[opendtv] Re: Freeview realities

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sat, 18 Nov 2006 10:30:24 -0500

At 4:22 PM -0500 11/17/06, Manfredi, Albert E wrote:
To you, it's dismantling OTA TV and changing it to something possibly
completely unrelated. Even making yet another local utility (monopoly)
out of it. And to let the existing local TV distribution monopolies have
it all for TV distribution.

I don't think you have a good understanding of what I am promoting.

The current situation is local oligopolies (FTA broadcasters) that are dependent on an international oligopoly (The big five U.S. content producers). The multichannel distribution oligopoly is essentially the customer service front end for the entire television entertainment industry in the U.S. They collect enough money to pay for the distribution infrastructures, customer support organizations, and to pay subscriber fees to both broadcast sources (OTA content that was formerly free) and to cable networks (content that we have always paid small subscriber fees for - and now increasingly large subscriber fees like ESPN.)

U.S. viewers have the worst of both worlds. A dying FTA infrastructure that delivers limited content in the free and clear, and multichannel services for which they pay subscriber fees but must still watch upwards of 20 minutes per hour of commercials.

What I AM promoting is a distribution infrastructure that would be market driven, with a few rules to prevent another oligopoly forming to control content distribution. With this infrastructure, ANY content producer would bid for access to the system, paying market rates for carriage. The infrastructure/customer service side of this business WOULD operate as a monopoly, but they would have NO CONTROL over the content that is carried - the telephone networks operate in this manner. The infrastructure monopoly would cover its costs, and return any profits to the politicians, rather than the current situation, where the politicians get the money for the spectrum - and spend it - up front via spectrum leases that are offered at auction.

This network would be able to deliver bits to fixed, portable and mobile receivers, and change the mix of services offered on a dynamic basis, based on marketplace demand. Thus there would be a mix of high bit rate services for big fixed displays, standard definition services for portable displays, and very robust services for hand held and mobile devices. Along with this there would be an opportunity to deliver a wide range of data services including music channels, video download services, and information services that could be offered either in the free and clear or on a subscription basis.

There would NOT be a situation, as exists today, where the only way to gain access too the airwaves would be through negotiated contracts with a handful of networks and local broadcast stations. The content networks, existing local broadcasters, and new entrants would have equal access to the new infrastructure based on market rates for carriage.

To me, the solution is instead to get rid of the national cap, and let
parties interested in OTA TV, even if they are NOT themselves content
creators, put together systems with broad appeal. And operate them as
efficiently as THEY see fit. Unencumbered by the current regs on
affiliation etc.

Inother words, you are willing to let the big five content producers control everything.

And yes, if they decide to change their network to a subsription-only
network, it will probably fail. Simply because people all over the world
seem to expect more choice from subsription-only networks than OTA
networks can provide, especially given the shirnking TV spetcrum. But
the beauty of OTA networks is that multiple nets can coexist happily in
any given market. So if someone thinks he can make an OTA subscription
service float, go for it.

i strongly suspect that there is virtually no limit on the range of content that could be delivered via the system I propose. Remember, the current system now operates 24/7 mostly delivering content that has VERY small audiences. The system i am proposing would double the amount of spectrum available in most markets, and would utilize much of that off-peak time to deliver content to cache. The marketplace would determine the mix of free and subscription services. I would expect that there would continue to be a high percentage of FREE services, simply as the promotional engine to help promote the subscription services.

You might be right that the networks would compete, however, the current trend is to control virtually all of the content they can deliver via the broadcast net, then build browser channels to provide access to the content that has already been run. The big five are squeezing out the independent producers, who have little leverage in terms of carriage. You either accept their terms, or try to sell direct to the consumer via DVD or Internet download.

 BUT. If the broadcasters in the U.S. DID want to compete, they
 would drop ATSC like a hot potato.

I don't agree with this, mostly because I do not, and never have, seen
any major differences between ATSC and DVB-T. I have never bought your
notion that "ATSC is not extensible," for example, and I think history
has proved that ATSC is every bit as "extensible" as any other digital
network. And as A-VSB proves, that extensibility *includes* at the
physical layer.

The reason you cannot see this is that you cannot let go of the idea that big high powered sticks are the most efficient infrastructure to deliver DTV. In some regions of the U.S. the big sticks Do make sense, and they can continue to be used with gap fillers. But in the densely populated areas of the country the big sticks require too much spectrum to be left fallow in order to prevent interference. The proper infrastructure for optimal spectral re-use is SFNs, and the cost overhead (i.e. payload) to deploy A-VSB versus DVB-T is too severe.

 The "very small percentage" you talk about is upwards of 30
 percent who actually use OTA TV. The 15 percent figure only
 represents households that depend *solely* on OTA.

 This is speculation on your part. Yes there are studies that
 say that upwards of 30% of homes still use the OTA service.
 And there are studies that say it is only 15%.

Actually, all the studies that say 15 percent that I am aware of are
VERY specific in stating that this applies to households which depend
*ONLY* on OTA TV. The upwards of 30 percent, actually closer to 40
percent, applies instead to total usage of OTA. Including portable sets
for ball games or back yards, including OTA to supplement DBS, including
kitchen sets, and so on.

yes Bert, I have seen these studies, and the organizations that have paid for them. Bottom line, we can agree that 15% still rely upon the service, and that there is still some secondary use by homes that subscribe to multichannel services. And THIS is the problem. We need a service that a much higher percentage of viewers rely upon, and virtually ALL viewers embrace for the new services that will be delivered, especially using portable and mobile receivers.

I see NO EVIDENCE that the current DTV standard and business model is going to create new markets and cause more viewers to buy devices to use the service. What I see is a long slow ride into the sunset.

 The actual percentage is irrelevant - what matters is that
 this is a dying service that is causing at least 70% of U.S.
 viewers to pay more for other services due to the lack of
 spectrum to support them.

That's why something called "compromise" exists, Craig.

"Compromise" means that we don't buckle under to all the greedy land
developers, as you seem to advocate, but instead we allow for a mix of
usage. With the DTT transition, TV will be giving up a healthy chuck of
spectrum as it is. And nothing prevents those frequencies which will be
vacated, but still "belong" to TV, like the lower VHF spectrum, from
being used by other services on a case by case basis.

This is not compromise Bert. It is a government subsidy to prop up a business model that cannot survive without the protection (and subsidies) from competition, that results in significantly higher prices for consumers for services that might otherwise be offered in the free and clear.


You can UNSUBSCRIBE from the OpenDTV list in two ways:

- Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org
- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word 
unsubscribe in the subject line.

Other related posts: