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Are broadcast networks needed? (spin off conversation)


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#26 OFFLINE   Alan Gordon

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Posted 16 July 2010 - 05:52 PM

I'd like to have one LOCAL channel.

If the networks are still around, end exclusivity rules and allow them to FIGHT for my viewership instead of counting me regardless of whether or not I want them to.

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#27 OFFLINE   James Long

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Posted 16 July 2010 - 05:59 PM

Or look no further than KRON in San Francisco.

Care to elaborate?

I believe affiliates can live without a network ... there are a lot of successful independent stations in our country that are not major network stations. But networks living without affiliates? It is within the networks power to do that now ... but they have not done it because (and you agree) the network affiliation model works.

#28 OFFLINE   Davenlr

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Posted 16 July 2010 - 06:09 PM

It works because of Government protectionism. Let me or my neighbors choose between the affiliates in Little Rock, or Memphis (or Springfield Mo), and see how long the Little Rock affiliates survive. Our affiliates cancel network programming to show infomercials, run 1/3 screen weather maps all over it, and are total losers. The only reason they survive is because the GOVERNMENT refuses to let us choose to watch another one.

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#29 OFFLINE   James Long

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Posted 16 July 2010 - 06:12 PM

It works because of Government protectionism.

The government is honoring the affiliation agreement that the networks and the stations have put in place.

Please see my post above if you want the government to take over the business you're running/work in and put you out of business.

#30 OFFLINE   Alan Gordon

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Posted 16 July 2010 - 06:18 PM

Please see my post above if you want the government to take over the business you're running/work in and put you out of business.


My company doesn't force people to use my product over someone else's...

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#31 OFFLINE   James Long

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Posted 16 July 2010 - 06:25 PM

My company doesn't force people to use my product over someone else's...

You're not forced to watch TV either.

Affiliates make the signals available ... 27% of TV viewers would not have any TV reception if it were not for the affiliate networks. I suppose some of them could be forced to convert to cable/satellite to get their programming.

Oh well ... I've wasted too many pixels on this. Bottom line, distributing network programming via affiliation agreements will continue despite the efforts of a few people who want to see otherwise.

The method works.

#32 OFFLINE   Alan Gordon

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Posted 16 July 2010 - 06:32 PM

You're not forced to watch TV either.


Nope... and people aren't forced to do business with my (work) company either...

I'm actually lucky in that I can receive affiliates of two of the big four network, so technically, I'm not exactly forced myself, but I know others who are.

Affiliates make the signals available ... 27% of TV viewers would not have any TV reception if it were not for the affiliate networks. I suppose some of them could be forced to convert to cable/satellite to get their programming.


I never said to get rid of broadcast TV...

Oh well ... I've wasted too many pixels on this. Bottom line, distributing network programming via affiliation agreements will continue despite the efforts of a few people who want to see otherwise.


Absolutely! The question is... how long?!

The method works.


They usually do... when you have no choice... ;)

~Alan

#33 OFFLINE   runner861

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Posted 17 July 2010 - 12:50 PM

It wasn't until 1992, when Congress passed legislation that allowed locals to either elect "must carry" status or demand payment for carriage, that we had these stations able to secure absolute protection from out-of-market stations. Prior to that time, cable systems and satellite viewers were able to freely receive out-of-market stations.

For example, in northern California, many systems were carrying network affiliates and independents from San Francisco, Monterey-Salinas, Santa Barbara-San Luis Obispo, Sacramento, and Fresno. The stations were not carried due to "significantly viewed" status. They were carried as distants. The stations at times duplicated both syndicated and network programming. The sky didn't fall. Stations in smaller markets didn't go out of business. For forty years, ABC operated two affiliates in the same market--KGO in San Francisco and KNTV in San Jose. Two stations, both affiliated with ABC, about forty miles apart, both serving the same market. KNTV also reached south to the Monterey-Salinas market, and KGO was carried on cable in the Monterey-Salinas market. Then, in 2000, ABC decided to drop KNTV and have KGO become the exclusive carrier of ABC in the San Francisco market, and the near-exclusive carrier of ABC in the Monterey-Salinas market.

You can still find a few small cable systems in northern California carrying distant network and distant independent stations.

The NAB successfully lobbied Congress for the 1992 legislation with the idea of increasing funds to local stations and decreasing competition for local stations. The idea was, the local station can demand placement if the cable company does not particularly want to carry the station, or, if the cable company wants to carry the station, the local station can negotiate for money or other things. Many local stations negotiated for deletion of the distant network station of the same network, as well as payment. (I say cable because there wasn't much carriage of local stations on satellite in 1992.)

The NAB has certainly created a lucrative market monopoly for the local stations, completely to the detriment of the viewers. Now we have networks and stations threatening to pull their stations and demanding payment, driving up cable and satellite rates. They also have little incentive to engage in local coverage, knowing that they are not subject to competition.

My point is that when I say that a viewer should be able to purchase any station on an a la carte basis from any market, it is really not that different from how things were in the 1960s, 70s, and 80s, albeit on a smaller basis. All Congress has to do is to pass a law that allows the satellite and cable companies to carry any OTA station. Then the market will truly be free and viewers will decide what they want to watch, and local stations will be forced to engage in true local coverage in order to retain viewers. Then any affiliate that negotiates for exclusive rights will know that the exclusivity is for OTA reception, and that the affiliate is subject to competition from other stations on cable and satellite. It will simply be a fact that each station will figure into its market modeling and contract negotiations.

Those of us who suggest that out-of-market stations should be freely available are not suggesting something revolutionary, or something designed to destroy OTA reception. All we are suggesting is allowing viewers some choice, and returning to the laws in effect during the early days of cable.

Edited by runner861, 17 July 2010 - 12:58 PM.


#34 OFFLINE   James Long

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Posted 17 July 2010 - 02:12 PM

(I say cable because there wasn't much carriage of local stations on satellite in 1992.)

DBS, which made satellite reception trivial, wasn't available then. One could subscribe to C band but the market was so small that it really didn't hurt anyone.

I remember when the syndicated exclusivity and carriage laws hit cable. The technology wasn't as good as it is today and channels went black on the system in my town. Then the channels were dropped. I suppose it is easier not to carry a channel than to deal with which hours it should be blocked.

I believe the first distants law for satellite was put in place in 1999. The suit in Florida led up to that. The stations sued to stop carriage, congress responded by writing laws that allowed carriage in certain circumstances. Every five years the law overriding the station's and network's wishes and affiliation contracts expires - and is adjusted to meed the current situation.

Without STELA and it's predecessors the availability of OTA stations would be entirely up to the networks and stations. They would handle the situation via the courts ... suing to prevent carriage or demand "fair treatment". The law has provided a structure for the parties to meet in the middle.

My point is that when I say that a viewer should be able to purchase any station on an a la carte basis from any market, it is really not that different from how things were in the 1960s, 70s, and 80s, albeit on a smaller basis. All Congress has to do is to pass a law that allows the satellite and cable companies to carry any OTA station.

And that law would interfere with the contracts already in place with the stations - especially if it extended a station's carriage outside of their normal broadcast area.

I wouldn't mind a "can carry any OTA station within it's FCC defined coverage area" law. Dealing with white areas would be a secondary issue.

All we are suggesting is allowing viewers some choice, and returning to the laws in effect during the early days of cable.

Scratch the laws and you lose the carriage - unless you can get a court to rule that cable/satellite can take any signal they want without compensation. The courts ruled against that. Congress disagreed and put statutory licensing in place. Life continues.

#35 OFFLINE   Bigg

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Posted 17 July 2010 - 03:07 PM

Let's take out some assumptions here, OK?

The Super Bowl "would be on some network, somewhere, probably one of the big ones. " Which one? I mean, if we are discussing the end of the network/affiliate model, which network?

Although I am trying to figure out how "you'd still even have basic cable with the networks being cheaper." How would they be cheaper? End the network/affiliate model, and the advertising dollars lost from the O&O network stations would be made up from carriage fees by charging cable and satellite companies BIG money.

And I'm also trying to wrap my head around "even with time zone feeds, some major markets might still do OTA." Watch the Super Bowl on the network feed, or on a local channel, which because of the end of the network/affiliate model means the affiliate would have to buy (without exclusivity) local rights for the Super Bowl.

There are way too many assumptions treated as fact.


Ok, let's say the networks had four O&O stations, one in NYC, one in Chicago, one in Denver, and one in LA, each broadcasting OTA. That's 46 million people with OTA coverage. No local affiliates would carry the Super Bowl. Maybe the big networks would run fiber links to other cities they thought should get OTA coverage, and broadcast their signals from nearby (i.e. broadcast WCBS-DT from New York in Philidelphia and Boston). They could have regionalized content, but not local content. That would be up to independent regional channels to handle, of which there would be maybe a few dozen at most, and those would be broadcast CONUS, as well as OTA locally.

Let the networks offer one HD feed in each time zone to Cable/Sat distribution. Let them offer one SD feed via commercial satellite to all their affiliates. Let the FCC group all the local affiliates onto one or two channels per DMA, and quadruple the allowed power so even granny with rabbit ears 60 miles away can get her "Free TV". Would allow campers access with portable DTV sets, and greatly enhance local emergency weather coverage and public service. If you want HD, subscribe to cable or satellite.

Extra bandwidth can be sold to ATT so the Iphone can have a tower every two blocks so the calls wont get dropped.


Haha, well it's not quite that simple, but yeah, there's probably better uses for the spectrum.

That revenue is used to keep local transmitters on the air and pay for local operations that keep the networks on the air. Without those local stations people wouldn't see network programming and the advertising revenues would drop (less viewers). The networks would also lose the fees paid by the affiliates.

If the affiliate system was not economically viable for networks they would pull their content from OTA and put it on one of their many cable networks.

Affiliate networks exist because they work.

That affiliation system works through a system of managed monopolies. The network sells their content with first run exclusivity to their affiliates that pay for that privilege. Grand schemes for a "national" channel of the networks interfere with that affiliation system. They violate the agreement the networks have with their affiliates for first run exclusivity.

I suppose you are one of those people who want the government to further interfere with free trade and force networks to violate their affiliation agreements for your own benefit?

How would you like it, Bigg, if the government walked into your successful business and told you they were shutting you down and putting you out on the street? It isn't a fun prospect. Hopefully no one will ever do to you what you are suggesting be done to broadcast TV networks.

If you really think OTA networks would work better without affiliates go buy one, cancel the affiliation agreements and see if it works. The people who own these networks know better ... they know that despite the flaws that the affiliation system WORKS. And when something works you keep doing it.


The networks would have just as many viewers. Echostar 15 won't discriminate based on location.

No, I'm not saying the government should do it. I think the government should give Dish, DirecTV, and the cable, fiber, and IPTV guys the right to broadcast whatever OTA station wherever they want in whatever resolution they want. That may, over time cause the current system to crumble, which is currently being protected by the DMA system and regulation.

What I'd really like is for CBS, NBC, ABC, and FOX to say "enough is enough" and kill off all the affiliates and turn most of the O&O's into re-broadcasts of that time zone's master channel (maybe have two masters for East and West Coast with one for central, mountain, Alaska, and Hawaii time zones).

Either that or make new national HD feeds that are all national content and feed those to the pay TV providers.

Nope... and people aren't forced to do business with my (work) company either...

I'm actually lucky in that I can receive affiliates of two of the big four network, so technically, I'm not exactly forced myself, but I know others who are.



I never said to get rid of broadcast TV...



Absolutely! The question is... how long?!



They usually do... when you have no choice... ;)

~Alan


Yeah, you're absolutely right, if we want to keep afiliates, we need to open up the market so that we can get better ones, and they have to compete. I doubt that many people would switch away, even given 3 markets in any one place, due to the size of satellite spots, and the amount of cable bandwidth, but that would be enough for the local affiliates to be pushed to do better. It's getting worse, because I have duplicates triplicates for all 5 networks (and PBS) in my area on cable, but only PBS is duplicated in HD, and DirecTV offers only CBS, NBC, and FOX, so they don't have ABC or PBS in HD. I have no clue why they don't duplicated all five, since NYC is on CONUS, and we are already in the spot for our own (Hartford-New Haven) market.

DBS, which made satellite reception trivial, wasn't available then. One could subscribe to C band but the market was so small that it really didn't hurt anyone.

I remember when the syndicated exclusivity and carriage laws hit cable. The technology wasn't as good as it is today and channels went black on the system in my town. Then the channels were dropped. I suppose it is easier not to carry a channel than to deal with which hours it should be blocked.

I believe the first distants law for satellite was put in place in 1999. The suit in Florida led up to that. The stations sued to stop carriage, congress responded by writing laws that allowed carriage in certain circumstances. Every five years the law overriding the station's and network's wishes and affiliation contracts expires - and is adjusted to meed the current situation.

Without STELA and it's predecessors the availability of OTA stations would be entirely up to the networks and stations. They would handle the situation via the courts ... suing to prevent carriage or demand "fair treatment". The law has provided a structure for the parties to meet in the middle.

And that law would interfere with the contracts already in place with the stations - especially if it extended a station's carriage outside of their normal broadcast area.

I wouldn't mind a "can carry any OTA station within it's FCC defined coverage area" law. Dealing with white areas would be a secondary issue.

Scratch the laws and you lose the carriage - unless you can get a court to rule that cable/satellite can take any signal they want without compensation. The courts ruled against that. Congress disagreed and put statutory licensing in place. Life continues.


The problem with the current system is that not only are cable and satellite under a different set of rules, but they often can't pull in out-of-market channels. Must-carry rules are fine, but cable and satellite companies should be able to pull in whatever channels they want to from other markets.

The other stupid part is that broadcast channels want money for carriage. It would be a lot harder to pull off that BS if the cable companies had the ability to just switch on a few fiber lines and get a distant network to replace the network in question, so that cable company could just stand there and tell the affiliate what they will pay them, while customers still get the network programming.

I know ABC7 was asking an absolutely insane amount of money for their programming on Cablevision, and was pumping out a bunch of BS about Cablevision at the same time.

The other thing is that the cable/SAT/telco companies paying for OTA coverage is just absurd. Anything OTA should be free for the companies to re-transmit. There are a few problems with charging for OTA content. The most obvious is that it is free OTA, so it should be free on pay service. However, the next issue is that this model is completely backwards, as the cable, satellite, and telco companies are paying for physical plant infrastructure, part of which is being used to re-transmit the local channels, so that the local channels can collect advertising revenue. Thus, if anything, the locals should pay the pay tv providers for distribution, just like it costs money to keep a 1300' guyed wire tower up in the air with megawatt-plus transmitters blasting RF energy out over civilization.

#36 OFFLINE   James Long

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Posted 17 July 2010 - 03:28 PM

Bigg, I believe the problem is that you're focused too much on the "via satellite" and not enough on the existing OTA networks. These networks have relied on OTA coverage for their audiences ... and still do as that OTA coverage gets their foot in the door on local cable systems nationwide and reaches the large number of viewers that don't get OTAs via a pay TV provider.

#37 OFFLINE   runner861

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Posted 18 July 2010 - 01:38 PM

I remember when the syndicated exclusivity and carriage laws hit cable. The technology wasn't as good as it is today and channels went black on the system in my town. Then the channels were dropped. I suppose it is easier not to carry a channel than to deal with which hours it should be blocked.


You are correct that it is a pain in the neck for the cable company to delete parts of the distant station's broadcast, while allowing other parts to pass through. However, the other problem is the 1992 law allowed local stations to elect either "must carry" or to demand payment. Some of the local stations have elected to negotiate as their payment for the distant stations to be dropped altogether, thus reducing competition. Although the local stations had already gained the ability to demand network exclusivity and syndicated exclusivity, they still faced some competition from the distant stations for other programs, such as news and other related programming.

For example, many people in Monterey-Salinas market enjoyed watching the news from San Francisco. It is only 85 miles away, but is a much larger market and has much better local news coverage, including news coverage from the state capital. It also has many more hours of local news. In 1992, when the local stations gained the right to negotiate for carriage, one of the things that they negotiated was for the San Francisco stations to be removed.

That is one of the reasons that I believe this 1992 law was so destructive to cable and so damaging for the viewers. It has also led to massive rate increases to cover the costs of carrying the local stations, in addition to loss of choice of channels for the viewers. And the local stations have not improved their local coverage--in fact, knowing that they will not face competition from any distant stations, they have decreased their local coverage and just purchased a bunch of syndicated garbage.

#38 OFFLINE   Greg Bimson

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Posted 19 July 2010 - 08:55 AM

If you really think OTA networks would work better without affiliates go buy one, cancel the affiliation agreements and see if it works.

Or look no further than KRON in San Francisco.

Care to elaborate?

As you said, cancel the affiliation agreements.

Which means each of the networks would have to terminate their affiliation agreements with the Philadelphia stations. The caveat here is that the networks own their own station in the Philadelphia market.

The issue with KRON is that Young Broadcasting spent almost $1 billion outbidding NBC for KRON. When Young Broadcasting finally gained control of KRON, NBC terminated their affiliation agreement with KRON. The value of KRON went downhill. Meanwhile, NBC was happy enough to buy KNTV and have their own station in the market be their affiliate. Seems like NBC was quite happy to continue the network/affiliate model in San Francisco.

People just do not seem to understand that the networks own some of their own affiliates which would be affected by the proposal. And KRON is a perfect example of watching an equity investment and cash machine drained of life once losing their network affiliation.

It works because of Government protectionism. Let me or my neighbors choose between the affiliates in Little Rock, or Memphis (or Springfield Mo), and see how long the Little Rock affiliates survive.

You are forgetting that cable and satellite companies are rebroadcasters. As such, they are copying the transmission and sending through some kind of distribution system to get it to you. So what you've missed here is that the rebroadcaster must come to a carriage agreement with the broadcast station, and that broadcast station would have to agree where the rebroadcasted signal can be sent.

The government has nothing to do with it. Dish Network can go ask WCBS in New York to carry the channel nationwide. That would require WCBS to clear all copyrighted programming they've contracted. And most of the programming on WCBS comes from the CBS Network. Do you think the CBS Network will allow WCBS to broadcast all of their programming nationwide when the CBS Network has first-run affiliation agreements with other channels around the country?

It wasn't until 1992, when Congress passed legislation that allowed locals to either elect "must carry" status or demand payment for carriage, that we had these stations able to secure absolute protection from out-of-market stations. Prior to that time, cable systems and satellite viewers were able to freely receive out-of-market stations.

You do realize at the time, there was a study put forth regarding local channels on cable. It was found that if a cable company no longer had their local channels on cable, over 50% of consumers would demand their cable bill be halved, and another about 25% would ditch cable altogether? It appeared that cable was built on the back of the local broadcaster, and they weren't receiving anything from the cable company.

Those of us who suggest that out-of-market stations should be freely available are not suggesting something revolutionary, or something designed to destroy OTA reception. All we are suggesting is allowing viewers some choice, and returning to the laws in effect during the early days of cable.

Yep. Let's have Charlie Ergen and Brian Roberts and the lke make all the money selling monthly subscriptions to programming and have NONE OF IT go to the broadcast networks which still provide the most-viewed programming.

Cable TV was still in its infancy; it was the Wild West of TV throughout the 1980's. The Cable Act of 1992 was enacted to right the wrongs of allowing one company to build their business on the back of another without compensation.

Ok, let's say the networks had four O&O stations, one in NYC, one in Chicago, one in Denver, and one in LA, each broadcasting OTA. That's 46 million people with OTA coverage. No local affiliates would carry the Super Bowl. Maybe the big networks would run fiber links to other cities they thought should get OTA coverage, and broadcast their signals from nearby (i.e. broadcast WCBS-DT from New York in Philidelphia and Boston). They could have regionalized content, but not local content. That would be up to independent regional channels to handle, of which there would be maybe a few dozen at most, and those would be broadcast CONUS, as well as OTA locally.

Sounds exactly like the current state of network/affiliate broadcasting today, except for the "and those would be broadcast CONUS", which is just like arguments from Davenlr and runner861. This appears to be the "we can't let the networks do what they want" argument, even though lifeline cable (which includes locals) and local channel packages on cable are still routinely the cheapest-priced programming options.

The network (which you so desperately want) runs their business their way, and you all appear to be fans of their programming, but cannot stand the way they run their business. Seems to me complaining about their business methodology won't bring and end to their business practice, so I will suggest the next best thing: stop watching, and explain to everyone why you are no longer watching so they can join your crusade.

That would be the quickest way to bring about the demise of network/affiliate model. It may also destroy the network and may cost you more than you wanted in the long run, but this is only about bringing OTA stations to their knees.

#39 OFFLINE   Bigg

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Posted 19 July 2010 - 10:16 AM

Bigg, I believe the problem is that you're focused too much on the "via satellite" and not enough on the existing OTA networks. These networks have relied on OTA coverage for their audiences ... and still do as that OTA coverage gets their foot in the door on local cable systems nationwide and reaches the large number of viewers that don't get OTAs via a pay TV provider.


Ok, so if the networks want their OTA, then, let them have it. However, we need to stop protecting certain stations. The law should be changed so that once a signal is OTA, any pay TV provider can take that signal and freely broadcast it anywhere they want to, so long as it is unedited (except for resolution/ compression scaling).

#40 OFFLINE   Greg Bimson

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Posted 19 July 2010 - 10:49 AM

Ok, so if the networks want their OTA, then, let them have it. However, we need to stop protecting certain stations. The law should be changed so that once a signal is OTA, any pay TV provider can take that signal and freely broadcast it anywhere they want to, so long as it is unedited (except for resolution/ compression scaling).

And then Dish Network can get a subscription to DirecTV, pick up DirecTV's channels and rebroadcast and repackage them onto the Dish Network system.

So instead of paying millions of dollars to ESPN, they just need to spend about $100 a month on DirecTV and rip and rebroadcast. That should save Dish Network a good $42 million a month, which is probably much more than what the local stations are receiving in agregate. After all, "we need to stop protecting certain stations."

And the only entities protecting "certain stations" are the networks themselves.

#41 OFFLINE   runner861

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Posted 19 July 2010 - 11:17 AM

You do realize at the time, there was a study put forth regarding local channels on cable. It was found that if a cable company no longer had their local channels on cable, over 50% of consumers would demand their cable bill be halved, and another about 25% would ditch cable altogether? It appeared that cable was built on the back of the local broadcaster, and they weren't receiving anything from the cable company.Yep. Let's have Charlie Ergen and Brian Roberts and the lke make all the money selling monthly subscriptions to programming and have NONE OF IT go to the broadcast networks which still provide the most-viewed programming.

Cable TV was still in its infancy; it was the Wild West of TV throughout the 1980's. The Cable Act of 1992 was enacted to right the wrongs of allowing one company to build their business on the back of another without compensation.


I couldn't care less what some study said. It's irrelevant. What people say in a study and what they will actually do are two different things. Besides, "studies" are routinely rigged to achieve the result that the organization doing the study wants.

Also, I have never advocated deleting local stations from cable. I am advocating importing distant stations in addition to continuing with the local stations. Advertising will continue to support the networks and the stations. Why should broadcasters, who are transmitting a "free" product, then be allowed to charge for it when it is rebroadcast by a satellite company or cable company? The satellite company or cable company is already conferring a benefit on the broadcaster by ensuring that viewers who could not receive the signal OTA will now receive it. Remember, not everyone with a rooftop antenna can receive every local station. Local reception is highly dependent on terrain. The viewer may be five miles or less from the transmitter, but, if there is a mountain in the way, the viewer may not receive the signal OTA. The viewer will receive it via cable or satellite.

Ok, so if the networks want their OTA, then, let them have it. However, we need to stop protecting certain stations. The law should be changed so that once a signal is OTA, any pay TV provider can take that signal and freely broadcast it anywhere they want to, so long as it is unedited (except for resolution/ compression scaling).


I agree a hundred percent. Try it, people will like it, and the sky won't fall. Rates are the only thing that will fall, and viewer choice will go up. Stations will have a strong incentive to produce programming for their local market when they face real competition.

#42 OFFLINE   Herdfan

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Posted 19 July 2010 - 11:19 AM

While there are good arguments on both sides of this issue, the one thing that is broken is the antiquated DMA system used to determine "markets". There is a DMA in Parkersburg WV that consists of 3 counties. Three counties (2 in WV, 1 in OH) and about 63,000 households.

The one affiliate in the DMA (WTAP) is a dual NBC/Fox and is basically a satellite of WSAZ from Huntington. Cable, but not satellite, provides CBS and ABC from Charleston.

Why does this DMA even exist? The 2 WV counties should be moved to the Charleston DMA and the OH county to either the Columbus or Stuebenville DMA. Or maybe even expend the one county Zanesville DMA.

Since the current station is owned by the same company that owns WSAZ, they could just use the existing station as a repeater and maybe do a local news show with area specific stories and provide locally inserted ads.

As for the consumer benefits, they would be in a DMA that would have all locals via satellite. The current spot beams for Charleston do reach those 3 counties. Having a 3 county DMA is not really good for anyone.

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#43 OFFLINE   James Long

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Posted 19 July 2010 - 11:35 AM

Imagine a national business that owns exclusive rights to a product. No other business in the US can sell that product. To distribute their product they have decided to set up a network of local affiliate distributors ... and to keep the product valuable they have decided to grant exclusive rights to each affiliate within their own territory to distribute their product. It is an agreement that all the affiliates and the national business have agreed to honor. The affiliates are not allowed to deliver the product to retailers outside of their territory.

Which means that if you are in Michigan and want that product your retailer must get that product from the distributor that has rights for Michigan. The retailer cannot get the product from a distributor in Iowa because the Iowa distributor has agreed not to compete with the Michigan distributor. (Generally the retailer would not want to go that far due to the increased shipping costs - but if the savings were great enough it may make economic sense to go from Michigan to Iowa for their product.)

And thus even though an individual may drive from Michigan to Iowa to buy a case of cola a distributor in Iowa cannot supply a retailer in Michigan with the same product.

And thus a regional sports network serving Iowa cannot distribute a professional sports game to viewers in Michigan without first obtaining rights for that distribution from the national company that owns the rights. (The league owns the rights and will most likely sell the right to view as part of a special package.)

And thus an Iowa television station cannot distribute broadcast network programming to viewers in Michigan without first obtaining rights for that distribution from the national company that owns the rights. (The network owns the rights and has most likely sold those rights to local broadcasters in Michigan.)

And thus ... it is the way the national company has decided to distribute a product that they have FULL RIGHTS to distribute any way they want - or not at all.



Those that want to break the system are just interfering with free enterprise. There isn't a compelling reason for the government to override the affiliation contracts of the networks/affiliates. There is no constitutional right to view the product being offered.

#44 OFFLINE   James Long

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Posted 19 July 2010 - 11:50 AM

While there are good arguments on both sides of this issue, the one thing that is broken is the antiquated DMA system used to determine "markets".

This is one area where I believe change IS needed. DMAs do not match the actual distribution areas where the affiliates have the right to broadcast the content. Cable doesn't follow the same rules as satellite ... they don't worry about DMAs and can (and in some cases MUST) carry stations from what would be another DMA.

Leveling the rules between cable and satellite so satellite at least carry the same channels that cable carries is important. A local station should be defined not only as any station within the reasonably arbitrary DMAs but any station that has predicted coverage of the customer. This could be broken down to zip code or county but technology has reached the point where it is possible to be more granular than 210 markets.

This would not violate the private affiliation contracts ... it would not extend the stations any further than they already have the right to broadcast. It would just deliver the content via satellite to the same people who could get it OTA or via cable.

#45 OFFLINE   runner861

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Posted 19 July 2010 - 12:00 PM

This is one area where I believe change IS needed. DMAs do not match the actual distribution areas where the affiliates have the right to broadcast the content. Cable doesn't follow the same rules as satellite ... they don't worry about DMAs and can (and in some cases MUST) carry stations from what would be another DMA.

Leveling the rules between cable and satellite so satellite at least carry the same channels that cable carries is important. A local station should be defined not only as any station within the reasonably arbitrary DMAs but any station that has predicted coverage of the customer. This could be broken down to zip code or county but technology has reached the point where it is possible to be more granular than 210 markets.

This would not violate the private affiliation contracts ... it would not extend the stations any further than they already have the right to broadcast. It would just deliver the content via satellite to the same people who could get it OTA or via cable.


Why should affiiliates be protected when their programming is not even available OTA throughout the market? The Monterey-Salinas market is a large and hilly market, although sparsely populated. There are areas where a viewer is many miles away from the transmitter and cannot receive reception. There are other areas where a viewer may be only five miles away from the transmitter, yet still cannot receive a signal. Yet the local stations will claim these locations, even though they are not really providing service to the locations. Those viewers are forced to purchase and pay for satellite or cable in order to receive "free" tv, with some of that money going to the local station. Ethically and morally, the local station deserves no money in that situation. They are supposed to be providing a free service to the viewer. Viewers are burned time and time again by these rules that protect local stations far beyond what is reasonable.

#46 OFFLINE   runner861

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Posted 19 July 2010 - 12:06 PM

And then Dish Network can get a subscription to DirecTV, pick up DirecTV's channels and rebroadcast and repackage them onto the Dish Network system.

So instead of paying millions of dollars to ESPN, they just need to spend about $100 a month on DirecTV and rip and rebroadcast. That should save Dish Network a good $42 million a month, which is probably much more than what the local stations are receiving in agregate. After all, "we need to stop protecting certain stations."

And the only entities protecting "certain stations" are the networks themselves.


The comparison is not on point. DirectTV is not a free service, so taking it and retransmitting it without permission would be video piracy. OTA is free, or at least it used to be. The local stations and the networks are doing their best to say that it is free, but at the same time to make sure that it really is not free.

Gee, the local stations and networks talking out of both sides of their mouth? What a surprise! Just like Congress and the courts, who have been talking out of both sides of their mouth on this and every other issue for years.

#47 OFFLINE   Greg Bimson

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Posted 19 July 2010 - 12:21 PM

I couldn't care less what some study said. It's irrelevant. What people say in a study and what they will actually do are two different things. Besides, "studies" are routinely rigged to achieve the result that the organization doing the study wants.

And although I can somewhat agree that studies can be rigged, the reality is that people expected their cable system to provide the local channels. Ditch the antenna and get all these local channels, as well as some of this other programming. Yet none of the money paid by subscribers to the local cable company was going to the local channels...

I am advocating importing distant stations in addition to continuing with the local stations. Advertising will continue to support the networks and the stations. Why should broadcasters, who are transmitting a "free" product, then be allowed to charge for it when it is rebroadcast by a satellite company or cable company?

The question is backwards...

Why does a satellite or cable company need to retransmit a "free" product? Could it be that without the "free" product people won't subscribe? All one needs to do is point to the passage of the SHVIA back in 1999, when DBS satellite numbers went from less than 8 million subscribers without local channels to now more than 30 million in 2010 with local channels. The reality on that point itself should be astounding. Dish Network knew they needed access to network programming in order to compete; DirecTV worked with the NAB to provide the framework to get local programming including network affiliates available to satellite consumers.

These distribution companies obviously need the local channel product. Yet these distribution companies, according to some, should be raking in billions of dollars a year and providing none of that money to these local channels. Or better yet, create laws so that not only do those local channels receive no money, but then also have all of their exclusive contracts with their programmers completely demolished so that they are no longer exclusive.

#48 OFFLINE   James Long

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Posted 19 July 2010 - 12:21 PM

Why should affiiliates be protected when their programming is not even available OTA throughout the market? The Monterey-Salinas market is a large and hilly market, although sparsely populated. There are areas where a viewer is many miles away from the transmitter and cannot receive reception. There are other areas where a viewer may be only five miles away from the transmitter, yet still cannot receive a signal. Yet the local stations will claim these locations, even though they are not really providing service to the locations. Those viewers are forced to purchase and pay for satellite or cable in order to receive "free" tv, with some of that money going to the local station. Ethically and morally, the local station deserves no money in that situation. They are supposed to be providing a free service to the viewer. Viewers are burned time and time again by these rules that protect local stations far beyond what is reasonable.

If these OTA viewers can pick up an out of market station great ... but getting that feed via satellite or cable? If the only way to get a signal of that network is via satellite or cable why not have it be the affiliate who actually holds the distribution rights to that area?

You'd rather interfere with the network/affiliate agreements and import signals from wherever. "Ethically and morally" we shouldn't be encouraging violation of contracts. If due to terrain and RF issues the only way to get that content is via cable/satellite fine ... just let it be the affiliate who owns the rights to that viewer.

(If an out of market affiliate happens to have overlapping OTA coverage that would qualify it for carriage - if my rules were in place. Under the real rules the out of market would have to be "significantly viewed" to gain satellite carriage. Secondary to any in market station who holds the rights.)

#49 OFFLINE   Greg Bimson

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Posted 19 July 2010 - 12:23 PM

DirectTV is not a free service, so taking it and retransmitting it without permission would be video piracy.

Without permission of what company?

#50 OFFLINE   James Long

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Posted 19 July 2010 - 12:26 PM

The comparison is not on point. DirectTV is not a free service, so taking it and retransmitting it without permission would be video piracy.

Greg's suggestion was that DISH subscribes to DirecTV and uses that source for their feed. Not piracy (although a commercial subscription would be required as a regular subscription is licensed for private in home use). DISH would be paying someone for the service.




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