[opendtv] Re: White paper from CEA
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 26 Oct 2005 16:16:30 -0400
At 2:22 AM -0700 10/25/05, Tony Neece wrote:
> >Why is it the responsibility of receiver manufacturers to provide a=20
>>product that consumers have shown no interest in? The vast majority=20
>>of consumers have no reason to own such a box.
>
>Now if that were really true, then it follows that there was no need for =
>the
>digital transition at all. Then broadcasters should never have been =
>allowed
>spectrum for digital transmission at all and all OTA transmission should
>have been shut off as soon as most people had access to either cable or
>satellite.
I do not agree that this conclusion logically follows.
If one were to believe the storyline advanced by broadcasters when
they asked for the additional spectrum to offer HDTV, the conclusion
one would draw is that broadcasters were threatened by the
possibility that their cable competitors would use HDTV to extend
their competitive advantage. Joe Flaherty of CBS, got this ball
rolling several years in advance of the request to open the HDTV
process in 1987.
It was obvious, even back then, that this was not the real threat.
The real THREATS were land mobile, and the competition from cable in
terms of programming choice. Broadcasters were concerned that if
ANYONE got their hands on this beach front property they would
eventually use it to compete directly with them in the area of TV
content delivery. At the time, cable was beginning to compete
directly for viewer eyeballs, and it was clear that - if successful -
cable would continue to extend their competitive advantage with more
channels and services, while broadcasters would still be limited to a
single program stream.
Logically, broadcasters could have gone to the FCC with a warning
that they too would need to expand their channel offerings, or the
OTA service would be threatened with competitive extinction. But this
argument would have been hollow, as the networks were still in a
dominant position, and the rational behind the deal for the spectrum
was to provide communities with a public service - not to feather
the nest of a handful of national networks. If additional channels
were to be allocated, logic would dictate that they should be offered
to new entrants, not to the existing licensees or the networks with
which many were affiliated.
In fact, as the economics of broadcasting improved in the early '80s,
there was an explosion of new channels, with the OTA TV service
nearly doubling in size from about about 800 to 1500 channels. This
expansion did enable the formation of new networks and independent
outlets.
Asking for more spectrum to enhance the image quality of incumbent
broadcasters addressed both threats: it derailed the FCC plans to
allow land mobile to share the broadcast spectrum and it protected
the incumbent broadcasters from more competition in the OTA service.
At the same time, the broadcasters exerted their influence in
Congress to gain must carry and retransmission consent, which gave
the networks the leverage necessary to exploit the expansion of cable
services. This enabled the networks to grown into today's media
conglomerates, with control over ~90% of the TV audience...again.
Remember, that it was General Innstruments that demonstrated the
potential to use digital compression to cram more stuff into a 6 MHz
analog TV channel. GI developed this technology to enable DBS to
compete with cable by cramming multiple channels into a 6 MHz
satellite transponder. Thus it was know form the moment that the FCC
told the Advisory Committee that their mandate was to deliver HDTV in
a single 6MHz channel, that those channels could also be used to
deliver multicasts.
While multicasting was known to be possible, it was politically
incorrect to even discuss the possibility in ACATS and ATSC
proceedings until 1995, when FCC Chairman Reed Hundt opened the door.
This was going to be an HDTV service!
The logic was obvious: if broadcasters only wanted to deliver the
equivalent of NTSC, they could do this in 2 MHz channels. Asking for
the ability to multicast might be viewed in Congress as an expansion
of the broadcast franchise, so the goal HAD TO BE HDTV to assure that
each licensee would get 6 MHz of bandwidth.
After it was clear that the ATSC standard would be adopted and that
Congress would authorize the simulcast transition being proposed by
the FCC, SDTV formats and multicasting were slipped in at the last
moment. I was in the middle of this effort, and can only say that it
was the ultimate example of the corruption of the entire process.
At this moment in time the FCC could have argued that to protect the
competitiveness of OTA broadcasting that the spectrum should have
been used to deliver the equivalent of an expanded basic programming
service. They COULD HAVE reclaimed all of the broadcast spectrum,
repackaged it to allow for a service with at least 30 channels, given
incumbents one of these channels and offered the rest to new
entrants. But they acted to protect the incumbents instead.
Regarding the ability to hook up multiple sets to cable...
>Not necessarily so. It can be quite a project to unobtrusively run coax
>about the home. DirectTV charges an additional fee for each additional =
>STB.
>Doesn't cable also do that?=20
Most homes built since the late '70s have been pre-wired for cable.
Adding cable outlets can be a hassle, but it is really not that
difficult.
DBS has no choice but to require a separate STB for each receiver,
unless you just want to see the same stuff in more than one room.
Cable has the same problem for their digital tier, but NOT for the
analog tier; by 1992 only the oldest legacy NTSC receivers were not
ANALOG cable ready. The 1992 Cable Act made it illegal for cable to
charge a monthly fee for each set hooked up to the cable distribution
system in a home. Now cable promotes the use of built-in analog
tuners as a competitive advantage, to fend off the competition from
DBS.
So to bring this story full circle, the spectrum COULD be used to
offer an updated FTA service that would allow both incumbent
broadcasters and new entrants to deliver a multichannel service that
would appeal to a much larger audience than the 15% of NTSC holdouts.
This is what is happening in Europe, and the results are obvious.
Established Brittish broadcasters who missed the first window of
opportunity to be part of FreeView are now paying tens of millions of
Euros to get their content onto Freeview, where the ONLY revenue they
will receive is from advertising...
Just like the good old days for the broadcast networks here in the U.S.
That can't happen here in the U.S. because of the political
gerrymandering that has built, protected, and rebuilt the media
conglomerates. They now generate revenues from advertising,
subscription fees from cable and DBS, and the back end revenues from
syndication.
They fully understand that Must Carry and Retransmission consent are
on shaky ground; that this competitive advantage is tightly coupled
to the ANALOG broadcast service.
The FCC refused to grant them multicast must carry, knowing that the
courts would reject it in a heartbeat, since they have no legislative
authority to do so. I am very hopeful that Congress will attempt to
grant them multicast must carry, as this will immediately cause the
cable industry to challenge the legislation...
And this time they will win, bringing at least a degree of
competition back into the television distribution marketplace.
Regards
Craig
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