Dish network and FCC arbitration

[phrelin]

Dish stalled contact negotiations for channels or upcoming legal deadlines facing Dish being discussed here include:

Fox cable channels and broadcast stations
Belo broadcast stations including local news subchannels
PBS broadcast stations FCC mandate lawsuit
Disney cable HD channels
MSG (formerly Cablevision) cable channels

Dish, of course, is now supporting FCC arbitration. At first, I thought that it might be a good idea. But then I thought about it overnight. The whole idea raises a new level of curiosity on my part about how we got here and what exactly do Cablevision and Dish and others expect from the FCC. These are the kinds of questions that came to mind:

What exactly would the FCC think is a fair price for a big-4 national network affiliated broadcast station and for a The CW affiliated broadcast station?
How would the FCC price ESPN and the Fox regional sports networks and MSG and what "tiers" would they put them in?
What would it think would be a fair price for other cable channels, comparing FX to the Disney Channel, and what "tiers" would they put them in?
Given limitations in available transponder space, how would the FCC prioritize Belo's local subchannel feeds and sister channel feeds versus PBS station feeds, for instance in the Seattle/Tacoma area where there are two PBS stations and Belo's NBC affiliate KING has a Universal Sports subchannel and its independent sister station KONG that also broadcasts to mobile devices?

[James Long]

PBS broadcast stations FCC mandate lawsuit
Disney cable HD channels
These two would not be candidates for FCC arbitration as they have already been settled by the courts (the ultimate arbitrator).

I don't believe the FCC will get into the business of setting fair prices and tiers for channels. Their role will be to make sure the sides are talking and keep talking. It they start setting prices and tiers then their decisions could affect other parties not part of the dispute. (Why should DirecTV not pay the arbitrated rate DISH or Cablevision or Time Warner comes up with?)

Given limitations in available transponder space, how would the FCC prioritize Belo's local subchannel feeds and sister channel feeds versus PBS station feeds, for instance in the Seattle/Tacoma area where there are two PBS stations and Belo's NBC affiliate KING has a Universal Sports subchannel and its independent sister station KONG that also broadcasts to mobile devices?Congress and the FCC has already dealt with the subchannel issue. Only the primary channel must be offered carriage, sub-channels are not required (although if I recall correctly a major network on a subchannel would be considered carriage for blocking carriage of a distant of that network in a market). That doesn't mean that they can't be carried - several markets have subcarrier channels carried on DISH ... usually CW or other network affiliates. My market (South Bend IN) has "SBT2" carried via satellite ... it was initially carried as a UPN affiliate but has not been dropped.

The PBS carriage issue is also covered by existing law - for just the main channels.

If Belo or other broadcasters want to use carriage of their subchannels as "payment" for their main feed carriers will have to include the costs in the "price". How much would DISH charge for delivery of a channel to X number of subscribers? Treat it like a PI channel that pays for carriage and deduct the cost from whatever the broadcaster wants to pay for their main channel.

[GrumpyBear]

I don't think FCC Arbitration will do anything more than keep both sides negotiating, in a fair manner. FCC will have little or nothing to do about the pricing, but with Arbitration, things would be solved sooner. Arbitrators have the knack of giving both sides to pitch thier best reasoning and giving each other a chance to settle prior, making a choice that could end up pissing both sides off.

[TvilleBee]

I still believe that the Local channels should free to pay satellite & cable providers due to the fact that they broaden their reach. All OTA channels w/ the exception of PBS, are advertiser supported, to me, charging a company to rebroadcast their customers ads constitutes double income for the OTA station. Especially now that the FCC has the must carry law (?) that if one channel from a area is carried, the rest of the big networks must be as well... that puts the DBS companies ba11s right in the palm of the locals hands... If anything, the locals should pay rent on the encoders & uplink facilities used to distribute them...

just my $0.02

[James Long]

Especially now that the FCC has the must carry law (?) that if one channel from a area is carried, the rest of the big networks must be as well...Not that simple ... for satellite (like DISH Network) if one local channel in a market is carried all others (regardless of network) must be offered carriage ... but the carrier does not have to accept the broadcasters terms for carriage.

The only broadcast stations that a satellite carrier must carry are those who chose "must carry". Making that choice eliminates the ability for the station to charge for carriage or otherwise withhold their consent to carry. If a station wants money or other consideration they choose "consent to carry" and risk not having carriage at all.

[phrelin]

Arbitrators have the knack of giving both sides to pitch thier best reasoning and giving each other a chance to settle prior, making a choice that could end up pissing both sides off.That's what I'm driving at, I guess. The problem here is there is a third party involved - the viewers.

It seems like there is an irrational environment set up by a mixed bag of laws, regulations, and economic forces. The what "if's" puzzle me as I think about balancing only two interests in this picture - channel owners versus cable/satellite system owners.

So the courts decide Dish has to pay Disney more and must carry all the PBS stations in Los Angeles, both irrational and costly decisions in terms of the viewers preferences.

Then two arbitrators say yep, MSG and Fox regional sports should be carried on the lowest tier, but the price per customer won't be quite as high - seems fair to the two parties. The channel owners are sort of happy and Dish has sports again helping it to keep some subscribers. This is a costly decisions in terms of the viewer who couldn't give a crap about sports.

Another arbitrator in the Belo case says "well, I don't think broadcast channels ought to cost viewers that much, but adding a subchannel and a sister station seems fair for everyone involved." Well, fair to everyone except the viewer on a limited budget.

And that arbitrator in the Fox situation says "well, I do think the Fox broadcast channels should cost viewers as much as ESPN, at least."

And then the Hasbro Channel and the Ryan Seacrest Channel will not only want on every system, but will want to get paid. Bring in an arbitrator.

And these decisions then spread throughout the business over the next few years, allowing Dish and Cablevision and DirecTV and Time Warner Cable to remain competitive though becoming too costly for many subscribers.

It's disturbingly irrational.

[bnborg]

I still believe that the Local channels should free to pay satellite & cable providers due to the fact that they broaden their reach. All OTA channels w/ the exception of PBS, are advertiser supported, to me, charging a company to rebroadcast their customers ads constitutes double income for the OTA station. Especially now that the FCC has the must carry law (?) that if one channel from a area is carried, the rest of the big networks must be as well... that puts the DBS companies ba11s right in the palm of the locals hands... If anything, the locals should pay rent on the encoders & uplink facilities used to distribute them...

just my $0.02

This is also what I have thought.

The problem might be with local advertisers that are paying only for a limited market. The broadcaster might not get any additional revenue.

Then there is the concept of the broadcaster's commercials being replaced with advertising by the re-broadcaster/satellite company.

[SaltiDawg]

...
What exactly would the FCC think is a fair price for a big-4 national network affiliated broadcast station and for a The CW affiliated broadcast station? ...
Being an arbiter does not mean that you dictate the "solution."

Not sure where this thread is supposed to head. :)

[FTA Michael]

Arbitration is used in a lot of areas, and it would work here if it were built into the negotiation process as a short-term last resort. But sometimes a carrier just wants to drop a channel or set of channels (Voom) and cost doesn't enter into it. The process would need to account for such voluntary deletions.

I think there are better answers than arbitration. This morning, I wrote in my blog that a national, fairly negotiated formula would correctly apportion the cable/satellite bill among all channel providers without a jillion separate negotiations. I also mumbled something about a la carte, but this shouldn't become yet another a la carte thread. So count me as a Yes vote for arbitration if Congress or the FCC ever get close to mandating it.

[phrelin]

Not sure where this thread is supposed to head. :)It's just me puzzling over the mish-mash of decision-making processes that seems to be slowly developing into some kind of "crisis of the week" for TV viewers somewhere in the country and wondering how others see this.

[GrumpyBear]

I agree Arbitration should be a last resort, to end disputes. Any situation were the broadcaster and the carrier decide that they don't want thing to do with each other wouldn't need arbitration as there would be no negotiations going on.
Arbitration should just be away to force both sides to sit down and continue to talk in good faith and iron things out, and if they can't decide an Arbitrator can take the info from both sides and make a decision for them.

Not sure how I would feel about a blanket national idea, only because it doesn't account for companies that have good working relationships and work things out. Or when a break is given for a channel because a carrier is willing to carry another channel or mulitple channels from a Broadcaster for better compensation vs a carrier that only wants or is willing to carry just one of the channels, the Broadcaster is offering.

Nice little article
http://www.variety.com/article/VR1118025939.html?categoryid=14&cs=1

I am hoping this brings to light how the Networks are broadcasting OTA and Carriers like Dish and Direct and others are just rebroadcasting that free signal and how that should be for free as it grows the networks market reach. Cable only Channels are different and should be the channels that have a price tag to carry.

[phrelin]

You know, it's seems almost nostalgic to remember the time we called broadcast stations free-to-air (http://en.wikipedia.org/wiki/Free-to-air) to emphasize they were supposed to be free.

[phrelin]

Here's an item from The Hollywood Reporter: Comcast, Tennis Channel Will Try Mediation in Carriage Dispute (http://www.hollywoodreporter.com/blogs/thr-esq/comcast-tennis-channel-will-try-31614). Hardly the top channel on TV, but hey anything to make a little progress and test the waters.

[SayWhat?]

^^^ What the FCC can do, and should do is return us to that. NO retransmission fees for any channel that is OTA broadcast openly to the general public.

I can see a nominal fee between the cable or sat provider to their customers to offset the costs of getting the signal to the uplink site, but they would not be allowed to profit from that fee.

That would end all of these disputes for OTA channels, but it wouldn't address the non OTA channels like FX or NatGeo.

[GrumpyBear]

Posted this in a different thread, but fits here as well.

That brings up one of my biggest pet peeves. Local channels are supposed to offer a signal that everybody in thier DMA can recieve. Locals only offer the bare minimum effort signal wise inside the DMA, yet are able to block people from getting a channel outside of thier DMA. I would love to be able to timeshift like they do in Canada and other places. Locals are included for free in a package no matter who the carrier is, but be allowed to have any other markets as many as you want, for a fee.

This isn't the 1950's anymore. People move all the time, no longer living were they consider home, and should be able to have access to anything a carrier can offer.

[SaltiDawg]

You know, it's seems almost nostalgic to remember the time we called broadcast stations free-to-air (http://en.wikipedia.org/wiki/Free-to-air) to emphasize they were supposed to be free.

They still are Free-to-air.