[opendtv] Re: MVPD Definition

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 17 Aug 2015 08:46:39 -0400

On Aug 16, 2015, at 8:26 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
As usual, Craig argues against the obvious. Is it a wonder why I've always
disagreed with him? It's his habit! So, let's start with what the FCC
originally said:

Thanks for at least trying to be objective here Bert. Obviously there is a
great deal of history here, not to mention huge investments that helped to
build the cable industry, which the DBS systems were able to leverage with the
FCC order to make programming available to competitors.

And then there is the whole market based broadcast system that the FCC and
Congress have been protecting for more than a half century; the order last week
relaxing the rules for out of market importation of broadcast signals may
signal a major shift at the FCC that could be reflected in its MVPD order.

So to summarize the history here:

1. Broadcasters bring TV to American homes via a market based infrastructure
where their signals are protected from interference from other markets.

2. CATV systems are built as "gap fillers" to bring these broadcast signals to
pockets of population that are terrain blocked, or too far from a market to
receive without a tall tower.

3. Cable systems are franchised on a market by market basis to bring TV to
homes that are capable of receiving broadcast TV. In some cases multiple
franchises are licensed to MSOs for one TV market (i.e. different cities within
a larger TV market).

4. Satellites make it feasible to distribute TV signals to the cable head-ends.
Several entrepreneurs in the cable industry create new TV networks to compete
with the broadcast networks they retransmit from local stations. A few cable
systems try to import these signals from adjacent markets rather than carrying
the local affiliates. The FCC reacts, adopting rules to protect the local
stations and the syndicated programming they carry from out of market
duplication. And they adopt must carry rules so that all stations in a market
can demand carriage by the cable systems in their market.

5. The cable systems start to charge subscribers fees for individual channels
to provide revenues to grow these networks. The cost of cable service starts to
increase at rates significantly higher than inflation. Broadcasters claim that
they should be compensated for their content, which the cable systems are
stealing. Congress passes the 1992 cable act giving the FCC more authority to
regulate the cable industry, and allowing Broadcasters to choose must carry or
negotiate retransmission consent fees for their signals.

6. Most broadcasters use their negotiating leverage with retrans consent to
create new non-broadcast networks and to demand priority placement on cable
systems. The broadcast conglomerates start buying cable networks.

7. Consumers begin to install large C-band satellite dishes to receive TV
signals from HBO and unencrypted TV backhaul networks. The cable industry
creates the Primestar satellite service, which delivers analog TV channels to
small 90 cm dishes from four satellites.

8. Digital compression is developed by General Instruments to enable Direct
Broadcast Satellite services to compete with cable. This transforms the debate
about a next generation HDTV standard, and forces Congress to consider
competition with local cable systems. The FCC sell spectrum for multiple DBS
services.

9. DBS service is authorized by Congress and the FCC adopts program access
rules requiring content owners to provide the same content they deliver through
cable systems to the DBS systems on fair and equitable terms.

This sets the stage for all that follows, which is essentially a subset of the
December 2014 FCC NPRM, in which they will redefine what a MVPD is, based on
the reality that a facilities based transmission path is no longer required to
deliver a MVPD service over the Internet.

http://www.dwt.com/FCC-Media-Bureau-Tries-to-Define-MVPD-for-New-Technologies-04-03-2012/
Bert cites some history where the FCC used the need for transmission facilities
to be considered to be a MVPD. Then some of the issues raised in the current
NPRM.

Bottom line, technology has trumped regulation. The old definition no longer
works, hence the need for the NPRM.

So at this point, 2012, the **only** question is about owning the facilities,
owning those "channels." The existence of "linear" programming wasn't even
mentioned. And that's what the cable companies insisted on repeating back to
the FCC, then and since then:

-------------------------------
http://www.multichannel.com/news/policy/what-mvpd-exactly-cable-ops-weigh/263867

NCTA: "Under the statutory definition, MVPDs provide 'multiple channels of
video programming.' The language of the definition, its legislative history
and purpose, and the Commission's past decisions all support the Bureau's
interpretation that the term 'channels' includes a transmission path."

Comcast: "Congress did not and could not conceive of OVD services - which
rely on the customer to acquire and use a transmission path that is offered
and operated separately and apart from the OVD service - as MVPD services."

As expected the cable industry tries to protect itself from new competition
based on outdated regulations.

HIGH (STAKES) DEFINITION The following is the Cable Act and FCC rule language
on MVPDs and channels. The Media Bureau has signaled it plans to decide
whether these definitions from two decades ago still fit the video
distribution marketplace.

MVPD: "A person such as, but not limited to, a cable operator, a multichannel
multipoint distribution service, a direct-broadcast satellite service, or a
television receive-only satellite program distributor, who makes available
for purchase, by subscribers or customers, multiple channels of video
programming."

Channel: "[A] portion of the electromagnetic frequency spectrum which is used
in a cable system and which is capable of delivering a television channel (as
television channel is defined by the Commission by regulation)."
-----------------------------

The whole point of the NPRM is to consider updating FCC regulations to reflect
reality, and to protect legacy infrastructures it regulates.

Here are two important excerpts from the introduction to the NPRM:

Specifying the circumstances under which an Internet-based provider may
qualify as an MVPD, possessing the rights as well as responsibilities that
attend that status, may incent new entry that will increase competition in
video markets. In particular, extending program access protections to
Internet-based providers would allow them to “access[] critical programming
needed to attract and retain subscribers.”7 And extending retransmission
consent protections and obligations to those providers would allow them to
enter the market “for the disposition of the rights to retransmit broadcast
signals.”8 Broadcast and cable-affiliated programming could make
Internet-based services attractive to customers, who would access the
services via broadband. The resulting increased demand for broadband may in
turn provide a boost to the deployment of high-speed broadband networks.

AND

We propose to interpret the term MVPD to mean distributors of multiple
linear video programmingstreams, including Internet-based services.

We tentatively conclude that this interpretation is a reasonable
interpretation of the Act, and is most consistent with consumer expectations
and conditions in the industry.

 We also seek comment on an alternative interpretation that would require
a programming distributor to have control over a transmission path to qualify
as an MVPD.

o We invite comment on whether this interpretation is consistent with the Act
and Congressional intent and how this interpretation would apply as companies
begin to offer subscription linear video services over the Internet.

This is what I dug up on the spur of the moment, but there's more written
that explains this same definition. The MVPD is supposed to supply the
"transmission path," MVPDs claim. Craig feels obliged, for his own political
motives, to deny this.

ACTUALLY I have found several and posted them f during these discussions. The
term is not yet used by the FCC, but is in widespread use by analysts and
journalists. I posted this research report specifically, as it contains a
wealth of other information about the subjects we argue about.

Craig found one! Amazing! An article that is just as make-believe as his
arguments. And just like Craig, they never define VMVPD as opposed to OTT. In
spite of that, call it what you like, this is what they claim:

"But new virtual MVPD services such as Apple TV or Sling TV are potential
substitutes to traditional cable subscriptions. These services could
contribute to a drop in the share of households subscribing to traditional
MVPDs from ~89% currently to ~70% in 2019."

Since I'm not a mouthpiece for old-school MVPDs, I simply rewrite the first
part of that sentence as, "But new pay-OTT services ..." They say 70% by
2019. A guess, obviously, but even they can't deny the trends. By calling
unwalled OTT services "VMVPD," instead of what they are, they can continue to
pretend.

Whatever.

Did you read the whole thing including all the statics about viewing behavior
in different age groups and the different media we consume?

Regards
Craig


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