More TV Blues

LINTV-TWC DisputeWell, today is the day that WIVB and WNLO will vanish from the sets of Time Warner cable customers. Time Warner took over in this area after Adelphia went belly-up a while ago.

From what I can figure out, the dispute is over LIN television, the parent company of WIVB and WNLO, wanting to charge the cable operator to carry their signals.

According to LIN Television, they want “less than a penny a day per station/per subscriber, for that ability to resell our station’s programming.” The also talk about “fair market compensation” for a signal that they make available over-the-air for free to individuals.

LIN Television’s side of the story is here and Time Warner’s side is here.

Now, I watch these channels either over the air (for free) or using DirecTV, neither of which is affected by this. So I have no axe to grind in this issue.

But I have an opinion. (Of course!)

Once upon a time some entepreneur thought “Hey, my neighbors might pay me if I put up a really good TV antenna system and then wired it to their houses.” CATV was born. CATV means Community Antenna Television. The cost of the equipment and servicing it was paid for, but the signals were free to anyone off the airwaves, so that didn’t matter. CATV thrived in areas where reception was difficult without a significant investment in a large fringe-area receiving antenna installation. It also made sense in large apartment complexes and densely populated areas like trailer parks.

Then along came satellite TV. The CATV operator said “Hey, if I put in a satellite dish, I can add HBO to the channels in my system.” HBO said “Not without paying us on a per-subscriber basis. We don’t give our signal away for free! We have expensive satellites and movie rights to pay for and no commercials to cover that.” But everyone wanted HBO so bad, they were willing to pay extra for it every month. The CATV guy set it up and people were lining up to get on his system. The satellite people were happy to make the money and the CATV guy got a cut too, and everything was good. So good, that in fact, more satellite channels came to be and more were able to be offered to the customers. But the local channels were still free.

Of course, the government go into it. As CATV got popular, mostly because of the satellite content, it wanted to expand into more areas. Areas that weren’t traditionally practical because the homeowners there could easily get good reception of the local TV channels with out special antennas. But they wanted HBO and Showtime and Playboy and MTV and on and on too… To provide this, the CATV guys got big and they got big problems. They had to string their cable on the telephone poles and they had to get permission to do that. The poles all belonged to different people, some were owned by the phone company. Some were owned by the electric company. Sometimes there was more than one phone company or electric company in an area. So they needed to get a franchise agreement in any community to coexist with the other utilities.

The government said “Sure you can do that, but it’s going to cost you. You have to pay us and you have to follow some rules. We want free cable hook-up for some schools and public buildings and we want reduced rates for Senior Citizens, and” … a whole shopping list of things. But they eventually worked it out and most communities now had “Cable.”

They still charged extra for the channels that came from satellite. They called them “Premium Channels.” The local channels that could be had for free with an antenna were carried as a sort of public service. The Cable guy made most of his money off the premium channels now anyway.

Along the way, deregulation happened and most of the rules in the franchise agreements were gone. The Cable industry – nobody wanted to use the CATV acronym anymore – had matured and costs of maintaining all that wire was going up. More satellite channels and digital equipment coming online also made for increased costs. Even the satellite channels that used to be commercial-free now had commercials to cover costs.

The Cable guys had an idea: What if we could sell our own advertising and put it in place of the commercials on the off-the-air stations? We could make a little (lot) money and get in the black again.

Or they could spend money on pet projects and their friends and family as if there was no end to it and run the company into the ground, but that’s just Adelphia.

So that’s what they did. Only now there was competition. Some companies had made satellite dishes small enough and practical for individual homes. Now homeowners didn’t need the Cable Guy to get HBO. Or anything else, for that matter. Sure cable didn’t go out every time a thunderstorm came through, but it was competition and it kept prices somewhat down and the Cable Guys still were feeling the pinch.

Here is a basic analogy: If you were to get a drink of water at a public drinking fountain, it is free, but once the water is placed in a package, it is no longer free. The same holds true for local television programming delivered through a subscription-based provider. – WIVB web site

Maybe, but would I just be charging for the packaging? Or the water? If I filled my own water bottle, no one would care. If I filled a thousand water bottles, then there might be a problem, whether I sold them, or gave them away for free. Is the bottle the real issue, or the money?

Now, jump to today. The over-the-air TV signals are still there for free, but the TV stations are facing big investments to pay for switching to digital TV. They’re afraid that once the deadline for the analog signals to go off-air comes, they’re going to lose their outer tier of reception. Digital just doesn’t work out in the sticks. They are afraid their audience numbers that their advertising is based on are going to shrink and they want to find ways to offset the loss of revenue.

So, TV guy thinks “Why can’t we charge the Cable Guy to carry our signal just like the Satellite Guys do?”

“After all, don’t the satellite guys carry channels with advertising? Heck, the Cable Guy is even putting his own ads in place of ours. We should get a cut of that.”

And that’s where we are today. Who’s right? I don’t know. I always thought it was sneaky and underhanded – deceptive, even – to slide ads in in place of the one that were supposed to be there. But to the viewer, does it really matter?

I thought that, as long as I sit through the commercials that paid for it, how does it matter how I get the station delivered to my set. If a cable company carried it as part of the package, as a community service, why should they have to pay? They’re only going to pass it on to the customer, who’s supposed to be able to get it for the price of watching the commercials.

So really, it’s either about the commercials, or it’s the TV company getting greedy and trying to create a new income stream. If it’s about the cable company superimposing commercials, let’s just stop that. If it’s about a new income stream for LIN TV, let’s nip that in the bud right now, because you can bet WKBW, WGRZ, WNED and WUTV are all watching and waiting to see how it goes. It will result in nothing but more ways to charge the consumer to sit and watch commercials.

That fact is, the Cable Guys are probably going to be doing the TV stations a favor. When the analog signals go dark next February, a lot of people are going to be looking for a way to get these local stations when their DTV sets and converter boxes hiccup and say “No Signal.” Maybe they should charge the TV stations to carry their signals.

One thing that always seems to be forgotten in these type of arguments is ownership of the airwaves. We get all up in arms about intellectual property rights but forget all about something as important as a public natural resource. The airwaves do not belong to anyone. They are the peoples’ and are held in trust for them by the Federal Government. A federal agency, the FCC, is supposed to regulate and oversee their use in the public interest. A cell phone carrier, an internet provider, or a TV or Radio station do not buy spectrum to use. They receive a license to use their piece of the radio spectrum for the public good. When making a profit gets in the way of the public’s interest, it’s time to ask the FCC to remove the license and give that spectrum to someone else who will use it for the public’s good.

Posted in Rants, Tech Stuff, TV
2 comments on “More TV Blues
  1. Mark Gritz. says:

    I’m surprised that Time Warner is letting people figure out the dirty little secret, though. OTA HD TV is much better that HD cable because of compression rates. If you have a true HD capable set, there is a significant difference in picture quality between OTA and cable HD. To play devils advocate, then, TW is charging extra for HD service, and providing a lesser quality signal than WIVB OTA. Why shouldn’t Lin Broadcasting try to get a piece of that pie? As far as I’m concerned, it is a slap fight between two corporations that really doesn’t affect me at all. TW will probably win in the end. They are a larger corporation w/ more resources to fight with. I wonder how many basic cable subscribers will figure out that with HD conversion and rabbit ears, the could save the expense of the cable bill every month?

  2. Al says:

    That’s a good point. When it’s there, OTS HDTV is great. My dish was out for three weeks and I hardly missed it.

    Incidentally, it isn’t just the two Buffalo stations, but all of Lin TV’s stations, however many that is across the country and however many are in TW areas.

    While, as they say, it’s just a penny a day per subscriber, do the math and that adds up to big money in a year with thousands of subscribers. Plus, I’m sure the other broadcasters are watching, waiting to see what happens. It could drive the cost of cable up substantially if they all jump onboard.

    I think the best thing for the consumer (and therefore the least likely to happen) would be to call a draw and let the cable ops carry the channel as a public service, but keep their hands off the commercial content.

Leave a Reply

Your email address will not be published. Required fields are marked *

*