DirecTV Drops FCC Complaint vs. In Demand

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lee78221

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DirecTV Inc. withdrew its program-access complaint at the Federal Communications Commission against In Demand Networks, ending a dispute that flared last June over the pricing of HD-programming services.

DirecTV -- the largest direct-broadcast satellite pay TV provider, with about 15 million subscribers -- asked the FCC Friday to dismiss the complaint "without prejudice" -- a condition that would allow DirecTV to file a similar complaint at a later date.

DirecTV sources declined to comment. A cable source familiar with the issue argued that DirecTV ended the controversy because the satellite carrier knew it was unlikely to prevail.

In the original complaint, DirecTV alleged price discrimination with regard to access to In Demand's two HD channels. In Demand's rate card called for an identical license fee based on the number of digital subscribers served by a pay TV distributor, cable or satellite

DirecTV alleged that In Demand's fee structure would result in it having to pay much more than cable for the same programming because all of its customers were digital.

The DBS provider added that the license fee for both satellite and cable should be related to the number of HD subscribers.

In Demand is owned by Time Warner Inc., Comcast Corp. and Cox Communications Inc.
http://www.multichannel.com/article/CA6323803.html?display=Breaking+News
 
It seems to me that InDemand has worked a truce because I'm hearing that Verizon is near a deal with InDemand for all of the InDemand content such as the sports packages. Only time will tell but it seems that two companies might be near deals.
 
charper1 said:
Any idea what, if anything, DirecTV gave as a consesion?

I have no frickin idea as DirecTV has been hush hush for the last several months hence my lack of posting in this area. I did know that Verizon was putting massive amounts of pressure on InDemand and they were ready to put a massive TV ad spree with nearly all local TV stations in the country telling them how these cable companies are refusing to offer Verizon the ability to provide your favorite sports packages while also stating the cable companies that jointly owned InDemand. I heard this was going to be a very very dirty but true series of ads. Also the two InHD could never have been withheld from other companies like DirecTV and everyone assumed that just because their logo said only on cable that it meant that DirecTV or others couldn't get it when in fact that wasn't the case but InHD also wasn't being untrue either as like I said before it wasn't on anything else but cable.

The issue has always been pricing and InDemand was taking advantage of Verizon because nearly 98% of Verizon FIOS TV customers would be digital. The issue was that InDemand was pricing their offerings based on chunks so that the more customers you had that were digital put said company in another chunk with a set total figure that somehow when devided between the number of customers kept getting bigger. Because of this if Verizon worked the deal they were offered they would have to charge almost 100 bucks more for each of the sports packages compared to what Comcast and such were charging.

They did the opposite with Voom as they required Voom to reach a miniumum amount of customers before their prices went down and by accepting this deal they could get the two InHD channels but at the pricing schedule it would be priced in a seperate package costing over ten bucks a month.

The sports packages are what is making this issue get resolved because if InDemand doesn't play fair Verizon was ready to smear them all over the papers, TV and internet and nothing cable could say would sound good unless they lied and if they lied it would only make things 100 times worse and spark a true investigation. I think InDemand finally figured out that nothing good could come out of these practices so they caved in and played fair. Every big company will do everything they can to screw the other but they do know when they are beat.
 
charper1 said:
So I wonder why News Corp never went this way? Just unwilling to spend the huge ad dollars?
Cable might just start dropping those "fox sports" channels and fox entertainment and news channels
 
juan said:
Cable might just start dropping those "fox sports" channels and fox entertainment and news channels


Can't if they have current carriage contracts and it would also be very unwise. It would also be very unwelcome be their subs and would end up being counterproductive.
 
Well to me, if Longhorn is correct, we may start to see some of the more coveted "cable only" channels on the cable alternative providers.
 
charper1 said:
Well to me, if Longhorn is correct, we may start to see some of the more coveted "cable only" channels on the cable alternative providers.

Sounds good to me! Go get 'em, Charlie Ergen!! :hungry:

---Doug
 
There are tons of Boston area sports fans who are D* subs like myself waiting with baited breath to see if a deal has in fact been reached.

Im practically drooling on myself with the thought of having the Sox in HD!
 
charper1 said:
same thing i was thinking; Juan. and it is without prejudice (can be filled again at will)

and personaly i would refiled it today with the remark from indemand saying that directv realise they wouldent win. to me that begs for a company to get "sued" (or whatever was done) again, if your gonna bash directv, at least wait till the ink has dried on them dropping the complaint.

personaly i feel that theses sort of channels where the "owners" base the prices on the number of digital subs should be like this...the actual subscribers the the channel or package are counted, and the benefit would be the more subs the provider gets to pay for that channel/package the better the rate is on per sub. i.e 1million subs pay say 75cents per, 2milion 65 cents, 5 milion 50 cents.it would benefit both, the content owner would get greater coveraage of their channels thus justifying higher rates to advertise on their stations of the "fan base" they reach, and directv,dish, ect would get the channels they want to offer at a fair price and would encourage them to agressively upsell their subs to these channels to save money, money that can be used for improving stb or new sats, ect....

does anyone see a issue with my logic?
 
We are getting confused again so I shall go over this all again and in more details.

InDemand is a company that is jointly owned by several cable companies such as Comcast, Cox, Time Warner Cable and Bright House Networks to name most.

InDemand owns several programming offerings that I'll list below.

InDemand has many of the PPV and PPV On Demand offerings cable company customers enjoy today.

InDemand also owns InHD and InHD2.

InDemand also owns many of the PPV sports packages that I'll list below.

NBA League Pass.
MLB Extra Innings.
MLS Direct Kick.
NHL Center Ice.
Nascar InCar.
Howerd Stern On Demand.

Now all the cable companies pretty much offer InHD and InHD2 along with the PPV movie and sports offerings.

DirecTV and Dish Network have contracts in place for those sports packages as these contracts were done before all this InHD stuff. DirecTV and Dish Network use other companies for PPV movies. I know DirecTV uses blockbuster and I don't know what Dish Network uses. So its no suprise that Voom never got the sports packages nor the two InHD channels. Its also no suprise that DirecTV and Dish Network don't carry the two InHD channels either.

Because Verizon is so new they now have to deal with InDemand to not just get the two InHD channels but also to gain access to the sports subscriptions that all the companies have today. As long as these cable companies can keep Verizon from offering these sports packages they can never really compete with the cable companies. This gives you an overview of the InDemand issues.

Now onto the RSN issues at hand. Today the cable companies have a little loophole in the law they are using that says as long as a channel never touches a satellite it can be withheld from any company that must use a satellite to feed it to customers. Now nearly all channels today are "hosted" on a satellite which all the companies such as Comcast and DirecTV pick up using their satellites so they can feed these feeds into their systems and offer them to their own customers.

Very very very very few channels aren't hosted on a satellite. As long as the channel is hosted on a satellite it cannot be withheld from any company and every company must be offered the channel at a fair market value which is most likely the same type of contract existing companies have.

So all InDemand channels are hosted on a satellite and as such cannot be withheld from any company and they must also price it fairly. The issue is this. InDemand is offering a very similiar contract to DirecTV, Dish Network and Verizon as they are offering to Comcast and such. But this is the real issue below.

The contracts states that each company must pay a set fee for a group of customers. So 200,000 customers or less would be charged on lump sum that DirecTV for example can devide between all their customers to get the per customer cost. InDemand has setup their pricing system to help cable and hurt all digital customer offerings. Because these cable companies still have many customers that are analog only these customers don't count. So Comcast might only have 15 million digital customers but they can spread this total fee over their entire 21 million customer base. Why do you think they don't offer an HD Package.

So DirecTV might pay the same exact amount as Comcast for their 15 million customers but because all of their 15 million customers are digital they must spread this amount between 15 million customers which means a much much higher per sub cost than Comcast. I hope you see the issue in this. Also to directly hurt Verizon they are also now pricing their sports packages on this model. Because Verizon is the only company involved in this mess with the sports packages they are the only company severely hurt by this practice. So Verizon is being charged based on their count of digital customers and the more they have the higher per sub cost they will eventually have. Again the cost isn't based on how many people order the package its based on how many people have access to the package. The more that have access to these packages the more money overall Verizon must pay for these packages. This means they must charge much much more to customers ordering each package to offset the added cost compared to Comcast for example.

Now to finish off with the RSNs. For the few RSNs that aren't hosted with a satellite such as a Comcast Sports Net this is the issue at hand. These few CSN sports channels are sent from the stadium via a fiber feed directly into the Comcast cable system and because they never touch a satallite they are exempt via this loophole from offering this feed to another company that must use a satellite to offer it to their customers. This keeps DirecTV, Dish Network and Voom from getting these channels and nothing that has happened to date will change this unless the loophole is closed. Now with Verizon they are a different story because they can accept a fiber feed directly from the stadium and offer it to local customers without touching a satellite so Verizon unlike DirecTV cannot be withheld from those channels. This has never been a problem because very very very few markets up until now have had a second hardwired providor serving their area. Also keep in mind that very few areas have RSN channels that aren't hosted on a satellite to start with.

I hope this gives you all a better understand of this entire situation and also to avoid confusion.
 
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MY SUGESTION was only in a perfect world senario, when i stated the sub base, i was refering to the cost on the directv side, either way it apears my logic was flawed and here you was ready to shoot it down.
 
Even if Directv could get the INHD channels it would be at least another year, year and a half before we would see them because they have no room for them now any ways.
 
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