August 7, 2009 2:11 AM
If you haven't noticed yet, you probably shouldn't rely on me for your telecom news--because I'm really not that timely. Nonetheless, if you read at all, God bless you, brother (or sister); without you, I wouldn't even have a reader. So, for all my whining about subscription TV prices and practices, I would be remiss in not reporting what's come out in the last week on our subscription TV vertical foreclosure issue.
Cablevision has decided to spinoff its MSG programming unit to its shareholders as a separate property. Contrary to some speculation, though, the spinoff in itself does not solve the potential antitrust problem of vertical foreclosure faced by competitors that are unable to obtain all of MSG's programming because the management of MSG and Cablevision will be the same. Still, though, by separating MSG as a standalone programmer, it will become more obvious over time how much this business is losing if it continues to refuse revenue from subscription television providers like AT&T, DirecTV, RCN, and Verizon in service territories where these companies do not even compete with Cablevision's subscription television service.
This will take a little time, though. But, if the transaction requires any license transfers, it should be easier for all downstream competitors in the MSG programming area to get access to all of MSGs programming on reasonable terms. If an FCC license transfer proceeding is necessary, one can expect competitors to demand, and likely be successful, at getting access to cable programming at the same terms available to other competitors, as a condition to merger approval. My guess is that the Commission would be sympathetic to these requests.
Alternatively, if the FCC's cable ownership caps are overturned by the Court of Appeals, Cablevision might fetch a higher price from an adjacent incumbent cable company (like Time Warner Cable, or Comcast), and its shareholders might benefit more by holding MSG and becoming "arms merchants"--capitalizing on a regulatory environment that seems likely to promote increased subscription TV competition. So, the Blizzard hasn't started yet, but the temperature and the barometer are both falling. . .
July 14, 2009 3:36 PM
Competitive subscription TV providers are, most often, confronted with a blizzard of "no"s, or, even worse, a blizzard of "nose" when they ask if they can buy sports programming in a "high definition" format from the vertically-integrated owner of that local sports programming. Most regional sports programming (most college sports, and all professional sports except football) is owned by a regional programming company that is usually affiliated with a large cable TV company. The vertically-integrated sports programmers (big cable) are always fighting with competitive subscription TV providers (telco--ILEC and CLEC, competitive cable overbuilders, and satellite). The major source of contention is access to the "feeds" of local sports content (both "regular" and "high def"). Incumbent cable operators, who do not compete with one another, routinely make all proprietary programming available to other cable incumbents.
A good example of how vertically-integrated video providers can use their programming market power to reduce consumer welfare is described in the FCC complaint filed last week by Verizon against Madison Square Garden L.P. ("MSG"), and Cablevision. MSG is owned by Cablevision, and MSG owns the exclusive rights to produce and exhibit games of important local sports teams, such as the NY Knicks, NY Rangers, NY Islanders , NJ Devils, and the Buffalo Sabres. Providers of subscription TV in the NY metro area, and upstate and western New York, believe that the high definition feeds of these events are competitively significant. Every provider of subscription TV services that is offered the "high-def" format purchases it, and every other provider of subscription TV services wants to buy it.
In its complaint, Verizon claims that MSG is violating Section 628 of the Communications Act, which prohibits vertically-integrated distributors of satellite programming from acting in an unfair, or anticompetitive manner. Verizon contends that Cablevision is in violation of the Act because it refuses to sell Verizon its "high def" feed for sporting events, for which MSG owns the rights. Cablevision's response is that, because it transmits the "high def" feed to its distribution points via fiber (vs. satellite) transmission, it is not required to deal at all (much less, fairly) with any other programming distributor. This post is NOT about Verizon's complaint at the FCC.
Continue reading The Blizzard of Yaahhhs: Is Aspen Skiing A Lift Ticket To Fair Programming Terms?
April 6, 2009 1:26 AM
OK, I've got to stop chasing my tail, and I promise this will be my last blog (for at least a little while) on the subject of the subscription TV-cable programmer price spiral. Maybe it's just the natural insecurity of a new blogger, but I feel compelled to point out whenever someone with even more experience as a reporter is reporting on something I've noticed, which--in case you haven't been reading is my completely-consumer (I'm a telecom guy, remember) fixation on subscription TV prices. This past Friday, April 3d, Rob Pegoraro of the Washington Post wrote an on-line article, on the propagation of "included" channels and the unstoppable increase in subscription TV prices (the same article was printed in the Sunday, April 5th print edition of the post). Mr. Pegoraro made an observation, also from last week's Cable Show, that prices for subscription TV bundles were going higher--across the board--whether the provider be cable, telco, or satellite. His article makes some of the same observations that I have made, in a general sense, but he makes others, that are even more concise and compelling. You might have to register for the Post article, but it's short, and worth the read. However, his conclusions, and hoped-for solutions, are largely the same that surfaced in my March 24th post.
So, for those of you that don't want to set up a Post account, I'll copy the last three paragraphs of Mr. Pegoraro's article (from the on-line version, with active links), that describe the problem-solution dichotomy in a more succinct manner than I have managed to do so far:
Continue reading Stop The Video Loop! More Propagation of Complaints on Channel/Price Escalation
April 4, 2009 1:39 AM
Given last week's posts, one of the big attractions of the Cable Show was to hear how the big programmers viewed the upstart Internet content distributors. Therefore, I was especially intrigued by a panel presentation by big cable programmers cleverly titled, "Jumping Through (Hulu) Hoops: Programming for a New Video Paradigm". Every panelist seemed, in one sense or another, to regard the Internet as something to be either shunned, ignored, or to be indulged, but in limited amounts, and with great care. The primary concern with putting programming on line seemed to be jeopardizing the "dual" revenue stream that the large programmers get from subscriptions and advertising revenue. No one wanted to be "broadcasters" (not even the broadcasters--Fox and NBC)--in the sense of being reliant on advertising revenue alone.
The spectrum of opinions regarding the value of placing programming on the Internet seemed to go from the "more progressive" that saw some perceived value in either using the Internet to "monetize" (this was a word that was used a lot) non-first-run (i.e., repeat) programming, or in using the Internet to promote interest in new channels, or new shows on existing channels.
Continue reading Dr. Strange-Cable Programmer-Love: or How I Learned to Stop Worrying, and Love the Big Programmers, Big Distributors, and Big Subscription TV Prices . . . While I Wait on Internet TV
