Soul of the South Network logoFolks who have watched satellite free-to-air TV for a long time, or long-time readers of this blog, will recognize the name Equity Broadcasting. The basic business model for Equity was to own a whole lot of little TV stations, create the programming for all of them in one centralized place (Little Rock AR), then beam it out for broadcast via satellite. For FTA viewers, the great thing was that those signals were (almost always) unencrypted, which meant that fun and funky programming from over a dozen stations coast to coast were available for viewing from one satellite position.

Sadly, that didn’t last. In December 2008, Equity Media (as it was known then) filed for bankruptcy. After a few months of negotiations, Equity’s TV stations were sold at auction to various new owners. And within another couple of months, all those stations disappeared from satellite.

One of those stations, KKYK of Little Rock, is one of four being sold to two former Equity executives, Larry Morton and Greg Fess. And according to The Hollywood Reporter, Morton is going to be president of a new network, the Soul of the South Network (SSN), which will use KKYK’s studio and production facilities.

Here’s the surprising news from the Hollywood Reporter story: “The new venture has acquired assets from Equity, including the C.A.S.H. system, which stands for Central Automated Satellite Headend. This allows them to program stations anywhere in the country from a single hub in Little Rock. … However, the signal will not actually be fed by satellite. Instead, it will use a computer server ‘cloud based system’ to deliver its programming 24 hours a day.”

So that means that SSN acquired all the equipment that Equity used when it beamed channels all over the country, but it has decided it won’t use satellite this time. There are at least two possible explanations for this:

1. Satellite TV distribution is slowly dying. Satellites are incredibly expensive, and the internet is pretty darned cheap, so IP-based distribution is the wave of the future.

2. SSN might have trouble finding transponder space for rent. Wikipedia says that Intelsat’s claim on Equity in bankruptcy court was over $580,000. Now SSN isn’t Equity, but some of the people are the same, and the headquarters is the same. Would satellite operators treat SSN the way a new landlord treats a prospective tenant who walked out on last year’s rent? I have no idea.

I hope that SSN succeeds. We can always use more digital sub-channels, and we can always use more diversity. SSN’s birthplace will be the same hub that launched the Retro Television Network (RTV), one of the first and best of the sub-channel breed, so that’s a good omen. It’s too bad that SSN won’t be matching RTV’s satellite distribution.

Hammer on televisionThe president of the National Association of Broadcasters sent a letter to FCC asking it to stay out of coming retransmission fee disputes. In other words, the NAB doesn’t want the government to interfere when one of its stations holds cable or satellite viewers hostage for a better contract.

Now it’s normal for the NAB to want as much leverage as it can manage so its members can get as much money as they can get. That’s the capitalist way. What galls me is that the letter said the member stations want their negotiations to “remain free and market-based.”

When it comes to any given cable system, there is no “market” for broadcast programming. If a local system wants to show NBC, it can’t shop around to see which broadcaster will sell it at the best price. Its choices are to pay whatever the local NBC affiliate demands or to cause mutually assured damage by dropping NBC. The trouble with the second choice is that it hurts a lot of local NBC viewers as well as the station and the cable system.

For the public good, the government ought to get the cable and satellite systems to sit down with the broadcasters and hash out one equitable retransmission fee formula to be applied to the entire country. Such a formula would probably include an over-the-air channel’s percentage of viewers and the system’s number of subscribers. When a channel’s ratings go up or down, the cable or satellite system would adjust its payments higher or lower. If a channel’s ratings stayed below a certain threshold, it would receive no cash but would stay in the channel lineup, as with must-carry stations now.

The parties could revisit the formula every few years, and that would be it. We’d never see another local station go off a cable system over a retransmission dispute. The broadcasters would receive a truly fair, negotiated fee. But it’ll never happen unless and until the government folks (you know, we the people) insist.

Sezmi logo

This week, a unique delivery platform pulled out of the US market. Sezmi launched in Spring 2010 in Los Angeles, and it provided pretty standard TV fare in an unusual way. Sezmi subscribers used a special DVR to record normal over-the-air programming, pay-per-view movies (if they were hooked to the internet), and some cable networks. The difference was that Sezmi delivered those cable networks through an encrypted OTA signal that the special DVR unscrambled.

Taking a piece of OTA TV spectrum and using it for a pay-TV service is like putting a fence around some park land and charging visitors to get in. The presumption is that it’s a really bad thing for consumers. Sezmi wasn’t providing content that Los Angeles viewers couldn’t get from their cable or satellite TV providers; Sezmi was just doing it cheaper. And it’s easy to do cheaper when you piggyback on a public resource. That’s why I never liked Sezmi.

To be fair, Sezmi dropped the cable channel package less than a year later. It shifted its business model to be more of a standard OTA DVR plus internet-delivered movies. Which is what a Windows computer with Media Center will do for you for free, or what TiVo will do for you (beautifully) for a higher price. Whatever niche was left wasn’t enough, so Sezmi pulled the plug, shifting its focus to reselling its technologies to other providers.

Sure, Sezmi had stopped using OTA spectrum for pay-TV channels, but if I had given it any thought, I would have worried that Sezmi might start using it again if its national rollout of OTA DVRs had ever reached critical mass. So please forgive me for the shadenfreude, but I’m glad to see Sezmi leave town.

Bleak trees in SW ColoradoIn my continuing quest to gather first-hand information to answer the continuing question, I journeyed to southwest Colorado to see Mesa Verde National Park and its surrounding areas. The same digital tuner that picked up 62 channels outside Houston indicated that, in a second-floor room in Cortez CO, you can get exactly 0 over-the-air TV channels.

When I returned, I checked AntennaWeb, and it agreed completely. There’s a tiny set of repeater stations dozens of miles away, and that’s it.

On the way, I spent a night at the Movie Manor outside Monte Vista CO. Not only is it the only drive-in theater that I know of that still has a playground in front of the screen, all the motel rooms face the main screen and include a speaker for the movie. Highly recommended. But don’t bother with your OTA antenna, either; the same tuner also showed 0 channels here, too. Ditto about the distant repeaters.

So there you have it. In the middle of nowhere, where the land is gorgeous and desolate and sometimes as bleak as a forest of burned trees, maybe you can’t get any over-the-air TV channels very easily. Sounds like a great place for a satellite dish.

 

Erwin G. Krasnow

Erwin G. Krasnow

There was a scary report issued this week by Erwin Krasnow, who is a former NAB General Counsel (according to Broadcasting & Cable’s John Eggerton) and/or former FCC General Counsel (according to AllAccess.com). In an opinion piece (PDF) released by the DC-based The Media Institute, Krasnow calls on the FCC to “(r)enounce the discredited concept of public ownership of the airwaves”.

(Important Aside: By an odd coincidence, I’ve been reading one of Krasnow’s books off and on for a few months. Profitably Buying and Selling Broadcast Stations seems to be an excellent guide for dealing with contracts and other necessary details as you’re working out a deal on a station. It’s also as dry as burnt toast. I’d love to have Krasnow in my corner should I ever negotiate a purchase. And I believe that my use of his promotional photo from his page on his firm’s site constitutes Fair Use. Please don’t hurt me, oh mighty lawyers!)

In particular, the paper seems to want to disprove FCC Commissioner Michael Copps, who said that “using the public airwaves is a privilege — a lucrative one and I fear that the FCC has not done enough to stand up for the public interest.” Quoting Ayn Rand and Dean Rusk, Krasnow builds an excellent prima facie case that claiming public ownership, and thereby inviting public regulation, is as absurd as requiring a license to use sunlight to grow crops.

But the paper gives little attention to the real problem: You can’t just stick an antenna on your roof and start broadcasting. It’s true that new technologies (such as blogs) give us alternatives, but that’s not the point. No other communication medium is as ubiquitous as over-the-air TV and radio. The number of simultaneous channels in any given location really is finite. Each broadcast station effectively prevents any number of possible competing stations from being heard by the thousands or millions of receivers within range. That’s why the public deserves a seat at the table as we discuss what responsibilities are included in each broadcast license.