[BC] HDTV

[Harold Hallikainen]

> Here's a philosophical question for the group:  Why is it OK for one of
> the national cable networks (ESPN-HD, HBO, or whatever) to seek and
> receive payment from cable companies for their HD product, but when a
> local broadcaster does the same, it's seen as trying to "extract" money
> from the cable system?
>
> The cable companies are making money selling our HD product to
> subscribers--they're not giving it away.  Why should we (TV broadcasters)
> simply *give away* the product they're selling?  If a person walks into
> Sears or WalMart, they can be sure that the retailer paid the manufacturer
> for the products on display.  Why is it any different in broadcasting?
> Also, keep in mind that local cable operators compete with broadcasters
> for local ad sales.  Why should we just give away our premium product to a
> competitor?
>


What we've ended up with is an interesting mix of must-carry and
retransmission consent. If the programming of the local station is so
valuable that a cable company will get more subscribers by carrying it (or
lose them if they don't), they are willing to pay for the programming (and
then need consent of the broadcast station (retransmission consent), which
often means the cable company pays the broadcast station). If they don't
think the subscribers will demand the programming of the local station,
they can decide to not buy it. Their decision to not buy it would normally
mean they would not carry it. It may be in the broadcast station's
interest, however, to have their programming carried by the cable company
even if the cable company is not willing to pay for it. Instead of the
broadcast station having to pay for that carriages (as in leased access),
the local broadcast station can demand must-carry.

So, what we end up with is a sliding scale of who pays what for what with
the limit at zero as to what the local broadcast station pays the CATV for
carriage, but no limit on what the CATV pays the broadcaster for the
programming.

Sounds fair to the broadcaster to me. The question becomes, however, what
purpose does the local broadcaster provide? I see them providing program
packaging (selecting which programs to carry), generation of local
content, and delivery. It appears the majority of households (though not
mine) have chosen another delivery supplier (CATV or DBS). What remains is
program packaging (which CATV companies do in their channel selection
process) and local content generation (which some CATV companies do).
Because most communities now have multiple video sources (local broadcast,
one or more CATV systems, two DBS systems, etc.), Congress, the FCC, and
the courts have decided (as I understand it) that each of these are
"publishers" instead of communications carriers. As such, they get to
decide what programs to provide and what to not provide. If they were
communications common carriers, they would not be able to make these
decisions. They would, instead, have to carry whomever paid them to be
carried.

By the way, the Senate Commerce Committee is currently considering how
much of a common carrier and how much of a publisher internet service
providers are in their Net Neutrality proceeding. A hearing on this was
held yesterday. You can view it at
http://commerce.senate.gov/hearings/witnesslist.cfm?id=1705

Harold


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