Updates from Patrick McFadden Toggle Comment Threads | Keyboard Shortcuts

  • Patrick McFadden 12:04 pm on February 5, 2016 Permalink  

    ATVA: What Acorn? 

    The American Television Alliance (ATVA) – the pay-TV industry’s leading voice these days – needs our collective help. It appears that our friends are suffering from a serious case of Chicken Little Syndrome. You remember Chicken Little, right? That’s the poor little chicken who believed that the sky was falling after she was hit on the head by an acorn falling from a nearby tree. Chicken Little was so alarmed she spread panic throughout the town – all because of an acorn.

    ATVA’s acorn is retransmission consent. When pay-TV companies seek to carry most local broadcast television stations, they have to negotiate with broadcasters for the right to do so. The overwhelming majority of these negotiations are uneventful and routine. They are business negotiations, conducted at arm’s length by sophisticated actors. As with any business negotiation, however, occasionally the parties struggle to come to terms. Infrequently, this results in a broadcast station’s removal from a particular pay-TV system until a deal can be reached.

    ATVA’s actions – and indeed its entire purpose – would make even Chicken Little blush. Unlike the unwitting Chicken Little, ATVA spends day and night fervently hoping that one of the many thousands of retransmission consent negotiations between TV broadcasters and multichannel video programming distributors go south and hit ATVA squarely on its head.

    You see, ATVA was conceived to create hysteria. ATVA’s strategy is to wait for an isolated example of a hiccup in negotiations – an acorn falling – and overreact in the most spectacular fashion possible. It’s as though ATVA has set up shop by the side of a busy road, just waiting for a car accident. Then, when an accident happens, ATVA sets off flares and air horns, and unfurls a banner triumphantly declaring, “SEE? I TOLD YOU THE HORSELESS CARRIAGE WOULD NEVER WORK!” ATVA wants you to ignore the hundreds of cars passing by without incident and focus only on that accident. If they make enough noise and sound scary enough, maybe someone will pay attention. That’s why, for ATVA, it’s not enough to turn a molehill into a mountain – the mountain always has to be Vesuvius and Pompeii always has to be on the cusp of being buried by ash.

    There are countless examples of ATVA’s strategy, including the recent impasse between Nexstar Broadcasting and Cox Cable. As the extended agreement between the parties expired, ATVA fired up its outrage machine (patent pending) and penned a Chicken Little letter to the Federal Communications Commission (FCC). ATVA claimed that, even though Cox isn’t an ATVA member and ATVA has no specific knowledge about the parties’ negotiations, ATVA nevertheless knew “exactly what is going on here,” and that Nexstar was engaged in a “shakedown.” ATVA claimed that FCC intervention in the market was urgently needed to protect the poor, tiny, helpless, cable company (that happens to be the third largest cable provider in the country).

    What ATVA doesn’t tell you is that Nexstar had, up to that point, successfully negotiated 1,200 retransmission consent agreements with pay-TV companies over the last 11 years. That’s right. 1,200 successful negotiations. But, when the 1,201st stumbles because a cable company holds out for lower rates or possibly even to trick regulators into action? The system is broken! Government intervention is desperately needed! The sky is falling!

    ATVA’s hysteria reflexes have to be razor sharp because it generally has only a narrow window of opportunity to put out exaggerated and misleading claims regarding these exceedingly rare disputes. In this case, ATVA didn’t have a moment to waste to stage its very public case of the vapors. Nexstar and Cox resolved their contractual impasse without great fanfare, despite ATVA’s convulsions. The parties reached an agreement without new heavy-handed government regulations, despite ATVA’s grandstanding. Good thing ATVA didn’t wait a day to see what happened – they would have wasted a perfectly good acorn.

    You might think that maintaining a constant, breathless stream of hyperbole would get exhausting after a while, but it’s the only real strategy ATVA has. After all, telling you the truth – that your cable company just doesn’t think it’s making enough money off of you – isn’t exactly a winner.

     
  • Patrick McFadden 12:24 pm on September 11, 2015 Permalink
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    Some Changes for a More Balanced Auction 

    Yesterday, NAB filed a limited petition for reconsideration of the Federal Communications Commission’s (FCC) recent “Procedures Public Notice” laying out additional details concerning the forthcoming broadcast spectrum incentive auction. First, we’re asking the Commission to reconsider its decision to relocate TV stations in the duplex gap, which eliminates the only remaining exclusive use spectrum available for wireless microphones broadcasters use to cover breaking news and emergencies. Second, we’re asking the Commission to reconsider the level of market variability it will permit in light of recent progress made in international coordination with Canada and Mexico. We’re limiting our request for reconsideration to those two issues primarily because they are subject to quick fixes. The Commission could grant our request without in any way threatening its target March 29, 2016 start date for the auction.

    Separately, we are also seeking clarification as to whether the FCC’s current incentive auction design is consistent with the Spectrum Act’s requirement that the incentive auction be voluntary for broadcasters – or whether the FCC’s chosen mechanism will effectively nudge broadcasters into participating.

    Here’s the issue. The natural consequence of the FCC’s variable band plan is that some broadcasters will be assigned channels that are in the new wireless band – that is, they will be operating on channels that are used by wireless carriers in other markets. For a long time, the FCC had been suggesting that broadcasters would be randomly selected to be placed into the wireless band, and it would not be based on whether and to what extent they participated in the auction. Obviously, it would be alarming if the FCC made judgments based on participation.

    The recent Procedures Public Notice, however, could be read to suggest the FCC has decided that only non-participating stations will be placed in the wireless band if the auction successfully closes at the initial clearing target. In addition, it appears that the only other stations that could be added to that list are broadcasters who participate but drop out in one stage, only to see the auction move on to another stage because it could not close. In other words, if the auction fails to close at that initial stage, the only additional stations that can be relocated to the wireless bands are stations that drop out because their asking price is too high. This doesn’t exactly sound “voluntary” to most broadcasters.

    While the Commission doesn’t seem to believe there is any harm to broadcasters if they are assigned a channel in the wireless band because they will receive the same protections in the repacking process as other stations, no broadcaster would voluntarily choose relocation there.

    Television stations operating co- or adjacent channel to new wireless licensees will be extremely limited in terms of their ability to expand their facilities after the auction. As a practical matter, this may constrain their ability to relocate, increase their service area or even innovate. Further, broadcasters, as well as the Commission itself, are all too familiar with the uncertainty and disputes surrounding television stations operating on channel 51 and wireless carriers operating in the 700 MHz Lower A Block. Stations on channel 51 are protected by the Commission’s rules, just as the Commission is now promising to protect stations stranded in the 600 MHz band. Those protections, however, have not prevented costly and time-consuming disputes. Similarly, a broadcaster that has a station relocated in the 600 MHz band will have to factor the prospect of ongoing inter-service interference issues into its business plans.

    The bottom line is that a broadcaster placed in the wireless band will be surrounded by wireless operations that are incompatible with, and hostile to, the broadcaster’s continued operations. It would be as if one’s home was forcibly relocated to a commercially-zoned neighborhood; the home might be identical, but it would not be as comfortable, and certainly not as valuable.

    Our hope is that the confusion emerging from the Procedures PN is just that and that broadcasters do not now have to factor in their participation decision the potential penalty of being shipped to the wireless band. The incentive auction can be a tremendous success as a voluntary auction and broadcasters – not just the speculators – are eager to keep the process moving swiftly.

     
  • Patrick McFadden 11:04 am on April 30, 2015 Permalink
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    What to Expect When You Are Expecting (TV White Spaces Comments) 

    Last month, NAB filed a petition asking the Federal Communications Commission (FCC) to amend certain rules governing the use of TV White Spaces (TVWS) devices. In particular, we asked the FCC to require fixed TVWS devices to eliminate the illusory notion of “professional installation,” an undefined concept that allows an installer to enter the location of a device in the TVWS database. We’re asking the FCC to require automatic geolocation capability, and to hold database administrators accountable for falsified information entered into the database.

    While oppositions and comments on our petition are not due until tomorrow, the responses are predictable, and, in the public interest we thought we’d provide a little primer to what you are likely to see from TV white space proponents and their proxies.

    TVWS COMMENT #1: “NAB cannot identify a single instance of harmful interference caused by an unlicensed device.”

    This is a personal favorite, because it’s misleading on so many different levels. First, it’s a little like saying you shouldn’t wear a seatbelt because you haven’t yet had a car accident, or you shouldn’t have homeowners insurance because your house hasn’t yet burned down. No adult uses this approach in real life. Instead, we take reasonable precautions, precisely to avoid bad outcomes we can clearly anticipate. Second, there’s no surefire way to know if there has been harmful interference to licensed services from unlicensed devices. If a television viewer can’t receive a particular channel, she has no way of knowing if that’s due to a neighbor’s use of a TVWS device; she may just assume she can’t receive that channel and give up. Third, there are less than 600 TVWS devices operating nationwide right now. Yes, in the entire United States. Saying TVWS devices haven’t yet caused interference is a little like saying you haven’t yet been attacked by Bigfoot. It’s a true statement, but it doesn’t prove anything, and you probably don’t want to brag about it in public.

    TVWS COMMENT #2: “Problem? What problem? The FCC has cleaned up the database.”

    Not long after NAB filed its petition, the FCC went to work to clean up the database. TVWS enthusiasts are likely to say that the database has now been thoroughly scrubbed and polished and, as a result, there is no longer a problem. This is the equivalent of a teenager telling his parents he cleaned his room when all he did was shovel everything into the closet and slam the door. What you won’t hear is that anyone – yes, even you! – can register a TVWS device in the database right now, using a falsified location, and get access to channels you should not be able to use. Are you in Washington, D.C. and stuck without a single vacant TVWS channel? Don’t worry! You can easily register your device and enter its location as rural Montana to get access to channels that are currently occupied by local licensed users. This is the result of an obviously broken system destined to lead to interference problems.

    TVWS COMMENT #3: “TV White Spaces are really, really cool.”

    They may try to distract you. Because they don’t want to acknowledge the problem, and because they can’t deny the risk of interference, one or more TVWS enthusiasts will point at a really shiny object, and hope you look. They’ll wax poetic about the untapped, limitless benefits of more unlicensed spectrum for their corporate financiers. They’ll promise “Super WiFi,” “WiFi on steroids,” increased broadband competition, and expanded rural service. Of course, they won’t acknowledge that there are only a few hundred of these devices operating right now, five years and counting after the FCC approved the current rules.

    TVWS COMMENT #4: “NAB’s petition is premature. Don’t worry.”

    Kicking the can down the road is a great way to try to outlast the opposition. Some will argue that, even if there is a problem, the FCC can easily fix it later. This is, of course, shortsighted; rumor has it horses are really hard to chase down once they’ve been let out of the barn. Instead, a more reasonable approach is to establish clear rules of the road and allow manufacturers to start incorporating automatic geolocation capability in new devices before the market heats up. If, and it’s a big if, white spaces technology ever actually does live up to the rather large promises its proponents have been making, retrofitting thousands or hundreds of thousands of devices to incorporate geolocation capability will be costly and disruptive. That’s exactly the outcome NAB is trying to avoid.

    NAB is eager to create an environment in which TV White Spaces can be used effectively while protecting existing licensed users. That’s why we have proposed only modest rule changes to help make White Spaces work for everyone. The rules already require some TVWS devices to have automatic geolocation capability – we’re merely asking the FCC to extend that requirement to fixed devices, which transmit at high power. We’re also asking the FCC to take the simple step of incorporating some basic accountability into its database administrator rules, so as to avoid the next batch of John Q. Public registrations with addresses in Anytown, USA, and phone numbers of 867-5309. These changes aren’t complicated, and they aren’t costly. Let’s get this done.

     
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