I haven't given out the Bullshit of the Month award since early this year, as organizations seem to have focused on more important things than bogus press releases and disingenuous comments. You know, items like a global financial meltdown and the pending U.S. election--the former caused by bullshit, the latter a huge producer thereof.
But, I woke up this morning to a story in Crain's Chicago Business that set off the BS meter. In a nutshell, the hullabaloo is that public access channels (PEGs, for Public, Education, and Government) on the AT&T U-Verse IPTV system are grouped under a single program guide channel (99). According to Greg Hinz's article, viewers who want to watch a PEG have to navigate first to channel 99, then to a menu of PEGs. This is a big departure from the way things work on traditional cable systems, where the PEGs show up as standard channels in the program guide, leaving some number of viewers up in arms. A quasi-government group has claimed that for AT&T to make the PEGs look like regular channels, it'd cost $200k per channel. That's not per metropolitan area or headend. That's per channel. And that's mind-boggling.
Now, if you know me, you know that I'd rather watch ESPN Classic Deportes 6 than watch most PEG content. As Hinz notes, satellite providers don't have to carry PEG channels; as a DirecTV subscriber, I remain blissfully unaware of the activities of both my city council and my local high school sports teams. Even if PEGs were available to me, I'd turn them off on my program guide, just as I do other channels that don't interest me. But, back in Chicagoland, The Folks watch my alma mater's football and baseball games on a (Comcast) PEG channel, even if they've been to the game. They'll even TiVo them occasionally, which certainly gives me pause.
But, I'm having trouble grokking how putting up a PEG channel can cost $200k. Sure, there's the burden of encoders and ingestion and transport and grooming and lots of other shtuff in the IPTV delivery chain. Plus, AT&T's not exactly a small company, so I wouldn't be surprised if lots of those unlocked iPhones floating around China and Russia are being amortized by the TV guys.
The article quotes the executive director of one of affected PEG channels as saying that AT&T could rejigger their system to allow PEG channels to appear inline in the program guide, which is the status quo on traditional (QAM-delivered) Chicago cable systems. On the other hand, the Congressional Research Service issued a report yesterday that makes the $200k per channel claim; extrapolated to the entire Chicago area, that's $40 million alone. Frankly, maybe both sides are right. I don't know how many markets U-Verse has launched in, but at tens of millions of dollars per DMA to add PEGs, that's a dealbreaker. I'm not entirely certain I trust the CRS, due to their almost total lack of transparency, despite being a publicly-funded think tank. These aren't black programs, for Pete's sake. AT&T quotes yesterday's CRS report, but like so many things CRS, the report isn't publicly available; AT&T could do themselves a huge PR favor by making the CRS report available for broad public distribution. Since OpenCRS doesn't have their hands on it yet, I can't actually determine how CRS arrived at this $200k number.
Here's what I can't get my arms around. IPTV is a terribly flexible system...arguably, way more flexible than traditional QAM-delivered cable systems. In theory, IPTV systems can deliver an unlimited number of channels to a user, since the user is simply tuning to a multicast stream, rather than needing access to an entire broadcast program tier over a (let's say) 860 MHz QAM plant, which is restricted by available bandwidth. Cable's migration from analog to digital has allowed a multi-fold increase in terms of the number of channels which can be squashed into this limited number of 6 MHz slots; of course, the evolution from standard definition to high definition has given back some of that benefit, but the world's still a better place now.
The question becomes, is AT&T's architecture not flexible enough to allow additional channels into the program guide? Is the program guide real estate too valuable to allow slots to be cluttered up with PEG channels? I'm sure I'm gonna annoy the PEG crowd with this statement, but I don't see PEG viewers driving the type of CPMs AT&T's ad sales team is looking for, so maybe that's a contributing factor to the $200k per channel number.
Maybe it's not AT&T's fault at all. I left Microsoft's TV group a whole bunch of years ago, so I'm not sure what their platform capabilities are these days, but I guess it's possible that the Microsoft TV platform on which U-Verse is based isn't capable of easily doing add/drop of PEG channels. Heck, who knows. I do know that I've seen DLNA program guide demos which seamlessly integrate broadcast television, video-on-demand, IP video (e.g., YouTube) and in-home content (from a PC or network-attached storage device) into a single user interface, so it's at least possible to prototype, if not actually deliver today.
Maybe this is all the FCC's fault, on multiple levels. I'm sure that the cable guys would love to not be carrying PEG channels today, just as the satellite guys aren't; but, the FCC requires cable to carry PEG, while satellite isn't mandated to--and with no mandate, there's no reason to burn the transponder space. You can argue (fruitlessly) all day about the franchise rights of IPTV carriers vs. cable vs. satellite vs. Verizon FiOS, which is a QAM-IPTV hybrid. And, based on where you stand in terms of PEG carriage, NFL Sunday Ticket or MLB Extra Innings carriage, net neutrality, et.al., you likely have an opinion on must-carry. You may've even expressed that opinion to the FCC. Maybe you even want a la carte pricing--which to me is a crock, but that's a discussion for another time.
Here's another statement that'll come across as heretical to the PEG crowd, but I'm throwing it out there--maybe the time for local must-carry has simply passed, and the FCC needs to throw out the mandate altogether. Would I advocate that? No way--while I might be apathetic about the content available on PEG, I know how passionately lots of folks are when it comes to being able to view their local content. I'm also not naive enough to believe (as do many friends and colleagues here in Silicon Valley) that this type of content should be solely delivered over the Internet. First, the computer is the wrong venue for public access television; having it available on-demand from the Internet is great, but I really think that PEG content is TV content. Second, the audience for this type type of content may not own a computer, have broadband access, or both, but I do think it's a fair trade-off to require public service providers to have to make content available on TV in exchange for local franchise rights. Finally, public interest content is intended to be available to all. The problem is, the FCC mandate requiring cable, but not satellite, to carry PEGs already provides one massive exception, so maybe AT&T is to be congratulated for providing any type of PEG carriage at all, despite the fact that it's not easy to find and impossible to record. I simply don't know.
Heck, maybe I'm not even calling bullshit on AT&T. Maybe I'm just calling bullshit on the Congressional Research Service for that $200k per channel figure. Am I the only one that finds ironic the alternate meaning for their acronym, CRS?
Can't remember shit.