[opendtv] Re: Broadcasters vs. MVPDs: Economic effects of digital transition on television program supply
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Thu, 14 Jan 2010 07:54:35 -0500
At 2:51 PM -0500 1/13/10, Tom Barry wrote:
Yes, obviously there is not much competition and the MVPDs seem to be
able to get away with a lot right now. It reminds me of the old Ma Bell
monopoly where the government had to do a bit of saber rattling to
correct things. We will likely have to re-regulate cable eventually.
Uhhhh Tom...
The current situation came into being BECAUSE the politicians decided
to re-regulate the cable industry in 1992, AND because they gave
broadcasters retransmission consent as part of that deal.
And with all of the sabre rattling, look at what has happened to the
telco industry. Instead of Ma Bell we have a variety of wireline
services that are fading into oblivion, an oligopoly for broadband,
and another oligopoly for wireless. Once again they are bundling
equipment and service with contracts that inhibit portability. And
the future of the wireless oligopoly is assured as they have gobbled
up every MHz of available spectrum.
Next up: government regulation of the Internet.
Hopefully the FCC will get a hint and strongly suggest that the lifeline
basic cheapest tier remains on clear QAM. But there are no guarantees.
And what happens when a broadcasters and an MVPD come to terms on
retransmission consent fees?
The MVPD is now paying for that content and needs to collect money
from subscribers to pay the broadcaster. Seems like this forms the
basis for a good argument that the MVPD must now encrypt the
broadcaster's content to assure they are getting paid for it, or that
the cost of the lifeline tier is going to need to reflect these
retrans fees.
Cable still has a problem with signal theft, due in large part to the
fact that most homes have been wired at one time or another, and it
is relatively easy to tap into their analog networks. Encryption
solves this problem. And the DBS services have had their fair share
of problems with illegal conditional access cards.
I would expect to see the analog tiers disappear in the next 3-5
years as cheap digital adapters flood the market.
And, yes, at todays needed speeds for broadband video only FIOS offers
cable broadband any competition. Even if home consumers are losing
interest in land line phones the cable broadband/TV double play offers
something satellite TV can't compete with, so we need multiple cable
companies and FIOS. But I think FIOS only passes about %22 percent of
USA homes so far, not including mine.
DBS could stay in the game if they can re-use their spectrum for
terrestrial broadband networks.
Thyis would be an expensive proposition but is technically feasible.
OR as an alternative they could partner with entities that want to
build out broadband networks in the TV white spaces.
Speaking of which, I think we can expect the FCC to leave the
question of giving back spectrum in the hands of the broadcasters.
That is, we won't take it from you, but we will encourage you to sell
it to broadband providers if you want to cash out of the broadcast
business. And I expect that the FCC will tell broadcasters that they
must allow others to build out the white spaces if they want to keep
their 6 MHz channels and big sticks.
Regards
Craig
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