Why Does The Goverment Hate Satellite Service Providers?

from the Physics,-Economics,-and-Definition-of-'Fair' dept

Earlier this week, Rep. Bart Stupak, from rural Michigan, introduced a bill to require Dish Network and DirecTV (SatTV) to carry local TV channels in all US markets. Stupak said that the current practice of only carrying local channels for major population centers is unfair to rural citizens. But Stupak seems to miss two important economic and scientific factors against his wishes, as well as an understanding of competition and what is fair

Physics sets hard limits to how many channels of TV SatTV can broadcast from their existing satellites. And with the public now clamoring for more HDTV, SatTV is now desperately trying to shoe-horn more HD channels into the limited capacity they have, so they can compete effectively with cable (an important role). SatTV carriers must trade-off between content for the whole country, and content for local audiences. In the case of large metro cities, the audience size tips the trade-off towards local content. Yet Stupak seems to think that it’s worth using up scarce nationwide capacity to carry local content for every town that has a TV station. Ridiculous. The needs of the many subjugated to the needs of the few?

Then Stupak also seems to ignore the economic argument that these SatTV enterprises are businesses trying to stay afloat. They are not public services. And the SatTV companies need to deliver a product that can attract a sizeable audience, or the service will be a sure money loser.

If Stupak thinks it’s fair to force SatTV to provide product for small towns, they why not force the same of the NFL or airlines? Shouldn’t we also require the NFL to put a team in any town that wants one, or is the NFL unfairly discriminating against rural America? And airlines should be required to have flights to every airport, too, right Rep. Stupak? Sir, these aren’t public services, nor charities. Your Bill would increase costs to all of us, and reduce available services to the nation by redirecting resources to sparsely populate areas.

I’ve said it before, and I know I’ll get hate responses when I say it again, but there are trade-offs people make when they choose to live in the city, OR in the countryside. Tough. We city folk trade off fresh air, open spaces, bucolic lifestyles, good schools, flora, ample space and land, open roads and more. Rural people sacrifice retail options, entertaiment services, Internet access, and more. Life is full of trade-off decisions. Not everyone makes the same choices, and that IS fair…in fact it should be celebrated and called freedom.

Does the government just dislike satellite services for some reason? Mike has steadily covered the impact of a slow government approval of a Sirius-XM merger. While the merger definitely reduced competitors in the sat radio space, that space is NOT the market in which those two companies operate. If they go broke in part because of gov’t meddling, we will only then see a significant reduction in competition in the much wider portable audio entertainment industry, which is the actual market under consideration.

In toto, SatTV has been a fantastic boon for rural dwellers, offering them a range of entertainment options that were never before available outside of major cities. This is the upside of a distribution network that targets the whole country with one signal. The downside is a reduced capacity for local programming. As a bonus to rural dwellers, although satellite Internet isn’t great, at least it gives you an option. In town, SatTV delivery market, especially back in the day when cable was unchallenged by the telcos. Aren’t satellite services, recent arrivals on the scene, competition engines, and a market success story? Why would the congressman want to squeeze this winner until it can’t breathe?

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Comments on “Why Does The Goverment Hate Satellite Service Providers?”

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55 Comments
RDHalstead says:

Re: meh

I have Satellite (DISH Network), cable, and OTA TV. I can receive at least 15 to 20 digital stations (not with rabbit ears ) and have found satellite to be far superior to cable. The only reason we have cable is for the high speed Internet. The quality of even the Weather Channel outshines the best cable HD I can get. Many cable companies compress the digital stations as much as possible, losing quality in the process. Even back in the days of the BUG (Big Ugly Dish) analog C-Band satellite had better quality than cable. It’s easy to compare when I can pick the same channel on each and instantly switch between them. Until the satellites went HD the OTA signals had the best picture. OTOH with 1080i being the standard on HD OTA and my satellite provider without a lot of compression they are both good. The only down side of the satellite is loss of signal during really bad weather.

Anonymous Coward says:

It would help to know just how many additional channels we’re talking about here. If it’s only a small fraction of the number of channels (local and national) that the satTV services already carry, then make them carry the extra channels. After all, cable companies have to carry all local channels, too. But if it would significantly increase the number of channels carried (e.g. double or more), then the finiteness of bandwidth argument wins out.

DTV employee says:

Re: Re:

yea, but theres a difference. The cable company uses local broadcast centers to deliver the local tv to that region, Satties use a different method. We broadcast everything up to the satellite, then back down to earth. So, the problem becomes how do you fit everything into a sattelite feed. Even if they decide to divide the satellite footprint into smaller individual sections, they will still be required to upload all the local channels from all over the US. This severely restricts the pipeline going up to the satellite, limiting the number of channels available to the public.
Commonly what Dtv does right now is build dishes that are capable of picking up the HD local channels being broadcast over the air by the stations themselves, and mixes them into the Dtv channels.

dmhoo29 says:

Sat. TV and Local channels

Derek Kerton, You say use no to his suggestion and also say they don’t have enough space for local channels. BULL .
Why are we forced to pay $xxx.xx amount of $’s for some of the crap we’re forced to pay for. I really have no use for all these infomercial channels,cooking,15 plus News channels and half all talk about money.A gazillion sports channels.So I can not watch my game because I did not upgrade to get the other channel,NFL network.
LAST but not least CSPAN 1,2.? maybe more. What about the all new BABY channel. Last time I asked my 6 mo. old grandson,(No Reply) he burps the not interested burp.LOL
The congress can give up their stupid channels for locals?maybe? hmmm bet not.
Problem is, No one person wants to give.
So,we are screwed.

dmhoo29 says:

Sat. TV and Local channels

Derek Kerton, You say no to his suggestion and also say they don’t have enough space for local channels. BULL .
Why are we forced to pay $xxx.xx amount of $’s for some of the crap we’re forced to pay for. I really have no use for all these infomercial channels,cooking,15 plus News channels and half all talk about money.A gazillion sports channels.So I can not watch my game because I did not upgrade to get the other channel,NFL network.
LAST but not least CSPAN 1,2.? maybe more. What about the all new BABY channel. Last time I asked my 6 mo. old grandson,(No Reply) he burps the not interested burp.LOL
The congress can give up their stupid channels for locals?maybe? hmmm bet not.
Problem is, No one person wants to give.
So,we are screwed.

Grem135 (profile) says:

Local channels

Creful what you wish for… Remember when the Sat companys didnt even have local channels? I do, and i dont want them to go back to that because some clown in congress cant get it through his thick scull that it JUST IS NOT POSSIBLE to make every local channel available on satelite. I do live in the city, but have family in rural areas that cant get locals via SatTV and they rarely (if ever)watch local TV on rabbit ears becuase the channels suck. DVT offers the network feed to those that cant get locals, so is not like they have to miss thier favorite shows.

Ima Fish (profile) says:

I see how the government could compel or force cable companies to carry local programing. Because cable companies use easements over private and public lands, to run their lines, they’re bound by our rules.

I’m not saying that governments should dictate programing, I’m just saying I can see a legal basis for the authority. “If you want to use my land, I’m want something in return.”

But I don’t see how the government could have any authority over satellite programing. As far as I know they’re not using any government owned spectrum, but I could be wrong about that. Any ideas?

Gunnar says:

Re: What about promoting broadband?

“Lot’s of talk about spending my tax money bringing broadband to rural areas that have NO ACCESS to broadband.

Hello? What about satellite broadband? Talk about government screwing satellite providers.”

Satellite broadband is a pretty weak choice with it’s high latency, speeds that rival the slowest DSL connections, high expense, and the fact that it’s affected by weather conditions.

Erik M Jacobs (user link) says:

Lobbyists, anyone?

I believe the word is “lobbyist,” and the cable industry has many of them. Cable knows that Satellite can’t compete because of the limited bandwidth on existing birds. That is why the whole locals provision exists – cable lobbied for it in order to squash the satellite providers.

Hell, DirecTV used lobbying to force certain required content regulation on the sat industry to beat up Dish because they knew that Dish had less birds and therefore less bandwidth. (At least that’s my understanding of one situation).

There is likely a cable lobbyist in this Rep’s pocket.

jilocasin (profile) says:

I would opt ofr networks over local channels

The physics arguments are compelling. Yes Sat. can’t carry every local channel across the country, given.

Having said that, they need to allow everyone to watch network television, even if they don’t live in a major metro area. While living in middle America with sat. t.v. I was told that I couldn’t get ABC/NBC/etc. because I wasn’t in a major metro area and I didn’t fall into the exception of ‘back woods’ rural that didn’t have a local affiliate.

If you want to serve rural (and middle ) America while keeping within the bounds of physics, mandating that they carry at least 1 channel of each of the networks that’s available to all subscribers would be a start.

Dave (profile) says:

I agree with the article, even if I'm a "beneficiary"

I admit it. I live in western Wyoming, surrounded by mountains. Entertainment content is hard to come by here. I have satellite TV, but I really could care less about local content. That’s because my local area has been determined to be Salt Lake City, Utah. I can’t choose any of the TV stations airing from Casper, WY or Denver- which are much more relevent.

Also on topic, XM/Sirius is VERY popular around here, where it can be a challenge to pull in ANY fm station while driving.

Finally, I’d like to point out that the typical entertainment alternative, broadband, isn’t really practical around here, when “broadband” is 256K dsl.

Unfortunately, I completely understand that these businesses can’t cater to the few of us rural folk. You’re right, it’s my choice.

John Galt says:

Can't survive on Rural Alone

I had been a SatTV subscriber in an area that has three different options for television (cable, U-Verse and OTA).

I left the cable company to go with Dish because I liked the all digital idea and they had a nice array of HD choices. I left them in January for U-Verse because I could get better service for $50 less (when bundled with broadband).

SatTV providers are not going to survive if their only market is rural folks who don’t have any other choice. They need to attract folks like me — in a major market — and I don’t care about all of the new HD channels they add to rural markets, I care about how many HD channels I can receive in comparison to their competition.

Anonymous Coward says:

While I was in the Satellite TV business (and its been a few years ago) the only people who could reliably get access to network programming (ie.. ABC, NBC, CBS) were those folks who did not have local networks. Some big issue with re-broadcast rights and whether or not the sat companies were willing to pay enough. At that time (mid to late 90’s) DirecTV only offered networks as East or West. Then, suddenly, local channels became available. My big point is that the people he seems most concerned with are the ones who don’t actually have “local” channels anyway. Maybe nearby, but not really local, and those folks already have access to network programming, so what’s his REAL issue?

PittCaleb (user link) says:

Cable?

I would be in favor of this bill only if they also REQUIRED cable companies to wire every single house throughout the nation!

I lived in Rural Michigan for 10 years. I had a comcast line on a right-of-way on my property. But they refused to give me access to cable television, or internet, until the final 2 years I lived there (this is ’98 – ’08, just a few miles outside of Ann Arbor).

Until Cable is REQUIRED to give local stations to RURAL citizens, they can not require Satellite to provide a service to these very same people? Think about it, they’re requiring universal access to DBS. Why can’t DBS simply state, “we don’t service ‘your town'” just like some cable companies do. They don’t have a coverage mandate, why then should DBS?

PittCaleb

RC Winter says:

What does happen....

I live out in the country, between 2 metropolitan areas, each about 90+ from each area. I am 1 US mile away from the cut off point that forces getting “local” news from the city the farthest away. I would prefer to get the local information from the other city. But the only way to get that is to rent a PO Box another city that falls within the imaginary line that says I can get the local channels from the other city.

Daniel L says:

Let me get this straight

The Satellite companies broadcast signals from satellites they own, to people that want that pay for that content. The rep is arguing that because they don’t carry other content, it’s somehow unfair to people that have already chosen to pay for something that they KNOW doesn’t contain said content?

Can I go to McDonald’s, purchase a Big Mac Meal, then demand they carry tacos?

Anonymous Coward says:

How many more is it, really?

The article doesn’t provide any links to the actual legislation, but does say

Of the 210 geographic markets delineated by regulators, satellite companies do not provide local programing in 31, according to Stupak.

So they are already carrying the local stations in 210 markets but an additional 31 to cover them all would be unreasonable? And then there’s this,

Stupak, who serves on a U.S. House of Representatives’ Internet subcommittee, said he has been asking the satellite companies for years to expand local service to all markets, but to no avail.

He cited a 2003 congressional hearing where DirecTV pledged to carry local broadcasting service nationwide.

“Unfortunately, without a hard date established in satellite law, this pledge has gone unfulfilled,” he said.

So, they already agreed to do this anyway, but now they’re just wanting to welsh.

Don’t forget, they’re using the public airwaves under certain terms and conditions. If they don’t like them, they don’t have to use the airwaves.

Disclosure: I have no stake in the satellite TV industry and no incentive to sugarcoat it. Sorry.

Sputnik says:

Who watches the knitting channel ?

Although I agree with your argument, I wonder why they do not provide a few local channels in place things like the knitting channel. Does anyone actually watch this ?

And on a tangent, do the countless channels whose sole purpose is to sell you junk jewlery really have that many viewers ? If so, does it need to be in HD ?

Michael Talpas (profile) says:

“Life is full of trade-off decisions. Not everyone makes the same choices, and that IS fair…in fact it should be celebrated and called freedom.”

Amen, brother! Preach on!

I’m a city boy myself, but I can see the draw of living in the country. One thing I like about the country: Being able to look up and see stars. Why would I want to watch them on TV, after that?

But, I’m addicted to the internet. *Sigh* I know. It’s a terrible habit, but I just can’t stop.

Indian Girls (user link) says:

read this

Why are we forced to pay $xxx.xx amount of $’s for some of the crap we’re forced to pay for. I really have no use for all these infomercial channels,cooking,15 plus News channels and half all talk about money.A gazillion sports channels.So I can not watch my game because I did not upgrade to get the other channel,NFL network.
LAST but not least CSPAN 1,2.? maybe more. What about the all new BABY channel. Last time I asked my 6 mo. old grandson,(No Reply) he burps the not interested burp.LOL
The congress can give up their stupid channels for locals?maybe? hmmm bet not.
Problem is, No one person wants to give.
So,we are screwed.

Bien and Robinson (user link) says:

Totally True...

The truth is most people don’t care about all their channels, but I think giving people too much choice or customization will hurt the bottom line for these cable service providers.

I think you need to give the internet more credit, eventually it will be replacing all our entertainment mediums as it will be the preferred distribution system for everything: TV, news, games, etc.

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