NAB’s Rehr Criticizes Deal Bill on Retransmission
LAS VEGAS -- NAB Pres. David Rehr ripped a proposal to change retransmission consent by Rep. Deal (R-Ga.) using the opening keynote here to tell broadcasters to fight it. Deal plans to introduce an amendment Wed. during a House Commerce Committee telecom bill markup “to put broadcasters at a significant disadvantage,” Rehr said. He asked station executives to e-mail members of the committee, of which the congressman is a member, “with a loud and clear message: ‘This Deal is a bad deal.”
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Deal joined groups including the American Cable Assn. and EchoStar in criticizing use of FCC retransmission consent rules to force cable and DBS providers to agree to carry nonbroadcast networks to get local TV station programming. “End result: consumers are left with a package full of channels they would never have requested,” Deal said in a written statement. Congress should “reform…the antiquated and anti-competitive retransmission consent rules,” he said.
Deal’s amendment has a low chance of passing, with just a few votes behind it, Rehr told reporters before his speech. Chances for any legislation to be passed on the Hill this year are low, he told a broadcasters dinner Sun.: This “being an election year, you do expect some degree of gridlock.” Political analyst Stuart Rothenberg agreed, though he said the chances of getting broadcaster-friendly legislation passed are greater than they will be in 2007. “You might have a better chance now,” he told a breakfast meeting. “This is just not a very good environment for passing anything bipartisan.”
The Deal amendment would give cable and satellite TV more sway in carriage negotiations with broadcasters, allowing them to take disputes to commercial arbitration if 90 days of private bargaining with a TV station fail to produce an acceptable deal. The TV station -- which wouldn’t be allowed to pull its signal during arbitration -- would have to be affiliated with at least one cable network for arbitration to be applicable. The amendment would also require MVPDs to notify the FCC within 30 days of any change in carriage rates by broadcasters or programmers; the FCC would, in turn, publish an annual report on programming prices.
The amendment would strengthen the hand of ACA members, EchoStar and others that have argued against the retransmission consent system in forums from the Adelphia proceeding at the FCC to decency hearings on the Hill. It would approve “pool bargaining,” allowing small cable operators to join forces when negotiating carriage deals, and require a review of the FCC’s definition of a “small” cable operator. In reviewing that definition, the amendment would also require the FCC to consider whether a large MVPD with a small market share could be considered a “small cable company” for negotiations with broadcasters in that market.
The NAB said it will release a full-page ad today (Tues.) in response to Deal, urging the House Commerce Committee not to impose “a new federal mandate disrupting private program carriage negotiations.” The ad cites an FCC study released last Sept., which shied away from recommending any changes to the “retransmission consent regime.” Deal’s amendment “flies in the face of 14 years of successful communications policy,” the NAB said. A spokesman at Deal’s office couldn’t be reached for comment by our deadline.
Rehr didn’t spare cable and satellite radio from harsh words. The latter will lose to over-the-air radio once digital radio becomes popular, Rehr said: “Its business model is bankrupt.” Cable must pay for rights to carry local broadcasts, as Verizon did with a recent deal to carry CBS owned stations, Rehr said: “Satellite and telephone companies already recognize that they must compensate broadcasters. Eventually, so must cable, especially as its own competitive position weakens.” Telco video should be encouraged as an additional way for TV viewers to get local programming, Rehr said.
Networks and their affiliates, uneasy companions at times, must work together as ABC and peers strike deals to put shows online, Rehr said: “Broadcasters must move quickly to increase the number of distribution channels… Our future is a broadcast signal on every gadget - cellphones, laptops, PDAs.” Such alliances present a new business opportunity and a challenge to come up with ways to divvy up revenue, Accenture’s Dave Brown said: “There should be nothing to fear for those of us who are prepared to embrace the change.” Broadcasters must step up, Rehr said: “The business model will be worked out. What is most immediate and important is our full embrace of the future… Networks and affiliates must share in new revenue streams.” - Jonathan Make
NAB Notebook…
House Commerce Committee Chmn. Barton’s (R-Tex.) telecom reform bill won’t be signed into law by President Bush because there’s not enough time left before midterm congressional elections, said an aide to a committee member. “We'll get it through the House,” Ryan Walker, an aide to Rep. Gillmor (R-O.), told a policy panel at NAB. “It won’t be signed into law. We'll have to continue it in the 110th Congress.” Sen. Landrieu’s (D-La.) communications dir., Adam Sharp, agreed, saying: “There is little time left.” Barton last month gave 2-1 odds the bill would reach the President this year (CD March 30 p1). Asked to clarify his remarks after the panel, Walker said that though “Barton has a great bill,” time presents a problem. The hold on Robert McDowell’s nomination to the FCC may be removed soon, but the ball is in the President’s court, Sharp told us. Landrieu won’t remove her hold on all Senate appointments except for those to the courts and military until Bush commits an additional $4.1 billion to rebuilding levies damaged by Hurricane Katrina, he said. “Our distinct hope is that we can lift these holds very soon,” he said. When we asked about a White House recess appointment of McDowell, he said: “I would not put that past them.” - JM
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FCC Comr. Adelstein acknowledged he’s portrayed as “hard” on the broadcasting industry, and the reason is “that I have such high hopes in your potential.” Speaking at a Mon. breakfast, he said broadcasters have such a “special opportunity… special obligation” to serve their viewers and listeners and “I see so often how broadcasters make a difference in their communities.” He cited the post-Katrina performance of Miss. and La. stations and the “critical role they played.” Rewriting of station ownership rules must have a goal of keeping “local ownership alive,” Adelstein said.
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DTV distributed transmission systems will benefit broadcasters and the public by allowing for smaller transmission towers and reducing interference to other stations, said technology consultant Merrill Weiss. The systems, which use cell-tower like dispersion instead of one large antenna, were the subject of a recent FCC order (CD Nov 17 p12). Many comments in an FCC rulemaking on the subject supported using demographic market area boundaries to determine where to place the systems, Weiss told an NAB engineering conference Sun. The upshot is that programming from stations can compete with cable and DBS providers, Weiss said: “[It] enables the equivalent of cable service… to be competitive with cable as an alternative service provider.” In another DTV benefit, ending analog over the air TV will free up space on broadcast antennas for new applications including transmitting data, perhaps in the 700 MHz range, said Dielectric Senior Vp Kerry Cozad. “The analog sunset is going to provide us with a lot of opportunity. What do we do with equipment and towers to actually make some money?” Lower power antennas -- and transmission gear mounted on the side of antennas instead of on the top -- cut costs, Cozad said: “There are some very specific cost savings looking at these types of antennas.” -- JM
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NTIA is likely to launch a formal rulemaking on subsidies for DTV converter set-tops, probably “relatively soon,” NAB Senior Vp-Technology Lynn Claudy told a broadcast engineering session here. Formal NPRMs, such as those by the FCC, are considered rare for NTIA, but industry officials believe the complex subsidy program, which will provide $40 vouchers good for converter box purchases, justifies it. Reference designs for the boxes, which will permit DTV signals to play on legacy analog TV sets, are being developed by Zenith and Thomson via a Terrestrial Digital Converter Box (TDCB) program launched by the broadcast and consumer electronics industries. The goal, said MSTV Senior Vp Victor Tawil, is a box retailing for $50-$70, easy to use and reliable. Elements still in flux include the accompanying electronic program guide (2 versions are being considered, said Tawil) and some user interfaces. Some details will be settled after user trials, he said. The “enemy” is the possibility that makers will cut corners to offer cheaper boxes, Claudy said. Industry fears viewers already skeptical of DTV will be alienated further if they buy boxes that don’t work well, he said. One possibility, Claudy said, is industry certification of box designs. The industry also worries about the analog signal shutoff Feb. 18, 2009, Claudy said: “That means March Madness will probably have nothing to do with basketball.” -- MF
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Regulation could be a problem for targeted ads allowed by IPTV, said Roger Lynch, CEO of Video Networks Ltd. (VNL), which runs a London-area IPTV system. IPTV allows viewers to be identified, with viewer profiles including such things as where they live and their demographics, enabling advertisers to target viewers’ interests rather than sending the same ads to all viewers. At a panel session, an audience member asked if that raised privacy issues. There could be “regulatory impediments” to targeted ads, Lynch said, but said operators can help head them off by making customers sign strong opt-in agreements. Asked if targeted ads will be a big business, Lynch likened them to Internet ads, which have become “a very significant business. This is really just the next step of that [and] there is a significant appetite from advertisers,” Lynch said. About 95% of VNL subscribers use video on demand (VoD), but only 60% realize they are, he said: “I think that’s the way it will go… We have stopped thinking about the distinction.”
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NAB Pres. David Fehr has retained Robert Volmer of communications consulting firm Crosby Volmer to “study, evaluate and recommend” changes in the Assn.’s public affairs efforts. The contract is for a year, but the other terms weren’t disclosed.
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Japan’s NHK said its labs have developed an “Ultra High- Definition TV System” (UDTV) with 4,230 scanning lines and 7,680x4,320 pixels. The result is 32 million pixels, vs. about 2 million for HDTV. UDTV also includes 22.2 channels of sound, vs. 5.1 channels for HDTV, divided among a 9- channel ceiling layer, a 10-channel middle layer, and a 3- channel floor layer. NHK said it has already developed a variety of equipment for UDTV, including camera, display device, hard disk recorder, an optical transmission system using dense wavelength division multiplexing, a codec and even an experimental satellite transmission system. No plans for commercial launch were announced.
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Membership in the International Assn. of Bcstg. Manufacturers has grown 20% in the last year, the group said. Membership now exceeds 200 companies, it said, with some of the new members including Microsoft and Apple.
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PBS signed a multi-year multi-transponder deal with SES Americom for the delivery of content via its IT-based Next Generation Interconnection System (NGIS), officials said here. Adding IT capabilities will improve efficiency by, for example, reducing refeeds of programming, officials said. The deal is for transponders on the AMC-21 satellite to be launched in mid-2008, with content to be carried on the AMC-1 and AMC-3 satellites until then. Terms weren’t disclosed.