Digital TV Facts: The Latest

The FCC isn’t going anywhere, but Slate’s Jack Shafer is beating the drum for a private-property approach to spectrum management in place of government regulators. While spectrum is, indeed, no longer so scarce a resource, thanks to technological innovations, I’m not ready to bid farewell to the commission. The FCC is far from perfect, but its career experts do a reasonable job of directing traffic and holding chaos at bay.

The FCC’s most prominent shortcoming, noted by Shafer and common to nearly any entrenched bureaucracy, is its inability to respond to the future.

On the political side, FCC Chairman Kevin Martin is still out promoting multicast must-carry, a scheme that would give even more cable channel slots to local broadcasters. Why is he doing this? The agenda has almost nothing to do with spectrum allocation, but probably more than a little to do with the allocation of political spoils in Washington, where the interests of broadcasters are well represented. One could argue that Martin, who maintains that multicast must-carry would help the digital TV transition, is merely promoting broadcasting as a going concern. But why should the FCC be in the promotion business? Why should the federal government stack the decks in favor of a particular form of video distribution?

Network TV shows are increasingly available via the web, video-on-demand and other platforms, chipping away at the local-affiliate paradigm that dates to the 1940s. What Martin should do is open a national dialogue concerning local TV broadcasting’s slow slide toward irrelevance, which appears to be picking up speed. The goal should not be the preservation of local broadcasting in its current form forever. The FCC should not prop up an aging business model that may no longer make sense or serve the public interest.

Locally-produced video programming, especially news, can serve a public purpose, granted. But why should the owners of giant broadcasting towers continue to enjoy preferred access to the local video market? The scarcity argument doesn’t work anymore. You and your neighbors can produce your own video and upload it to YouTube, Revver or your very own web site. Citizen video still lacks net neutrality protections, but the FCC and Congress continue to protect dominant broadcasters through must-carry rules.

• Links: Slate, Broadcasting & Cable

Americans’ access to internet content and subscription TV services are two key issues at stake today as the Senate Commerce Committee prepares to vote on a major revamp of the nation’s telecom laws. Senators have proposed more than 200 amendments, and the telecom, cable, media and technology industries will be watching closely.

Network neutrality advocates, including Sen. Daniel Inouye (D-Hawaii), remain unhappy with the latest version of the bill from Commerce Chairman Ted Stevens (R-Alaska).

“The new draft’s provisions on net neutrality utterly fail to protect consumers and preserve an open Internet,” Inouye said in a statement.

“Under the current language, network operators will have the ability to dictate what the Internet of the future will look like, what content it will include and how it will operate.”

Streamlined video franchise procedures could speed the arrival of new television services provided by telephone companies in more American homes. The danger is that existing consumer protections will be stripped away and promises of increased competition will not benefit all Americans:

On video franchising, Inouye and Sen. Conrad Burns, R-Mont., have sought to require Bell operators to provide pay-television service to all neighborhoods, regardless of income.

Along the same lines, Sens. John Kerry, D-Mass., and Barbara Boxer, D-Calif., plan to file an amendment to require that new providers build out their high-speed networks throughout entire franchise areas. “Kerry and Boxer feel that the Senate should not legalize cherry-picking of cable service,” a Kerry aide said.

How much can a 159-page bill, thick with regulatory arcana, really matter? Well, just look at how much is being spent by some of the industries attempting to influence the political process:

Verizon Communications, SBC Communications Inc., AOL Time Warner, General Electric Co./NBC, News Corp./Fox, Viacom Inc./CBS, Comcast Corp., Walt Disney Co./ABC, and the National Association of Broadcasters, the National Cable & Telecommunications Association, and the United States Telecom Association together gave nearly $45 million in federal political donations since 1997. Of that total, $17.8 million went to Democrats and $26.9 million went to Republicans.

These eight companies and three trade associations also spent more than $358 million on lobbying in Washington, since 1998, when lobbying expenditures were first required to be disclosed.

Much more than just money is on the line, according to the nonpartisan government watchdog Common Cause:

What is at stake is not just how much consumers pay for access to the Internet or their cable TV, but rather the fabric of American civic discourse—how ideas get communicated or are stifled, whether citizens will have a way to get the information they need to govern themselves.

Stevens believes he has the votes to pass the bill, according to Reuters.

• Links: internetnews.com, National Journal, Report on fallout from 1996 Telecom Act from Common Cause [pdf], Reuters

We have a fresh example of why local TV doesn’t always have to mean broadcasting, courtesy of public TV’s Robert X. Cringely. In the new world of IPTV, he maintains, local connections—between humans, as well as between wires—can make a world of difference:

The Internet television story, even as written here in columns going back as far as the late 1990s, pushed the idea of enabling the aggregation of widely-dispersed viewing audiences, allowing programming to thrive that might not be successful on any local station, much less on the national network. A good example is NerdTV, which wouldn’t attract enough viewers on most PBS stations to even generate a rating, yet when offered as an Internet download, drawing from a global population, makes some pretty good numbers. But there is no concept called “local” in this aggregation model, so stations tend to feel threatened by it; if the network can reach local viewers directly, what need is there for a local station?

But it doesn’t have to be that way, because the supposed strengths of centralization aren’t really strengths at all when viewed in terms of the much more imposing issue of bandwidth costs, where all the advantages are local.

PBS station managers could slash their bandwidth costs, Cringely suggests, by installing video servers right at their local broadband providers’ data centers. That’s because cable and phone companies can handle traffic more cheaply while it remains on their own network.

He also has schemes for revenue sharing, content trading, and—brace yourself—a nonprofit video-streaming service bureau to be administered by PBS. His theory raises more than a few questions (once you put “local” content on the world wide web, the whole world has a way of finding it), but it will take more than a little wild-eyed creativity to secure a future for local television. You can see why Cringely files these columns under the word Pulpit.

Earlier:
• TV localism retains its defenders, if not its logic
• Would TV networks use VOD…and bypass affiliates?
• Will TV’s new rules serve big players or public?

• Link: I, Cringely

If ABC can stream ad-supported prime-time shows on the internet one day after they air, and make money doing so, why wouldn’t the network do the same with video on demand?

That question—and it’s a dangerous one, potentially—is posed by Michael Willner, CEO of cable operator Insight Communications. For now, it may be just hot air. But let’s for a moment take this exercise, however speculative, up to the next level: If a broadcast network can distribute its shows via the net and VOD, for how long does it remain a broadcast network? For how long does the network still need its affiliates?

Affiliates won’t go away anytime soon. They have local ties and broad audience reach, including mandated cable carriage. They may soon gain additional cable channel slots for multicasting—slots that are otherwise very difficult to come by. They have 24 hours of air time to fill each day, and when they aren’t showing network programming, they’re promoting it.

But what favors affiliates most, perhaps, is sheer inertia. Our whole system of television, initially designed with an inherent bias in favor of local broadcasting, has grown up around them. Networks are in the habit of distributing their programming in this way, and audiences are in the habit of watching it this way.

Habits can change, though, and eventually they will. That process has probably already begun. I really wonder about this: Are affiliates on the verge of a long struggle for their very survival?

Earlier:
• Will TV’s new rules serve big players or public?
• To make multicast TV local, stations need viewer content

• Link: Broadcasting & Cable

The way we watch television for many years to come may be determined by lobbying and rulemaking currently underway in Washington. FCC chairman Kevin Martin, according to several reports, is ready to propose new regulations that would give local stations additional channel slots on cable systems. In Congress, meanwhile, new telecom legislation is in the works, including proposals for national video franchises.

Why should cable companies be required to carry local stations’ multicast channels? The FCC, broadcasters and some members of Congress have various legal theories or rationalizations. Near as I can tell, they come down to this:

1. The public interest is served by:

• the availability of free television, which provides news and information to the public;

• the availability of local television, which informs viewers about their local communities;

• the availability of a diverse television programming, which gives voice to many points of view and enriches public debate.

2. Multicast must-carry fosters the continued existence of free, local TV while enhancing programming diversity.

While I pretty well agree with point No. 1 (in theory, anyway), I do not see multicast must-carry as the best or only way to accomplish it.

Let’s stop and think about this. A multicast carriage requirement would just fast-track a new, hastily constructed wing onto the sprawling muddle of existing broadcast regulations. If we’re to have sensible regulation that truly serves the public, regulators must start to recognize over-the-air TV in its current context—shrunken, if not marginalized—and stop seeing it as the dominant television platform that it was in the 1950s. Let me be clear, though: What’s shrunken is the reception of TV over the airwaves, which is down to perhaps 15 percent. Broadcasters are not marginalized, however; they remain very powerful, largely because they were granted privileged access to most viewers through cable TV and now enjoy wide carriage via satellite TV services, too.

From its earliest regulation, broadcast television was treated as a scarce resource because of its use of public spectrum, which is finite. But television, especially in the broader sense of any video content accessible from our homes, is no longer a scarce resource, and it no longer even requires use of the broadcast spectrum.

Broadcast television may seem to be modernizing—after 13 years and billions of dollars, TV broadcasts will go all-digital in 2009. But let’s be honest: we aren’t ushering in “Tomorrow’s TV Today!”—as the FCC breathlessly calls it on its promotional website for DTV. In techie terms, we’re cutting over from an old legacy system to a newer legacy system. But we’re still on big iron. Broadcast TV is the equivalent of a mainframe, controlled by various sys admins in Washington. And despite the interactive capabilities built into digital broadcast TV, most Americans watching TV over the air will use their TV sets as dumb terminals. What’s more, the cutover to digital TV is unlikely to lead to a resurgence in over-the-air viewership, and may in fact contribute to further declines.

Is it not odd, if not bizarre, that simply because some small slice of a community watches a particular television station over the air, the federal government gives the owner of that station the right to claim space on a cable system? Video over the internet, though dwarfed by TV, is growing at a very fast rate. When 15% of people watch net video, some of which is locally produced, will we then say that YouTube should have guaranteed space on every cable system?

The changes in the video section of the marketplace of ideas need to be recognized, and the nation’s regulatory environment must be sorted out and made to serve today’s public. If we truly value free, local, diverse TV programming, we should insist that our representatives in Washington find a way to make free, fast broadband available to all Americans, while enshrining net neutrality principles that preserve an open internet. Technical challenges remain before internet video can challenge broadcast TV, and broadcast TV won’t, and shouldn’t, go away. But rather than doling out special favors, we need to look to broadcasters to justify their own relevance. Most have more than sufficient resources to ensure their continued viability.

As new legislation begins to take account of changing technology, will the public interest take center stage? Not with this Congress, it seems. Moves toward telecom “reform” are being driven by the demands of industry lobbyists, especially representatives of large phone companies seeking national video franchises that would compete with cable TV. Here, from Drew Clark, is a troubling tidbit:

If Bell advocates of the [House] telecom measure are not able to generate support against a neutrality amendment, the measure could slip to next week, said industry sources.

Telecom lobbyists want to crush net neutrality before allowing legislation that regulates telecommunications companies to go forward. This is an outrage.

Most Americans watch TV for several hours each day. Do you suppose many are even aware of what’s taking place? I wonder at our chances of getting new regulations that will benefit the public in other than incidental ways.

A plan to give additional cable channel slots to local digital TV stations could be put to an FCC vote on June 15, according to Multichannel News. It’s a big giveaway, and apparently Kevin Martin is in a big hurry. Not so fast, says the Campaign Legal Center, an election-watchdog organization. The nonpartisan group is again calling on the FCC to require broadcasters to commit to providing local public-interest programming before considering such a proposal:

The Commission’s formal rulemaking process on the public interest obligations of broadcasters in the digital age has already dragged on for more than six years without any rules being issued. To proceed with digital multicast must-carry rules without having enacted clear, meaningful public interest obligations would put the cart before the horse yet again at the expense of the American public.

Will the FCC grant these new privileges across the board—even to those stations that, according to recent reports, have broadcast “fake news” reports provided by corporate PR firms or the Bush administration, without disclosing their origin?

Local television broadcasters can play a key role in informing their communities—and a great many do. If they want to remain relevant in a world of expanding video choices and platforms, local content is a core strength they can build on. To grant new privileges without new commitments would be a huge mistake.

Earlier:
• Digital TV and the public interest
• To make multicast TV local, stations need viewer content

• Links: Campaign Legal Center, Multichannel News, about.com

We know what’s prevented the FCC from mandating cable TV slots for the new local digital multicast channels (an issue chairman Kevin Martin now wants to reopen). Not what, but who: The two Democrats on the FCC who, until last week’s Senate confirmation of Bush nominee Robert McDowell, had equal say with Martin and the commission’s other Republican member.

Public interest requirements for local broadcasters should take precedence over cable carriage of the new broadcast television channels, according to Democratic commissioners Jonathan Adelstein and Michael Copps. I agree. Station owners’ demands for cable carriage of their primary television signals already have a privileged legal status, predicated upon the notion that local TV serves a public purpose. (A countervailing notion is predicated upon the actual viewing of local television programming.)

Without strong, enforceable local-content requirements, why should the FCC carve out more cable real estate for broadcasters? What stands in the way of more local programming is the cost of producing it. Weather and local news (much of it repurposed) fill air time on some multicast services, but the primary source of content will probably be—as with most broadcast programming— networks and syndicators.

What if broadcasters drew on the talents of their viewers? Content produced or selected by users is fueling the internet video boom—and threatening further erosion of local-TV viewership. As networks and producers gain new ways to reach into viewers’ homes, bypassing the affiliate gatekeepers, local stations will feel increasing pressure to justify their existence. The barrier to wider acceptance for YouTube and its kin, and internet video in general, is the perceived inconvenience in terms of platform and usability, not to mention bandwidth. But what’s easier to use than broadcast TV, which happens to have abundant bandwidth? Independent-minded creators of net video might cringe at the very thought of being coopted by TV. But many would relish the opportunity to put their work before more eyeballs.

If viewer-produced mashups found a mainstream audience, perhaps a few of the powers-that-be in television—or Congress—would even think twice about decimating citizens’ fair-use rights by enacting the broadcast flag.

Would down-and-dirty user production values ever make it on a broadcast channel? I’ll be the first to admit that I don’t know. But user-created content needn’t cost stations anything, and where better to experiment with innovative forms of local programming than on these new channels that most people have yet to even discover?

Earlier:
• Digital TV multicasting: More local channels for free

The most striking evidence this week of the gathering waves around the video-distribution marketplace is the increasingly tinny ring of proclamations from the defenders of the status quo.

Seattle’s City Council renewed Comcast’s cable TV franchise agreement, under which the company pays the city 5 percent of gross revenues and spends millions more on arts and public-access funding. As newspaper columnist Bill Virgin notes, it is a process that Comcast negotiates in thousands of cities and counties around the country.

As AT&T, Verizon and other phone giants launch their own subscription video services, they would rather deal with a few Congressional committees than 10,000 town clerks. Who wouldn’t?

Cable companies, that’s who:

“We are comfortable with the existing structure,” said Mark Funk, a spokesman for the Broadband Communications Association of Washington, whose members include Comcast and Millennium Digital Media (which also has a franchise agreement with the city). “This is how we’ve operated for the last 30 or 40 years.”

(And why not? Comcast profits tripled in the first quarter.)

Localism is under fire in broadcast TV, too, with affiliates’ hackles raised by networks releasing prime-time shows over the internet.

Jack Perry blogged about a meeting with a “major dot-com player” who crossed a line with him by calling network affiliates “irrelevant.” Affiliates are taken for granted, Perry writes. “The model still works.”

But how long can such a model persist when it exists primarily for historical reasons? The Ozymandias pose won’t work anymore.

The great big draft telecom bill released by Senate Commerce this week comes with a big bloviating name, the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006 (that’s its SHORT TITLE, actually). But in its pages what you will find are many amendments to the Communications Act of 1934, called into being by FDR and modified several times since, which established what is now the FCC. Airwaves being a scarce commodity, it made sense to establish a structure that would provide radio, and eventually television, service to the entire nation. And though it wouldn’t have to happen this way, the U.S. broadcasting system was designed to favor localism. We have reaped many benefits from it, too, especially during the years when local stations took seriously their obligation to inform local communities.

But when programming can be distributed over not only cable and satellite, but IP networks, and billions are spent laying fiber, where is the scarcity? (That doesn’t rule out oligopolistic tendencies, granted—especially without effective net neutrality protections.) The over-air TV audience is down to about 15 percent. Big marketing and packaging apparatuses will always exist. But you no longer need a TV transmitter to provide local video content. You no longer need a TV to watch it.

Local TV has already begun the process of its unraveling. There will long be a place for it—hell, Western Union didn’t stop sending telegrams until this year. But I think we can no longer imagine that this isn’t happening.

• Links: Seattle Post-Intelligencer, Chief Titan WeBlog