send them to the congloms. And it would eliminate thousands of jobs in what is left of the broadcast industry. 

I'm not sure how this benefits anyone but the congloms.
Realities matter too. The FCC is grabbing spectrum from broadcasters using "reality of today" as the excuse. Therefore, we must conclude that the FCC understands the concept of reality of the marketplace. Rules for OTA pipes must be modernized.
But okay, if need be, let's see them putting 39 percent national caps on DBS. We'll start there. 

How would you cap this?
Allow them to only sell the service to up to 39% of U.S. homes on a geographic basis, as is the case with the broadcast caps? This would require the addition of a third DBS system, as two geographically capped services would only be able to reach 78% of U.S. homes. Keep in mind that the broadcast networks reach nearly 100% of U.S. homes; they are only restricted in how they reach those homes (primarily the level of financial participation), whether it is FOTA, cable or DBS.
Place a 39% cap on the number of U.S. homes they can reach. If this is the case, they would LOVE to have that problem, as together, DirecTV and Dish serve less that 30% of U.S. homes.
The FCC is facing a very real problem. Allocation of a scarce resource for the highest economic use of that resource. At BEST, TV broadcasting generates enough revenue for the government to cover its regulatory costs. And the economic benefit to society is difficult to measure, given the reality that the TV broadcast service is only used by a small percentage of the population.
It is the responsibility of the politicians and regulators to manage these resources in the public interest. Virtually every economic study I have seen says that there are more productive uses for this spectrum. I don't think that keeping the population entertained is a compelling use of this resource, when nearly 90% of the population DOES NOT use the service. 

Regards
Craig



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