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The Telecom Digest for June 22, 2013
Volume 32 : Issue 135 : "text" Format
Messages in this Issue:
Re: End of Cable Bundle Inevitable, With or Without Aereo: CEO (Neal McLain)

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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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