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Posts Tagged ‘Broadcasters’
August 23rd, 2017 at 10:20 am
Broadcasters’ “Next Gen” Proposal to FCC Would Cost Consumers
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The new Federal Communications Commission (FCC) has been one of the most consistently outstanding agencies of the Trump Administration in terms of restoring regulatory sanity after eight years of politicized abuse throughout the Obama Administration.

Unfortunately, the FCC remains under assault from groups seeking to leverage federal policy toward its own advantage, and continued vigilance is critical.

In just the latest illustration, broadcasters have begun pressuring the FCC to allow television stations to begin transmitting signals in a new “ATSC 3.0” format.  Also referred to as “Next Gen,” such a transition would impact every American consumer who watches television, and not necessarily for the better.  In addition to costing taxpayers, it could create a de facto federal mandate on television service providers.

First, the ATSC 3.0 format is incompatible with existing televisions and set-top boxes, meaning that Americans who wanted to simply continue watching television would have to purchase new equipment or join a pay-TV provider that had spent the time and money transitioning its equipment.  That, of course, would be a cost transferred to customers.

Second, the proposed transition could also mean weaker signals for consumers who choose over-the-air broadcast.  That’s because it would involve simulcasting from facilities with smaller or new coverage areas, placing rural voters in particular jeopardy.

Additionally, ATSC 3.0 could bring more dreaded blackouts, since broadcasters could seek to force pay-TV providers to carry ATSC 3.0 signals under threat of blackout (a tactic broadcasters have exploited in the past on behalf of such efforts as ratcheting up retransmission fees).  Accordingly, broadcasters can leverage their government-provided bargaining position to obtain higher fees for themselves via threat of consumer blackouts, which they’ll surely employ in their effort to force consumers and providers to purchase the new equipment necessary for reception.

That, of course, translates to higher costs for consumers, or giving up their favored programming altogether.

The better alternative is to let market forces work, by making the Next Gen transition wholly voluntary.  Broadcasters operate under an umbrella of government license, which allows them to hold consumers hostage in order to increase revenues.  Accordingly, the FCC should continue its good works by rejecting broadcasters’ attempt to leverage federal bureaucracy to achieve a new government handout to be subsidized by consumers.  Next Gen should be a truly voluntary standard that doesn’t leave consumers holding the bill for the broadcasters’ innovation.

December 2nd, 2016 at 4:24 pm
ATSC 3.0: What Could It Mean for American Consumers?
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Next month’s arrival of a new Trump Administration, alongside a Congress ready to hit the ground running, promises a flurry of corrective activity after eight years of Barack Obama.

However, Americans should remain vigilant against regulatory mischief that some are trying to push through unnoticed at the outset of the new Administration and Congress.

Exhibit A:  An effort by broadcasters to convince Obama’s Federal Communications Commission (FCC) to approve an entirely new broadcast television standard known as ATSC 3.0.

In a nutshell, the ATSC 3.0 standard amounts to yet another new federal action upon a private marketplace and a handout to a favored industry that could inflict significant and unnecessary costs, ultimately to be paid by consumers.

Under current law, cable and satellite television providers must carry local television stations, so the regulatory scales are already tipped in broadcasters’ favor.  The proposed new mandate could extend the scope of providers’ obligations requiring them to transmit broadcast signals in the new standard to the public.

As a result, consumers who currently receive local stations over the air or via cable or satellite providers suddenly would face the possibility of incurring the cost of new equipment in order to receive the new signal, as current equipment does not support the new standard.  Obviously, millions of consumers who are already struggling to make ends meet could thus be forced to pay – whether through higher monthly subscription fees or direct charge – for new equipment for a “benefit” that may not be needed or even desired.

Satellite and cable providers could also face technological hurdles to accommodate the new standard, which could inevitably lead to additional costs and quality assurance issues.  Ultimately, subscribers could have to pay those costs and endure those potential technological glitches as well.

Keep in mind that all of these costs and changes could be imposed without a sober cost/benefit analysis from the FCC.  It’s precisely the sort of hasty, top-down, crony capitalist federal regulatory action that has tested the limits of American tolerance over the past decade.

Technological advance is a good thing, whether in the TV market or elsewhere.  But that’s something that should occur as the result of market forces, not through fast-tracked federal regulatory action riddled by too many uncertainties.

January 25th, 2016 at 3:39 pm
Yes to Spectrum Auction, No to Double-Dipping
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CFIF has long advocated auction of over-the-air television stations’ airwaves – or spectrum – by the Federal Communications Commission (FCC), which offers a critical free-market opportunity for the wireless telecommunications industry to avoid looming network congestion issues.  It’s one of those rare potential win/win opportunities as Americans increasingly rely on mobile devices, and it constitutes the core mission of what the FCC should rightfully be doing with its resources.

While strongly favoring spectrum auction, however, we’ve also consistently opposed crony capitalist efforts to game the system and corrupt this promising opportunity.  Just last week, for example, we highlighted our distaste for Dish Network’s scheme to exploit “small business” discounts for its own benefit.

Unfortunately, we may be witnessing another attempt at exploitation of the spectrum auction process.  Namely, television broadcasters offering spectrum in the upcoming incentive auction may possess the ability to sell it twice, as reported by Broadcasting & Cable’s Washington Bureau Chief John Eggerton:

According to a source familiar with their thinking, some ‘major’ broadcasters are looking at putting spectrum in the pot and, if they win, taking advantage of tax laws to keep that money in escrow and use more cash, or a loan, to bid on some of that reclaimed broadcast spectrum in the forward auction – they would need to use other money since reverse payments won’t be available until both sides of the auction close.  They could then sell or lease the spectrum to wireless carriers hungry for it.”

What would make such attempts particularly galling is that the broadcasters originally received that spectrum free of charge, so they’d be selling twice something they didn’t pay for even once.

FCC auction of spectrum for more productive use is to be applauded, and was a long time in coming.  But please, let’s keep it free of attempts at unjust enrichment via exploitation of byzantine regulatory mechanisms.

April 29th, 2015 at 4:29 pm
Rep. Blackburn Introduces Important Property Rights Bill – The Protecting the Rights of Musicians Act (PRMA)
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Representative Marsha Blackburn (R – Tennessee) is perhaps the most steadfast property rights advocate in Congress.  In that vein, she has joined Rep. Anna Eshoo (D – California) in introducing another important piece of proposed legislation:  the Protecting the Rights of Musicians Act (PRMA).

Under current law, terrestrial radio broadcasters exploit a loophole that allows them to play songs without compensating artists who created and performed them.  That stands in contrast to other forms of radio transmission – including satellite and Internet radio – that justifiably pay the performers whose songs they play.  Terrestrial radio companies thus earn billions of dollars in advertising revenues largely on the basis of songs for which artists remain uncompensated, contrary to fairly straightforward concepts of fairness.

Ironically, some of the companies that own those terrestrial radio stations turn around and ask Congress to require cable and satellite providers to compensate them for retransmission of television programming of stations they own.  Fair enough that they be paid for such retransmission, but the same logic should in turn apply to their own radio programming.

Representative Blackburn’s proposed PRMA would correct that ongoing unfairness by requiring broadcasters to practice what they preach and pay performers for the works they’ve worked hard to create.

Importantly, the legislation would also interrupt broadcasters’ effort to force tech companies to include an analog FM radio chip in smartphones and other mobile devices.  If device manufacturers wish to include FM chips in their products, that’s all well and good.  Indeed, many already do.  And if consumers demand products that include them, then the market will respond accordingly.  But it’s simply not something the federal government should be dictating.

By the way, that FM chip mandate proposal is also a sneaky way for terrestrial broadcasters to expand their exploitation of playing songs without compensating artists.  After all, as noted above, Internet broadcasters must pay artists under current law.  But by asking the federal government to compel FM chip inclusion, terrestrial broadcasters would be able to expand their loophole to mobile devices.

That is the epitome of crony capitalism.

We at CFIF remain strong defenders of property rights, including intellectual property rights for artists and musicians.  Accordingly, we applaud Rep. Blackburn for her leadership on this issue, and encourage our supporters and activists to ask their own elected representatives to stand alongside her.