December 2008

Broadband Economics 101 - Focus on the economics, not the technology

[Commentary] Some ideas and attempts to provide broadband for the 100 million people (33 percent of the US population) who either do not have access to broadband or cannot afford today's offerings are well meaning, but they miss the mark. Someone has to pay for free access. Someone has to pay for the infrastructure, the devices and connection to the Internet. For someone to invest the money for all this, there has to be a reasonable return on the investment, OR the investment has to be paid for from some other source such as the federal government or with tax incentives for those who build the system. I believe we can achieve the goal of broadband to everyone only if we put together a government/private partnership and only if this partnership works together to expand wired, cable, fiber, wireless, microwave, and satellite technologies in a way that makes sense for those who invest and for those who are underserved. It makes no sense to me to keep throwing out portions of the wireless spectrum and hoping someone will finally figure out an economic model to make it work. It would be far better to find a way to use some common spectrum and share the cost of deployment with all of the parties concerned. Those who say the U.S. is behind much of the world in broadband deployment are correct. But it is not because of technology. It is because of economics. Many countries where broadband is more widely available are making government/private partnerships work. Isn't it about time we focus on the real issue -- the economics -- rather than the technology?

Failure at the FCC

[Commentary] Kevin Martin's reign of terror as chairman of the Federal Communications Commission can't end soon enough. Martin has abused his position of power to go after cable companies while treating telecommunications firms with kid gloves. While cable giants like Comcast are far from perfect, such uneven treatment makes it appear that Martin has other motives beyond the best interest of consumers.

Cable Ops Agree To Short Digital Migration Freeze

In a letter to Congress Tuesday, National Cable & Telecommunications Association President Kyle McSlarrow announced an industry plan to stop moving nearly all channels from analog to digital tiers during the first two months of 2009 to minimize potential consumer confusion about the federally mandated shut off of over-the-air analog TV signals on Feb. 17, 2009. Under the NCTA plan, cable operators that still have an analog tier in service plan to offer a low-cost basic tier as a one-year promotion, probably something akin to Comcast's $10 a month basic tier offer to new subscribers for one year. Consumers need to sign up for NCTA's low-cost plan from Dec. 31, 2008 to June 30, 2009. NCTA's plan also addressed analog-only consumers who are upset about renting a digital box to see migrated channels. NCTA's cable operator members intend to offer subscribers one free device (set-top box or adapter) to view analog channels that have been moved to digital. The device is free for one year for analog-only consumers who request one from March 1, 2009 to June 30, 2009. The channel migration freeze will begin on Dec. 31. Exceptions to the freeze include cable operators that need to free up channels to comply with FCC rules that require carriage of some local TV stations in analog and digital after Feb. 17.

FCC Gives 10 Stations More Time to Boost DTV Coverage Area

The Federal Communications Commission has granted 10 stations more time to boost their digital television coverage area before satellite operators get to test the signals and potentially import similar signals into those TV stations' markets. The FCC permits satellite subscribers/companies to test TV station signal strength and import similar out-of-market TV stations to viewers who do not get a sufficiently strong signal from the in-market station. But during the DTV transition, the DTV signals of a number of stations are not yet at full strength or coverage for various reasons and the FCC has exempted them from the requirement since that would allow the importation of signals to viewers who will eventually be getting the relevant in-market station. The commission has said it would be flexible about such issues and work with stations making the DTV switch.

NAB To Launch National DTV Hotline

The National Association of Broadcasters says it will create a national hotline to answer calls from viewers during the upcoming digital transition, which it estimates to be at about 2 million for the five days following the Feb. 17 switch, with up to a million on Feb. 18. NAB also said Tuesday it is producing an educational DTV video that stations can loop and run on their analog channels after the transition. A just-passed DTV nightlight bill allows broadcasters to continue an analog signal for 30 days past the Feb. 17 date for DTV education or emergency information.

Boehner Voices Concern Over Eshoo's Fairness Doctrine Comments

On Monday, Rep Anne Eshoo (D-CA) told the Palo Alto Daily Post, "I'll work on bringing [the Fairness Doctrine] back. I still believe in it," and adding that she would want it to apply to cable and satellite rather than just radio and TV. On Tuesday, House Minority Leader John Boehner (R-OH) responded, saying "The so-called 'Fairness Doctrine' would restrict free speech on the public airwaves, stifling dissent at a time when an open national dialogue about our country's future is essential. The American people do not believe the federal government should be in the business of dictating or restricting the content of political speech. I'm troubled by Rep. Eshoo's comments, and my hope is that President-elect Obama will speak out against efforts by members of his party to use their majority power to limit free speech and dissent." President-elect Obama has on more than one occasion let it be known that he opposed to the return of the doctrine, which required broadcasters to air both sides of controversial issues.

Cable Gets Biggest Ratings' Lift From Time-Shifting: Nielsen

Nielsen ranked TV shows by percentage increase in household rating due to time-shifting and total gain in household audience due to time-shifted playback. Only 3 of the top ten shows on the ratings gain list appear on broadcast TV. There weren't any cable programs among Nielsen's top 10 list of shows with the biggest increases in actual audience from time-shifted playback. Fox's American Idol on Tuesdays, which scores a 2.15 million gain in households, is first by this measure.

News You Can Lose

The perfect storm of readers and advertisers who are migrating away from print, added to a steep recession, is threatening to destroy newspapers as we know them. Papers now seem to be the equivalent of the railroads at the start of the twentieth century: a once-great business eclipsed by a new technology. But even as big papers have become less profitable they've become more popular. The blogosphere, which piggybacks on traditional journalism's content, has magnified the reach of newspapers. People use papers more than they did a decade ago. The difference is that today they don't have to pay for them. Because of that, we will soon see fewer newspapers in existence. Some big American cities will have no local newspaper. More importantly, we're sure to see a sharp decline in the volume and variety of content that newspapers collectively produce. In the near future, we're going to start getting what we pay for, "and we may find out just how little that is."

How long can newspapers keep delivering the news?

[Comentary] This might go down as the week that they took paper out of the newspaper business. Detroit's two daily newspapers announced Tuesday that they plan to reduce home delivery to just three days a week. The Detroit papers are gambling that these core readers will stick with them at least to receive the paper on Thursday, Friday and Sunday, the days it will still land on the doorstep. And the trade organization for newspaper editors scheduled an April vote on whether to drop "paper" from its name. The idea in both cases is to fully embrace the shift of many readers and advertisers to the Internet, where many news executives believe the business must stake its future, and to finally begin to break away from a 400-year-old delivery system. Bosses at the Detroit Free Press and Detroit News said they will save millions of dollars they would have spent to print and deliver their newspapers, which have been steadily losing circulation. Better to alter the delivery system, they argued, than to further cut the news staffs.

Whom Do We Trust? Online News and Newspapers

A study by TNS finds that consumers don't trust personal blogs, but they trust the news they get online at least as much as what they read in newspapers. "It's heartening to see how well online users are able to gauge their media," said Don Ryan, VP-technology and media at TNS, in a statement describing the results. "Whether using new or traditional media, trust of the source of information is paramount. Online blogs clearly have no real accountability. Although they may be a great source of entertainment and a useful source of information and reviews, they are clearly highly subjective. The move of traditional news media into the online space has ensured that the trust of traditional media has spread into online-only sources, too." The web and newspapers, however, got the highest scores of any media included in the research. TV news has the trust of 33%, according to TNS. Product-comparison sites have the trust of 31%. And in a blow to those who believe the future of media lies in all news being available gratis, just 15% said they trust free newspapers.

Benton

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