How does this cable (or dish etc) thing work anyway?

Factual Questions
1

So ABC cut itself off from Cablevision. Which recently had problems with HGTV too. so:

  1. Why is Cablevision being picked on in particular? It doesn’t seem like this sort of thing is happening to Dish network or FIOS or other cable companies. Did they negotiate deals that were more favorable to the channels? If so, is that reflected in their charge to customers?

  2. How does the whole payment thing work? When I was a kid it seemed like a simple schema - cable was a way to get a better signal - they have a big dish that gets great signal and they pass it on to us, for a fee that covers the cost of their technology. You could also pay an extra fee for commercial free movie stations such as HBO. Now it seems like there’s all these inbetween stations, that have commercials, but you still have to pay extra for them (although they tend to be bundled into random packages). Is there any logic to all this, or is it a matter of every single channel negotiating with every different service provider for whatever they can get?

  3. What is the legal story? I mean, technologically speaking, Cablevision could just suck the free HD signal from the airwaves, and port them through their wires. Is this legal? They are essentially not doing anything different than an antenna on your house, but on a bigger scale. Could they legally do that if they wanted to? It seems like that’s just what they were doing anyway when cable first started.

  4. Trying to cut through the propaganda - what’s really going on here? For example, ABC claims Cablevision is charging $18 for basic cable and they should be getting a piece of that. But I got the impression that $18 for basic was not for content but service i.e. that I was paying not for CBS and ABC and NBC, but for the maintenance of the wires and the salary of cable staff, etc. What’s the scoop?

  5. More to the point: unlike HGTV, ABC is shown free over the airwaves! What is the rationale for charging for that?

2

IANAL. This is just my best guess.

  1. Cablevision isn’t sending any of the $ they are collecting for basic cable subscribers to ABC. I’m not sure why it took ABC so long to fight back about this, but I take it they have arrangements in place with the other cable companies which satisfy them.

  2. A portion of the bill you pay is supposed to be passed on to the stations. The cable company keeps most of it (which is used for their service and equipment costs, and paying their employees, etc) and each station gets a couple cents per customer. Apparently ABC is getting 0 cents from CV right now.

  3. Rebroadcasting another network’s signal without their permission would be illegal. It’s the same way you can’t set up your own tree of cable splitters in your backyard so that the neighborhood can watch your HBO feed.

  4. I don’t know, but I would expect that ABC (and all the other networks) SHOULD be getting a cut in exchange for providing them access to their channel to the subscribers.

  5. Again, CV can’t just do whatever they want with over the air signals. If they are charging customers to access those channels through their system, it needs to be with permission of the networks. ABC is risinding their permission, and just in time for the Oscars.

I have Time Warner, so this doesn’t affect me, but can anyone with Cablevision report if ABC was actually cut? This same thing happened a couple years ago between CV and YES, back when I lived in CT. There was an entire baseball season where we didn’t get Yankees games, and MANY people got a satellite dish just for that channel.

3

Here’s the basic rundown of how it works.

OTA (Over the air) TV stations have a few options when it comes to cable/dish coverage.

In the old days any cable company was free to pick up any signal OTA they could and put it on their system.

Well this was problematic in a lot of areas. First of all TV is sold via markets which are established by Nielsen, not the FCC. (The FCC uses the Nielsen markets, because it’s convenient, but they have nothing to do with the FCC)

So let’s say I live in South Bend, Indiana and want to buy time of the local NBC affiliate. So I do. Well in the old days if a cable company could put up a big antenna and pick up WMAQ the NBC station from Chicago (which isn’t hard to do), I the advertiser might be paying for a commerical on the local South Bend NBC station when people are watching the NBC station from Chicago.

Clearly this is a problem, and it was just one of them.

Another problem is the TV stations said, they should be paid if cable / dish re-distributes their programming. The cable companies replied, accurately they were being paid, in the form of higher ad rates because with cable their signals went farther and reached more viewers

Another problem was the cable companies were free to carry only the stations they wanted. This meant that some weaker channels were left out. How could they get stronger if they weren’t allowed to compete on an equal footing? This makes sense as well.

So in the early 90s, the FCC put into place a thing called “Must Carry.”

This says that for every Nielsen market (Designated Market Area or DMA), every TV stations has a right to request that its signal be carried on every cable system throughout the market (There are a few very odd exceptions to this rule).

So this addressed on problem. The weaker TV stations could demand that their signal be carried. And since on cable all the pictures are equal, it puts them on equal footing.

But this didn’t solve the problem of TV stations saying they should be paid for their programming.

So the FCC did this. It said, if a TV station requests “Must carry” status, it doesn’t cost the cable system anything.

So this means weak stations (usually infomercial stations and relgious stations) now get on cable but the cable company doesn’t get charged to carry it)

So here is where the alternative comes in.

If a station doesn’t request “must carry,” they are free to negotiate ANY fee they want. Now the term “fee” is misleading, because it makes you think of money.

But that isn’t always the case. In Chicago, WPWR - Channel 50 was a popular station (this was before FOX bought it). So a cable company naturally wanted to carry it. But most cable companies wouldn’t pay WPWR to carry it. So WPWR thought, what can we do.

The negotiated to put WPWR which was on Channel 50 over the air, to be put on cable channel 8. Why channel 8? Because WLS (ABC) is on channel 7 and WGN (the biggest independent back then) was on channel 9. So when people clicked around they’d go between channels 7 and 9 and there would be WPWR and people might watch.

So in this case the “fee” was not money but channel placement.

Now sometimes another channel can be a fee. WGN-TV in Chicago, also has another channel called CLTV (Chicagoland TV News). Part of WGN’s fee is that if the cable company wants to carry WGN, they also have to carry CLTV.

This explains why cable companies carry a lot of awful networks. Even though they are low rated they are owned by CBS or FOX or Warner Brothers. To get one channel they have to take the lower rated channels too.

See how it works. You can negotiate your “Fee” as virtually anything. It can be money, channel placment, the requirement of adding other channels to a combination of that or anything.

Most cable companies get feeds fed directly to them and no longer pick up the signals over the air. This explains on 9-11 after the WTC fell the OTA viewers were cut off but cable viewers still go the TV stations. (WCBS had a backup transmitter on the Empire State so it stayed on).

Now the situation is getting even more complex.

In the USA most stations are affiliated not OWNED by the network.

For instance FOX owns TV stations in NYC, LA, Chicago, Philly but in the 5th largest market they don’t own that station KTVU, they simply affiliate with it. That is they provide programming.

Now the networks are saying that they should be getting a piece of the compensation as a price for affiliations.

I’ll make up some numbers here. So Fox is sayins if KTVU in Oakland/SF, get’s $1,000 from the cable company in compensation for carrying the signal, FOX the network should get a piece of that $1,000. (I just made those numbers up for an example)

It was revealed after the fact that WPGA in Macon dropped ABC when ABC started pushing for part of the cable money. WPGA maintained that ABC programming was too “racy” so it dropped the network but later it came out that that was only a minor part of the reason and the main reason was the demand by ABC for part of the cable money

4

Their contract is coming up. Fox and Time Warner Cable had a dustup in the pages of the Times a few months back, and a few years ago DishNetwork and a cable provider were having issues. As advertising revenue decreases, all the channels are trying to get money any way they can.

5

Cutting through everything else, it comes down to this. Cable operators “pay” (or somehow negotiate) for cable channels – whether it’s HGTV, CNN, MTV or whatever. So the over-the-air stations feel that the cable system should pay them, as well. After all, on almost any given night, more people are watching any given program major network program than any cable network program.

The cable operators argue back that a) the cable networks generally give something back to the cable operators (you’ll notice that a lot of cable channels have a minute or two of commercial time that gets sold by the cable operator to local advertisers) while the local channels basically serve as the cable operators’ loss-leaders; and b) that since roughly 85% of households are paying for either cable or satellite service, the broadcast stations had better wake up and recognize where their viewers are coming from.

6

It cut out at midnight (I was watching a Lost repeat) and came back a little bit after the start of the Oscars.

7

Thanks for the responses, all. On a related note, during ABC’s offtime, cablevision had a big repeating speech thing. One of the things they mentioned was that you could watch ABC OTA. This got me and my friend wondering - unlike old CRTs all the new flat panels don’t seem to have rabbit ears on them. Are they even capable of getting OTA signal by themselves, or do they all require a house antenna now? We flipped through the tv menu but couldn’t find anything applicable.

8

Thanks for the long write up Markxxx. Very informative.

9

There are still a few that come with built-in antennas, but for the most part you’ll have to buy an antenna and plug it into the cable/antenna input.

Since most (but not all) TV stations have been moved to the UHF band with the switch to digital, the rabbit ears generally won’t work as well as a UHF bowtie or loop antenna.