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The Telecom Digest for June 22, 2013
Volume 32 : Issue 135 : "text" Format
====== 31 years of TELECOM Digest -- Founded August 21, 1981 ======
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Date: Thu, 20 Jun 2013 19:32:07 -0700 (PDT)
From: Neal McLain <nmclain.remove-this@and-this-too.annsgarden.com>
To: telecomdigestmoderator.remove-this@and-this-too.telecom-digest.org.
Subject: Re: End of Cable Bundle Inevitable, With or Without Aereo: CEO
Message-ID: <8a76ba5f-3993-4898-a985-56e54e88f3ab@googlegroups.com>
In Message-ID: <kpof6l$2np5$1@grapevine.csail.mit.edu> Garrett Wollman wrote:
> A larger and larger fraction of broadcasters' revenue now
> comes from "retransmission consent" payments from MVPDs, and a
> much smaller fraction of broadcasters' total audience depends
> on over-the-air reception as a way to acquire the programming.
> Most metropolitan areas are monopoly or duopoly markets for
> wireline MVPDs.... Thus, the "extremely valuable local
> monopoly" on 6 MHz of spectrum is no longer particularly
> valuable (particularly if it's unsaleable VHF); it is the
> other perquisites that come along with being a licensed
> broadcaster, such as retrans consent and the right to exclude
> competing broadcasts of the same programming, that have value
> today.
Not to mention government-mandated geographic market monopolies based on
half-century-old analog coverage areas.
>
> Stations use retransmission consent in two ways: first, to
> directly extract rents from cable subscribers by requiring them
> to pay cash for carrying the station, and second, to require
> MVPDs to carry (at an additional fee, of course) other
> programming owned by the licensee or an affiliate of the
> licensee....
This situation results directly from the 1992 Cable Act. In order to protect
over-the-air viewers, Congress wanted to make sure that broadcast television
would remain viable. Presumably, Congress saw retrans-consent revenue as a
way to protect OTA viewers.
In practice, of course, this has resulted in the truly anonymous situation in
which MVPD subscribers are being forced to subsidize OTA viewers.
> Aereo's claim, as made before the Second Circuit but not yet
> tested in any other circuit, is that their system rents to
> each customer an individual tuner (and antenna?), located at
> one facility in each market where they operate, and current
> laws exclude this arrangement from the definition of a
> regulated "cable television system". If they were regulated,
> they would be subject to the same must-carry/retransmission-
> consent regime.
For as long as Aereo keeps winning in the courts, it won't have to pay
retrans-consent fees.
Keep that in mind next time you pay your cable bill: you're subsidizing Aereo.
All in the name of consumer protection, of course.
[snip]
> If I were dictator, I would eliminate the must-carry side
> entirely for commercial stations..., provide retransmission
> consent only for subscribers who are located outside each
> station's FCC service contour, and end the use of Nielsen DMAs
> for the purpose of defining stations' exclusive markets. TV
> broadcasters would hate this, but many pointless stations would
> go under, making it easier to reuse the valuable upper-UHF
> spectrum (not to mention cable-TV spectrum) for something more
> productive.
What about subs located inside the Grade B contour? If you eliminate both
must-carry and retrans-consent for every inside-contour home-DMA station, that
seems to imply that a CATV can carry, or not carry, the station, at its sole
discretion, without even letting the station know it. As an ex-cable guy,
that would be fine with me, but I don't think the NAB would approve.
Neal McLain
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