[opendtv] Re: M/H, Free OTA and Its Programming

  • From: "Bob Miller" <robmxa@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Tue, 29 Jul 2008 15:11:38 -0400

Long ago it was suggested that the best use of broadcasters 6 MHz was
for mobile and portable services and that competition would drive them
to limit the required NTSC quality program to as few bits as possible
with the rest being used with the best codec available.

Someone instructed me then that B&W took almost as many bits as color
and someone contradicted that. Whatever, I expect to see the required
NTSC program in the free and clear to be a high value community
service broadcast of weather, traffic etc. delivered in a static
picture with audio updates of breaking news and local interest items.

Dan, any "contract" between the people and broadcasters is in the
spirit of the understanding much like the supposed promise to deliver
HD. In the real world the spirit has left us long ago.

The spirit of legacy receivers that will only receive the required
NTSC minimal broadcast will live on in the dumpster since they will
not be able to handle the codecs that will be used on most of the
spectrum. Didn't we all know this was the way, the truth and the lie
from the beginning?

Sooner than expected I expect that broadcasters will be using most of
their spectrum for mobile, fixed and portable delivery with advanced
codecs delivered to receivers that can handle most of the worlds
modulations and codecs. They may have to if we see AT&T, Verizon, Dish
and Qualcomm get wise to what the best use of their combined 700 MHz
spectrum is. Hint, it is not to use it with ATSC M/H.

To read that NAB pdf is to hear the anguished collective scream of all
the dinosaurs caught in the same tar pit convinced that their content
will save them. At least they are all together now unlike back in
2000. They seem to think that mobile and portable is all about added
revenue, adding a twinky for desert, when I believe it is really about
their lunch. The new broadcasters, possibly in multiple forms, will be
focused on the broadcasters lunch IMO, not the twinky.

The time frame for the broadcasters is to so dominate fixed, portable
and mobile broadcasting that the interlopers retreat in despair. If as
the pdf says, the interlopers get to that point of no return with sunk
cost, then broadcasters lose. The interlopers have better tools, don't
have to pay 5% of revenues and will then have a lot of money on the
line and supposedly they will be committed to OTA.

I have little faith that broadcasters will be committed or even see
the opportunity. Hint, the opportunity is to stay in business.

Take a look at what some broadcasters have done recently. Last fall
Lin Broadcasting called me to sell their 700 MHz licenses only months
before Auction 73. It was strongly hinted to me that they would sell
for a Million a license. Talk about second chances. I went nuts trying
to raise some money to buy their licenses but Aloha got them for
around $31.5 million or a million a license. I was screaming to anyone
that would listen that they were worth $300 million and that Auction
73 would prove it.

Long story short. AT&T, a possible new age broadcaster as the pdf
alludes to, paid $319 million for Lin Broadcasting's 31 licenses only
months after Lin sold them for $31.5 million. That is AT&T paid $2.5
Billion for licenses from Aloha that included those 31 licenses and
then paid $319 Million for the mirror image of those 31 licenses in
the auction. Buying the same licenses in 53 and 58 in Auction 73 as
they purchased from Aloha with 54 and 59.

I think 54 and 59 are worth more than 53 and 58 because AT&T can use
more power, 50 kW, and can take more time to build out using 54 and
59. So the value of the Lin licenses is more to AT%T than the $319
million they paid for 53 and 58.

Personally I think the 31 Lin licenses are worth more like $1.3
billion, AT& T just didn't have to pay that much since no one was
bidding them higher. If you don't think they are worth that much try
to buy them from AT&T for $2 Billion today. I doubt that they would
sell them for $2 Billion today.

Lin sold them for $31.5 million last fall!!!!

That in a nutshell is the difference between broadcasters and what is
about to hit them.

Bob Miller

On Tue, Jul 29, 2008 at 11:55 AM,  <dan.grimes@xxxxxxxx> wrote:
> Clearly, broadcasters are looking to M/H as a viable market for fee based
> offerings.  It is currently my understanding that FOTA must be provided by a
> broadcaster, although this only needs to be one programming stream and the
> quality is not regulated. (I say "my understanding" because many things that
> I thought were true have been effectively countered on this forum.)
> If M/H for a fee happens on OTA broadcasts, I am betting that the free
> portion becomes nothing more than an infomercial channel with ads, promos
> and possibly some news (it is largely that today).  There might be some
> programming but most programming is already laden with over 20% of the time
> spent in commercials.  And the quality will become little more than a
> thumbnail's version.  No, once broadcasters get the taste of income from
> fees for their broadcast, there will be very little incentive to keep the
> quality of FOTA up.
> Now, I'm not saying this is good or bad, I just think it will effectively be
> the end of FOTA.  I also think that the contract between the citizen/people
> and the broadcaster (FCC/broadcaster) will effectively be forgotten, whereby
> the OTA broadcaster will not provide the programming promised in exchange
> for the frequency spectrum.  (Of course, this is all predicated on my belief
> that there is a contract between the people and the broadcaster, which many
> will probably argue does not exist.)
> While I would be tempted to rally the citizens to file complaints against
> the broadcaster to go back to providing what they owe the community, I doubt
> it would do much good.  No, the less than 14% of us that use FOTA services
> will largely be forgotten or overridden in the society that is driven by and
> considerably controlled by money.
> Just my opinion, which is certainly not based on a deep understanding of the
> broadcaster's political environment.
> Dan
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