[opendtv] Re: FCC Eliminates Simulcast Rules
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Fri, 17 Sep 2004 09:03:34 -0400
At 3:50 PM -0400 9/16/04, Manfredi, Albert E wrote:
>That's your opinion. The original purpose of the digital
>transition, ca. 1991, was to fit HDTV within 6 MHz. After
>1995, when SD and ED were incorporated, everything
>changed. HD was not mandatory, and what broadcasters
>could do with their bandwidth became an open question. As
>you well know, the FCC left a lot open to innovation by
>the broadcasters.
It is NOT my opinion. It IS a matter of record at the FCC. The FCC
has already ruled that cable systems will only be required to carry a
station's PRIMARY service when the station elects to move from analog
to digital must carry or re-transmission consent.
Broadcasters are complaining, and lobbying for carriage of their
entire multiplex, but this would require a change in FCC regulations.
The FCC did leave the door open for change by opening a "further
notice" of proposed rule making at the time the first decision was
announced. A ruling in the further notice has been anticipated for
some time now, but the current FCC doesn't want to touch this one.
Maybe next year after the election.
> > Retaining NTSC as long as possible protects broadcasters
>> from additional competition,
>
>Speculation. Maybe it also protects cable, DBS, and/or
>incumbent cellular operators from competition. It all
>depends on who these new users of the NTSC spetcrum
>would be. But the obvious reason for retaining NTSC is to
>retain their 18.9 percent AUDIENCE. The rest is just
>speculation on your part.
Not speculation,. It is a fact.
The playing field has been is tilted in favor of the broadcasters and
networks since the early days of radio and television. As we have
seen with the DTV decisions, the FCC is loath to admit they could
have screwed up. It is the natural tendency of regulators, who manage
the exclusive franchises granted by our government, to protect those
franchises. This is the legacy of the government/industry inspired
notion of "natural monopolies."
The spectrum "may" have nothing to do with it. The big winner could
be broadband. But for a new player to make major inroads, they would
need cooperation from the other players - especially the media
conglomerates who control the content. Or they would need a bunch of
highly qualified content producers to get fed up with the current
system and start producing content that would compete with the well
entrenched players.
>Again, your opinion. Motorola already claims $67 for ATSC
>stand-alone STBs by 2007. Perhaps they know something
>you're missing.
Perhaps they are just speculating about what "could" happen. If my
memory serves me properly, Motorola is on the record with the
position that we would have STBs that cost less than $200 by now;
they even designed chips to enable such a product, but they never
found a market for these chips. If you don;t believe me, maybe Frank
Eory will confirm.
>That's your choice. If OTA TV isn't enough for you, then
>you have a choice. But to claim that someone would pick
>a subscription service in order to avoid paying the $67
>or even $200 for an STB is rubbish. That would be the
>moron I was referring to.
Sorry, but I don't think that you can draw such an inference. It is
difficult to predict what people will do when they are forced to
change the status quo. And you continue to base your logic in terms
of the CURRENT competitive options. When this thing finally busts
loose, all bets are off. Everyone will be scrambling to capture
market share, and consumers may have several compelling options.
> > The point that I made yesterday, which you choose to
>> ignore, is that many people are not going to change
>> until some external stimulus forces the issue.
>
>Didn't ignore anything. The stimuli I listed were better
>OTA service than they get with NTSC, and even more, the
>shutdown of NTSC. And I also mentioned availability of
>high quality and low cost STBs, which are finally on the
>way.
First, what proof do you have that such boxes are on the way? Please
show me some press releases that support your position.
Next, explain why the broadcasters proposition is better than that
offered by multichannel competitors. It is quite possible that a
significant portion of consumers will believe that they must buy an
expensive new set to receive DTV broadcasts, while switching to the
most basic cable or DBS service will cost less than $20 per month,
for which they will get a bigger channel selection. Just look at the
misleading ads that the Cable and DBS services run. Whoops, I
forgot...you don't get to see this stuff.
And then there is another dirty little secret. What is the
correlation between the remaining 15% who do not subscribe to a
multichannel service, and AGE. COuld it be that the OTA audience is
dying? The average age of viewers of Network Evening News is close to
60.
>Perhaps so. But these guys have loads of content to
>choose from. And too, if this scheme proves successful,
>added costs might be worth the investment. With DTT,
>it's not like they have to fill dozens of channels.
>Just maybe one to three more than the main channel.
>How hard is that for them?
No problem if you just want retreads. But new original content that
is differentiated from all of the vertical niche channels that they
already program for cable is a reach. The total audience size is
finite. Dividing up a niche into two niches does not sound a big
profit center to me.
>But you're missing something. It's not just the networks
>that are unable to compete head to head with multichannel
>systems. It's also folks like Sinclair.
Sinclair is on the other side of the table. They would be a shadow of
what they are today with their affiliations with major networks. To
their credit, they are actually beginning to promote DTV in an
attempt to rebuild the OTA audience.
>
>According to FCC definitions, DBS companies can *each*
>have a national "reach" of 100 percent. And they do.
>Cable companies I don't know. You say maybe 30 percent
>reach for AT&T? But that 30 percent reach is for hundreds
>of channels, and there's not much to prevent them from
>increasing that reach. Yet, Sinclair cannot exceed 39
>percent, and they also have local restrictions to worry
>about too. Correct? So how is that fair to OTA?
DBS does not have 100% reach. Just ask Mark Schubin.
There are many homes/apartments that are unable to receive DBS
services. The reasons include terrain or building blocking, tree
blocking, etc. But you are correct, there are no regulations that
prevent them from reaching ANY home. Likewise, there are no
regulations that prevent cable from reaching 100% of U.S. homes - but
there are economic realities that make in unprofitable for cable to
serve the roughly 5% of U.S. homes that they do not attempt to serve
today.
Ironically, it is broadcasting that is unable to serve the largest
percentage of U.S. homes. This is simply a reflection of the market
based big stick approach. There are more than 3000 low power
transmitters that re-broadcast the signals from the core markets, but
this still does not allow broadcasters to reach everyone.
BUT...
Local broadcasters ARE protected via the regulations that require
cable and DBS to protect their markets. The truth is that cable
greatly extends the reach of OTA broadcasters in the suburban fringes
and rural areas. DBS must carry all broadcasters in a market if it
carries any, and they cannot provide national (east/west coast) feeds
unless the subscriber cannot receive local stations with an OUTDOOR
antenna.
DBS is moving closer to a market based service as it attempts to get
more cable customers to jump ship. They now offer local stations to
more that 60% of U.S. homes, and national feeds to another 5-10% who
live outside the areas served by broadcasters. And soon they will be
localizing more services such as the Weather Channel, and inserting
local commercials from the cache in your STB.
FINALLY. The broadcast networks DO HAVE the potential for 100% reach.
They are available to a high percentage of U.S. homes via OTA
broadcast. They reach 100% of cable homes and form the basis for the
low cost cable "lifeline" services. And they are available to more
than 60% of DBS subscribers, including 100% of those homes that
cannot access cable or OTA broadcasts.
What the networks do not currently enjoy is 100% of the revenues that
are generated by OTA broadcasting.
>
>You favor a system with more regulation to fix this.
>I don't think that's the only way given the way OTA
>systems work. Because multiple OTA networks can coexist
>in one location, ensuring lots of competition. But we
>have been over this too many times. My only point was
>that Washingotn's regs do *not* favor terrestrial
>broadcasters to the extent you keep claiming.
Actually my system requires far less regulation since it is market
based. The only regulation is that you cannot control both the
content and the pipe. There is an excellent example of this that has
been working for nearly a century...it's called the telephone.
>
>> A small percentage of the audience still watches local
>> programming - i.e. local news. The networks only care
>> about profits.
>
>As do the cable and DBS providers. And that means cutting
>down on overhead, for all these systems. So if you rail
>against one, then you must rail against the rest.
Uhhh...cable and DBS have invested more than $100 billion to go
digital. That does not sound like cutting down on overhead to me. For
the most part, cable is a distribution system, not a content
producing entity. The FCC and politicians forced the decoupling of
cable content and carriage in the 80's, (based on ownership). But the
cable systems still have the choice of what to carry, with "some"
input from their subscribers. The cable content industry grew because
the cable moguls invested in networks like CNN, The Weather Channel,
etc, losing money for years before the networks became profitable.
Look at Time Warner, which is NOT in the broadcast business.
But those days are long gone. Time Warner is still in the game, but
almost all of the remaining cable networks have been created or
acquired by ABC, CBS, NBC and Fox. There are still a handful of
independent cable networks, like those owned by Scripps Howard, and
the shopping channels, but they represent only 10% of the audience.
The only parallel that you can draw to the big media conglomerates is
that there has been significant consolidation of the cable industry
with a handful of MSOs controlling the most profitable systems.
>
>> No. The rising costs dilemma is a canard. It
>> is simply a reflection of the HUGE amount of many
>> that is being generated by entertainment television.
>
>> Costs will rise in proportion to revenues.
>
>And revenues rise in proportion to viewers willing
>to pay.
Until the bubble bursts. Consumers are beginning to fight back
against ever increasing subscriber fees. I am upset by my huge
utility bills, but my only option is to buy a bunch of generators
that would cost even more to operate. For many people, cable is just
another necessary utility, like electric and phone.
>
>New flash, Craig. These dollars are all perfectly fair
>game. Do you watch sports? Yes? Is it an expense you
>can avoid? Yes. Are you being coerced? No.
I am MUCH more selective about the sports I watch. Not many years ago
I watched at least 2-3 pro football games a week. Now I hardly ever
watch. I used to watch a lot of Braves baseball -but I have not
watched one game this season. All of this tends to be cyclic.
The question is NOT whether people want to watch this stuff. The
question is how did we get to the point where the government is
propping up a bunch of monopolies so that they can make sometimes
obscene profits?
Bottom line, TV is the Soma described in Huxley's "Brave New World."
>
>The demand creates the cash. People demanding expensive
>cable packages for more sports are what is driving up
>the price of these mercenaries. It's not the other way
>around, as you seem to think. The huge DEMAND came
>first, not the huge profits.
Let's just call it a vicious spiral. Drug addicts like to support their habbit.
>
>> Uhhhh. They could just say NO!
>
>Indeed. So can you, but you don't.
Actually Bert, I do.
Regards
Craig
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