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Guest Message by DevFuse

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GUEST EDITORIAL: Joining Forces to Battle Retrans

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3 replies to this topic

#1 OFFLINE   Nick


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Posted 08 February 2006 - 06:05 AM

"ACA estimates that retrans
adds $500 to $800 million
to the cost of basic cable"

By Matthew M. Polka - President, ACA

In Washington, D.C., everyone has an issue where their
proverbial ox is getting gored. Video and telecommunications
are no exceptions. You show me an issue, and I'll show you
ten different groups that have a unique take on each one.

That's why it's so difficult for lawmakers and regulators to
act because they have to pick among complicated views and
usually among groups and concerns they respect. But have you
looked in the news lately on retransmission consent issues?
Something downright unprecedented is happening.

The American Cable Association (ACA), EchoStar, National
Telecommunications Cooperative Association (NTCA), RCN
Corporation, Organization for the Promotion and Advancement
of Small Telecommunications Companies (OPASTCO), Broadband
Service Providers Association (BSPA), and others are all on
the same side!

Each one of these diverse and competitive groups wants
retransmission consent reform. They want Congress and the FCC
to change the current retransmission consent and exclusivity
rules to break up the power of the media and programming
conglomerates that use today's broadcast carriage rules to
force content and cost onto consumers, whether they like
it or not.

Family and consumer groups are there too. Consumers Union,
Consumer Federation of America, Parents Television Council,
Concerned Women for America, and other media access groups
are also fighting the scourge of media consolidation and the
impact on consumers. And others are joining the fight.

What are all of these groups fighting together against?

"The chorus against the retransmission
consent rules and the media conglomerates
and broadcast groups is growing."

The media conglomerates' and broadcast groups' escalating
retransmission consent demands are resulting in higher
costs, less choice, and carriage of unwanted channels that
many consumers find indecent.

Why are all of these groups working uniquely together to
fight this common cause?

Because they and their members don't own programming. They
on't have a financial interest in it. They can speak freely
to represent their customers and to tell Washington the
harm that federal broadcast carriage rules have caused when
put in the hands of the media conglomerates.

On the other side? Those that have an enormous financial
interest to protect.

Disney-ABC, Viacom-CBS, Fox-News Corp., General Electric-NBC,
major broadcast groups like Sinclair, Hearst-Argyle, Nexstar,
Gannett and others. Month after month these groups use their
market power and leverage to extract hundreds of millions
of dollars from consumers in the local market, all in the
name of protecting "localism."

This is cynical. How does forced carriage of unwanted channels
and sharply rising costs to consumers preserve localism? It
does not.

Besides, if these conglomerates and broadcast groups really
wanted to protect localism and not worry so much about
feathering their financial coffers, then they could do one
thing that would solve the problem - elect must-carry instead
of retransmission consent. But they don't do that, because
they don't get paid for must-carry.

In the current round of retransmission consent, ACA estimates
in our members' service areas alone that retransmission
consent demands from the conglomerates and broadcast groups
added between $500 and $800 million to the cost of basic
cable. This amounts to a transfer of wealth from our rural
customers to corporate headquarters in Los Angeles, New York
and elsewhere.

The broadcast groups and conglomerates say that Congress and
the FCC can't give cable and satellite operators more choice
to create packages of tiers that would better suit their
customers' needs and wants. That would destroy programming
diversity, they say. Yet the networks increasingly sell
Desperate Housewives, CSI and other sports and entertainment
programs on an a la carte basis on IPods.

Last week an independent study issued by Arlen Communications
confirmed that broadcasters are exploiting the current
retransmission consent regime. The study describes how
broadcasters' use of exclusivity and escalating demands are
hurting consumers, and, in some areas, impeding the rollout
of broadband.

...broadcasters should be paying...for
carriage, not the other way around

Another key point from the Arlen study - broadcasters gain
more than $4 per subscriber per month in advertising revenues
from the subscribers delivered by cable. This suggests that
broadcasters should be paying cable for carriage, not the
other way around.

To remedy these problems, Congress and the FCC must reform
the retransmission consent laws in three ways:

First, when broadcasters seek a price for retransmission
consent, give video operators a "right to shop." Washington
must break down the barriers of exclusivity so that the
marketplace can moderate retransmission consent demands.

Second, end forced tying and bundling through retransmission
consent. The law should prevent media conglomerates from
holding local broadcast signals hostage for carriage of
affiliated channels.

Third, apply the FCC's News Corp./DirecTV conditions to
all retransmission consent negotiations. Under the FCC
conditions imposed on the DirecTV deal, Fox cannot pull
its signal during the course of negotiations or arbitration.
This single condition has made those negotiations more
orderly and reasonable.

The chorus against the retransmission consent rules and
the media conglomerates and broadcast groups is growing.
And it's getting louder.

Matthew M. Polka is President and CEO of the American Cable
Association, which represents the interests of small and
independent cable operators. ACA is based in Pittsburgh.

www.SkyReport.com - used with permission

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#2 OFFLINE   kenglish



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Posted 14 February 2006 - 09:15 AM

Doesn't wholesaler-to-retailer markup add a lot to the cost of groceries, appliances, cars, fuel, and every other product?

If they are telling the truth when they say they "need" the local stations' signals in order to stay in business, then why do they expect to get them for nothing? Detroit and Tokyo don't give cars away to the dealers, and farmers (never mind....let's say food processing companies...) don't give away food to the stores. Why should the station's buy programming, then have to give it away to the re-sellers?

#3 OFFLINE   FTA Michael

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Posted 14 February 2006 - 10:37 AM

If they are telling the truth when they say they "need" the local stations' signals in order to stay in business, then why do they expect to get them for nothing?

Because any local guy with a decent antenna can get that signal for free. Because the local stations have been licensed by the public to serve us in exchange for exclusive use of their signal frequencies.

I don't know that how fair it is to resell something that you get for free without giving the originators a piece of your profit. But I believe the resellers have a point, especially if adding lots of extra shopping subchannels (for example) forces infrastructure improvements or bumps paying channels off the system.

That's why we have representatives to wisely judge and balance the arguments to see what's fair to all parties, including the viewing public. ;)
Yes, FTABlog is active again. Why do you ask?

#4 OFFLINE   agreer



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Joined: Apr 07, 2006

Posted 15 April 2006 - 06:15 AM

But I believe the resellers have a point, especially if adding lots of extra shopping subchannels (for example) forces infrastructure improvements...

Great point, but I have to say, D*s recent move to the mpeg-4 platform is a good thing brought on by all of this, the dishes with 4+ LNBs are getting a little rediculus, at some point you may as well just get a c-band dish and put a D* LNB inside the feedhorn. Give me the 18-20 inch dish with no more than 2 LNBs (preferably in the same housing ala Dish 500), these ~25-30 inch dishes seem a little obserd.

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