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Guest Message by DevFuse

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Charles Ergen testifies before Congress Re: reauth of SHVERA


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#1 OFFLINE   david_jr

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Posted 25 February 2009 - 05:23 AM

Charles Ergin testified before Congress on 2/24 at the Subcommittee on Communications, Technology, and the Internet Committee on Energy and Commerce regarding the Reauthorization of the Satellite Home Viewer Extension and Reauthorization Act. He makes some interesting points and I hope they're listening.

Of particular interest regarding retransmission agreements:

"On retrans reform – a broadcaster used to negotiate with a single cable company and the leverage was relatively equal. But, today, DISH customers are held hostage, as broadcasters play their local monopoly off multiple pay-TV providers. In 2008 alone, consumers lost programming in approximately 15 percent of our markets because of retrans disputes. This is a huge increase over prior years, and the problem keeps getting worse. Today, stations in seven of our markets remain down because of unreasonable demands from Fisher Communications. Yet broadcasters provide the same content for free on the Internet and to those lucky enough to live within the shrinking areas of digital over-the-air coverage.

Because the broadcasters got their spectrum for free, I still think retrans should be free – but I understand I’m in the minority on that. So, first option, create a national retrans rate, which would apply to all broadcasters and all pay-TV providers. Treat a monopoly like a monopoly. Satellite providers already pay a fixed, per-subscriber copyright royalty rate, and I see no reason why a similar concept can’t work for retrans. Or, second option, create an actual market. If a broadcaster threatens to drop programming, pay-TV providers should be able to bring in a nearby affiliate to fill the gap. Consumers should never have to wonder what happened to Sunday Night Football."

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#2 OFFLINE   jacmyoung

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Posted 25 February 2009 - 08:01 AM

...So, first option, create a national retrans rate, which would apply to all broadcasters and all pay-TV providers. Treat a monopoly like a monopoly...


Seems to me the best approach but on the surface too "socialized", how about fix a national formula to tie the rate proportional to the rate that particular station is paying the networks as part of their exclusive broadcast right?

If one station is paying NBC on average $.50 for each estimated viewers in its market, the other station in another market is paying NBC on average $1.00 for each estimated viewers in that market, the second station has the right to ask for more from DBS.

But I suspect the average per viewer rate should be fairly consistant notionwide so it will be close to a fixed nationwide rate anyway.

#3 OFFLINE   bobukcat

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Posted 25 February 2009 - 08:50 AM

Because the broadcasters got their spectrum for free, I still think retrans should be free


My thoughts exactly, unless they are supplying some kind of hardline feed to the DBS company there should be no charge to them if they are picking it up off air and then re-transing it to customers in that DMA.

#4 OFFLINE   paulman182

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Posted 25 February 2009 - 08:59 AM

I also think it is ridiculous that satellite has to pay to carry advertiser-supported OTA signals.

I agree with most of what Charlie says, but I'd like to hear him respond, under oath, to something like:

"Mr. Ergen, can you state for a fact that paying the increased fees that the broadcast stations demand would definitely require a price increase for subscribers ? Or would the result simply be a small drop in Dish Network's profits?"

#5 OFFLINE   snowcat

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Posted 25 February 2009 - 09:06 AM

Or, second option, create an actual market. If a broadcaster threatens to drop programming, pay-TV providers should be able to bring in a nearby affiliate to fill the gap. Consumers should never have to wonder what happened to Sunday Night Football."


I bet that would stop locals from overcharging. It's not the best solution, but it's better than the alternative of not having a particular broadcast station(s).

#6 OFFLINE   bobukcat

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Posted 25 February 2009 - 09:09 AM

I also think it is ridiculous that satellite has to pay to carry advertiser-supported OTA signals.

I agree with most of what Charlie says, but I'd like to hear him respond, under oath, to something like:

"Mr. Ergen, can you state for a fact that paying the increased fees that the broadcast stations demand would definitely require a price increase for subscribers ? Or would the result simply be a small drop in Dish Network's profits?"


I believe his answer to that would be something like "Yes, we are a business with shareholders that expect a reasonable return on their investment. Any additional costs we encur, especially programming costs as it is our primary operating expense, will be passed on to our consumers. We alredy have over a Billion dollars in debt on the books and cannot risk operational losses."

#7 OFFLINE   bobukcat

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Posted 25 February 2009 - 09:10 AM

I bet that would stop locals from overcharging. It's not the best solution, but it's better than the alternative of not having a particular broadcast station(s).


Sure it would, because their monopoly would be busted and we all know that competition drives down prices unless the competitors are engaded in price-fixing.

#8 OFFLINE   James Long

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Posted 25 February 2009 - 09:38 AM

Because the broadcasters got their spectrum for free, I still think retrans should be free – but I understand I’m in the minority on that. So, first option, create a national retrans rate, which would apply to all broadcasters and all pay-TV providers. Treat a monopoly like a monopoly. Satellite providers already pay a fixed, per-subscriber copyright royalty rate, and I see no reason why a similar concept can’t work for retrans.

I agree.

Or, second option, create an actual market. If a broadcaster threatens to drop programming, pay-TV providers should be able to bring in a nearby affiliate to fill the gap. Consumers should never have to wonder what happened to Sunday Night Football.

This is actually (partially) allowable under current law ... except Congress wrote it into the distants law instead of the local retrans law so DISH cannot use the law to benefit their customers. Significantly Viewed channels from other markets can be carried.

What really needs to happen is to break the concept of "market" and level the playing field between cable and satellite. Cable companies have small defined markets. They look at RF reception more than an arbitrary line drawn by the Nielson companies. It makes no sense that a signal available OTA to a viewer is not available via satellite to that viewer under any circumstance (even with the full cooperation of the station) just because of an arbitrary line.

Markets should be used on a permissive basis - to ADD more potential coverage - not a restrictive basis to eliminate a received OTA signal from a satellite customer's home.

Then set a national compensation price. It will help the smaller stations who would not dare choose "consent to carry" under current rules because they would simply be dropped as well as keep the monsters in line.

#9 OFFLINE   scooper

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Posted 25 February 2009 - 10:47 AM

While I do appreciate the current system, that doesn't mean I don't think it could use some tweaking. Mr. Ergen's comments are an interesting read on that.
You CAN put antennas on your owned and/or controlled property...

http://www.fcc.gov/mb/facts/otard.html

#10 OFFLINE   DustoMan

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Posted 25 February 2009 - 10:51 AM

Amen to that. Something needs to be done, the system is BROKEN!
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#11 OFFLINE   phrelin

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Posted 25 February 2009 - 11:02 AM

Because the broadcasters got their spectrum for free, I still think retrans should be free – but I understand I’m in the minority on that.

Charlie may be in a minority in the halls of Congress, but I find it hard to believe that if fully informed 95% of American's wouldn't be supporting his view.

Basically, Congress just gave these clowns that own local stations a second frequency (or if you go SD, up to three new frequencies) to broadcast on with the digital transition. And over three decades Congress has all but eliminated the requirements for public service from these "licensees", a term I use loosely since the license comes with about the same regulatory teeth as the local dog license in terms of public benefit.

So is the renewed law going to describe all local subchannels as local stations in the must-carry category? If so, Dish and DirecTV could be required to add up to 50% more satellite capacity so that you can see 16 SD PBS stations in the Bay Area instead of 4, while we Dish subscribers may never get one in HD because of cost.

I don't expect Congress to do anything to offend local TV stations since most American's get their "news" about Congressional elections from the local TV stations.

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#12 OFFLINE   nmetro

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Posted 25 February 2009 - 12:43 PM

Of course the viewer can fight back by filing complaints with the FCC that their local TV does not serve the public interest. Considering that 1/3 of the day, local TV stations run infomercials which generally sell products of questionable value. Also, running news casts does not totally qualify for devoting some hours per week to education. Talk shows, jury shows, and weak substitutes for news magazines do not qualify. Then, there is reality programming.

If anyone has taken a look at daytime programming in any market, they will notice that what is aired only supports the bottom line for these stations. Denver daytime TV from early in the morning until prime time is full of the programming I described above, as is programming after midnight. On Sundays, when there is no sport programming, the local stations run informercials during the day.

Congress is fully aware of this practice, as they watch television on local channels to see what the people think of the lousy job they are doing. The NAB, like bankers, are a very powerful lobby. So powerful, that they can charge any fee to carry free television signals, prevent people in this country from receiving out of market signals and force ridiculous must carry rules for religious and shop at home channels; even though these channels are fed off a national feed. Half the Denver channels carried fall into this category.

With DTV, many stations want to carry multiple channels. Some of the multiple channels are again shop at home and religious channels available with a national feed. If satellite have to carry these secondary channels, they are going to ne many more satellites. Cable companies are going to need more capacity. There are approximately, 1800 TV stations in the country, if all of them broadcast on all four of the DTV channels, that would me 7200 TV stations that must be carried. Of course, the TV stations will want fees for these channels, too.

The latest push in Congress to force DISH Network to carry the smallest 31 TV markets is an example of a broken system. Probably, the spot beams would take care of adding these markets, but the owners in these markets, want a higher fee. My suggestion to DISH is to uplink these markets on Echostar 5 (the old, dying 129 satellite). As for secondary DTV channels, they should do the same.

#13 OFFLINE   david_jr

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Posted 25 February 2009 - 04:35 PM

I think I am going to try and email my congressman on this. Anyone know the date that this is actually up for a vote?

#14 OFFLINE   brant

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Posted 25 February 2009 - 05:09 PM

If one station is paying NBC on average $.50 for each estimated viewers in its market, the other station in another market is paying NBC on average $1.00 for each estimated viewers in that market, the second station has the right to ask for more from DBS.


i disagree.



i don't like government telling a business how it has to be run, but charlie is dead on with his assessment. treat it like the monopoly it is.

#15 OFFLINE   calgary2800

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Posted 25 February 2009 - 11:30 PM

Way to go Charlie and stand up for us. In effect he saying if to Fisher, if you dont provide it someone else will.

#16 OFFLINE   david_jr

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Posted 26 February 2009 - 08:50 AM

i disagree.



i don't like government telling a business how it has to be run, but charlie is dead on with his assessment. treat it like the monopoly it is.


But this is not a regular business. It is an FCC regulated industry and a monopoly. There has to be government input. If not open up the industsy and let people buy what TV they want from where they want. I would love that. If they're not going to do that, then they have to regulate it. DISH is trying to make the regulations a little more fair toward Sats. That's their business and they have to follow the regulations so they're trying to get them to favor them a bit. I agree with DISH that the regulations need to change to favor the consumer for a change. Right now they're heavily in favor of the broadcasters who get their air for FREE and the Cablecos who also have monopolies on markets for the most part.




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