After nearly 3 years of planning and what seems like a decade of breathless "We're the HD Leader" hype, DirecTV has finally released the first wave of its expanded national HD channel lineup, with 21 new channels lighting up early Wednesday morning.
Kevin Martin, chairman of the Federal Communications Commission, gives an exclusive interview to Broadcasting & Cable, covering a wide range of topics, including a la carte cable TV pricing, the state of the digital television transition, how broadcaster public interest obligations should be defined and monitored in the digital age, and the potential for use of "white space spectrum" by unlicensed devices.
But perhaps the most interesting ground covered in the lengthy interview was Martin's discussion of multicasting, and his advocacy for mandatory carriage of all digital program streams by cable television providers.
There are more than enough bad ideas enough to go around, But then, there are bad ideas that originate within our federal government, and while that means they tend to be fewer in number, they also tend not to die until some determined bureaucrat, legislator or judge figures out a way to foist them onto the American public.
So far, the FCC campaign for "a la carte" cable pricing, spearheaded by current FCC head Kevin Martin, is one of those bad ideas that has not yet morphed into the law of the land. But that doesn't keep Martin from coming back again and again with new twists on how to make it happen.
Martin's latest run against the ticking clock that is his term as FCC chairman would add a new wrinkle to a la carte pricing, in which cable companies would be allowed to drop from their expanded basic packages any channel where the programming provider required payment of more than 75 cents per month per subscriber. It appears that the thinking is that would result in lower prices for the most popular channels, and bring overall subscription prices down, which would presumably make it easier for cable companies to offer "a la carte" pricing.
While it's near enough impossible to argue against the desirability of lower cable TV prices, government intervention is anything but a sure-fire way of getting there. After all, the FCC has been responsible for regulating the cable industry for more than 20 years, and prices have consistently and impressively outpaced the Consumer Price Index during that reign. For example, the Bureau of Labor Statistics reports that cable TV prices have risen 77 percent since 1996, roughly twice the consumer inflation rate.
The problem with government and regulation is that it often starts with a flawed understanding of how markets and competition function, which leads to unintended consequences that typically make things worse, not better. There's plenty of evidence that this is true for the FCC and cable pricing.
People imagine that an a la carte mandate would mean that if they're currently paying $50 per month for 50 channels, then they should be able to pay $1 per month for one channel. But that doesn't make any sense. Switching a given customer from 50 channels to 1 channel doesn't reduce costs (the other 49 channels would presumably still be produced for other viewers), so why should the customer expect a lower bill? If anything a switch to a la carte actually makes things more expensive because in some cases cable companies have to install new equipment and set up a more complicated ordering and billing system to keep track of who had signed up for which channels. In reality, what would happen is that the cost of each channel would go up a lot. Instead of $1/channel, cable companies might charge something like $8/channel, with each customer choosing 6 channels on average. The result would be that most people would pay about the same for a lot fewer channels.
It's a mistake to think of bundling as being "forced" to pay for channels we don't want. After all, non-sports fans don't get outraged about the fact that they're "forced" to take the sports section with their morning paper. The right way to think about it is that you're paying for the parts of the bundle that interest you, and the rest of the paper is a freebie that doesn't cost you anything extra. It would be silly to demand that newspapers price each section of their paper separately and let you do without the sections you don't want. It's equally silly to demand that cable companies not show you channels you're not interested in watching, since those aren't costing you anything either.
If there's anything I've learned from more than 25 years of experience with broadcast (one-way) networks, you never have enough bandwidth to deliver all of the information you'd like to provide or that your customers expect. And while it's true that satellite operators such as DirecTV and DISH currently appear better positioned than cable in the bandwidth capacity stakes, I'd need more than rose-colored glasses to see that as anything other than a short-term aberration against the historical trend.
That's why I'm a bit skeptical about suggestions that satellite TV operators will begin be offering 1080p programming within the next 3 years. But that's what Eric Cooney, CEO of broadcast equipment manufacturer Tandberg, sees when he looks in his crystal ball, as reported by TV Predictions:
Cooney, whose company provides picture compression services, says satcasters are most likely to introduce 1080p because they have more system space than the cable operators.
"Todayís broadcasters have concentrated on 1080i or 720p and this will change. The Holy Grail is to shift to 1080p at 50/60 Hertz. Our current partners are asking us for this additional functionality in order to deliver a superb customer experience and operational advantage," he told Rapid TV News.
Make no mistake, I'm ready for DirecTV to start sending me 1080p programming. I hate interlaced video, regardless of the resolution, and I truly believe the biggest mistake made in the creation of the US ATSC system was to burden it with the tortured legacy of interlaced video formats. I also recognize the potential the competitive advantage here -- just look at the relatively new and growing focus on image quality that both satellite and cable competitors are making central to their advertising messages.
Still, I think this story is more about an equipment manufacturer talking up a market for future sales than meeting any near-term need by its clients. But this is one time I'd truly enjoy being proven wrong.
Financial news network CNBC is planning to launch a new high-definition service called "CNBC HD+" later this fall. But the network's lawyers are likely going to need a crash course in the applicable truth-in-advertising laws, because CNBC's high-definition plans call for no live high-definition images -- not at launch and apparently not ever.
Instead, the technical boffins at CNBC plan to take its current 4x3 aspect ratio analog broadcast feed and scale it to 1080i. It will then place the upconverted 4x3 image on the left side of the widescreen picture area, with the remainder of the space on the right used to display additional news headlines and financial market graphics.
Although CNBC says it will offer some documentary programming in HD, that's not what viewers expect when they hear CNBC HD+. CNBC should be calling its new service "CNBC Widescreen+" -- and even that's a stretch (pun intended).
Selling the NFL Network should be one of the easiest jobs on the planet -- sort of like controlling the exclusive iced water franchise for Death Valley.
So, maybe the NFL is just trying to make its sales executives sweat out every penny of their commissions, because it's definitely making the distribution of the NFL Network a lot more difficult than it should be.
You see, the NFL is demanding that the only way a cable, satellite and teleco Pay TV provider can offer the NFL Network to its customers is if they make it part of one of the basic analog or digital packages, instead of including it in a speciality sports tier that could be selected for an additional fee by interested subscribers.
There's no question that the NFL Network's strategy, if successful, would maximize the NFL Network viewer numbers and ratings. But achieving that objective would punish consumers who have no desire to watch more (or any) NFL games or NFL Network programming, because the cost of providing it (roughly around 60 cents per month) would be passed along to every subscriber receiving the basic package where it's included.
Mind you, I don't really blame the NFL Network for its strategy. It has the right to sell its product however it sees fit, and if Pay TV providers believe those terms are good for business, they'll presumably have no problem in signing on. But, in fact, that isn't the way this has played out, and cable systems in particular have resisted the NFL's terms.
So now, heading into the second season of the NFL Network, the NFL has decided that what it can't achieve through negotiation will be sought via government intervention.
I used to consider the technology of television to be amazing -- even magical.
But then I became an HDTV "early adopter" back in 1998, and a decidedly different perspective began to take root. Sure, there were lots of early operational teething pains and the relative lack of programming in the first few years of the transition to HDTV truly tested my patience. But at that point, it was perfectly understandable, because widespread consumer acceptance of digital television and HDTV was anything but a sure thing.
But that was then -- and this is 2007.
Now I wonder if broadcasters have any understanding at all of the opportunity they are fumbling away with their poor handling of the transition to digital television and HDTV.
The cable industry scored a decisive political victory Tuesday night when Federal Communications Commission chairman Kevin Martin had to dump a draconian digital TV plan that cable vowed to contest in court, perhaps rupturing the harmony needed by the industry-government effort to shift the nation to all-digital broadcast TV in early 2009 without a massive consumer rebellion.
After an 11-hour delay to the start of its monthly meeting, the FCC voted 5-0 at about 10 p.m. to require cable systems to distribute local TV stations that demand carriage in both analog and digital formats for a three-year period starting Feb. 18, 2009. Thatís the day after all 1,756 full-power TV stations must turn off their analog signals and rely exclusively on their digital feeds.
This somewhat arcane but important ruling applies mostly to smaller, independent local TV stations that might otherwise be omitted from local cable line-ups in favor of more popular non-broadcast programming. Analog "must carry" has existed as de facto law of the land, with a Supreme Court ruling backing it up, since the late 1990s. Now it is being extended to cover the potential fallout that might occur in the transition from analog to digital terrestrial broadcasting.
It's worth noting that the ruling on dual "must carry" does not appear to have any obvious impact on recent squabbles between the cable industry and broadcasters arising from broadcaster demands that cable operators pay retransmission fees for the right to deliver local digital stations to its subscribers.
Under "must carry" provisions, broadcasters have the option to declare for "must carry," in which case the cable system is legally required to include that station in its basic tier. However, those stations that do not declare for "must carry" have the option of entering into negotiations to be paid for carriage of their station signals. But if the two sides are unable to agree to terms, the cable system has no obligation to carry the station.
As a result, last night's FCC ruling is unlikely to slow the trend toward local stations demanding payment for carriage of digital signals.
But in addition to the "must carry" implications here, the FCC ruling has an important, and likely beneficial impact, for HD picture quality:
Lobbying pressure from the National Cable & Telecommunications Association forced Martin to yield not only on perpetual dual carriage but also on a second priority: Requiring cable systems to transmit "all content bits" in a digital TV signal, thereby eliminating the use of signal compression and statistical multiplexing that husband bandwidth.
There are several potential pitfalls that can undermine HD picture quality, but there's little doubt that one of the most annoying -- and unfortunately most common -- problems for full enjoyment of HD programming is cable and satellite subscription services that reduce picture resolution or transmission bandwidth (or both).
It's safe to say that nothing gets visitors to Internet-based home theater forums more agitated, more quickly than a discussion of HD picture quality that has been purposely compromised. And while there's a general recognition that all pay TV services throttle back picture quality to some degree in order to ration precious bandwidth for other purposes, DirecTV has come to be seen as Public Enemy No. 1 when it comes to this practice.
But now it appears that DirecTV's HD picture quality may be on the comeback trail, as online reports have surfaced that the company has quietly restored the Discovery HD Theater channel to full 1920 x 1080 quality.