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Wednesday, February 09, 2005

Pickoff Moves

OT: Carly Fiorina Resigns

What Carly Fiorina hath wrought

Carly Fiorina, the former AT&T executive who wrecked HP, has blessedly, finally stepped down. Making mistake after crucial mistake (ramming the failed Compaq merger through, continuing to sell PCs through the channel when Dell made it obvious that direct sales were the way to go, taking the wrecking ball to "the H-P way"), and cursed with a monomania and narrow vision, Fiorina resigned, but about four years too late. HP was one of the great companies the U.S. has produced, and she ground it to dust.

``She hasn't executed in terms of actually managing a big diversified business that faces competitive challenges,'' [analyst Jason] Maxwell said. ``She's great at sales, but executives of that stripe have a hard time managing when the growth opportunities are not right in front of them.''
You can say that again. Saying "good riddance" now is like noting the deceased no longer has to worry about the pain of cancer.

Update: Here's a brilliant joke from Slashdot about Fiorina's ascension (?). The parent story thread is a must-read, too.

2007 All-Star Game In SF

SBC Park will host the 2007 All-Star Game. Hey, whatever, so long as Dodger Stadium is hosting the 2006 World Series.

OT: Washington Wants Your Analog TV

Washington -- by this, I mean both Bush and Congress -- like spectrum auctions, and especially, they like the money they bring in. But of course, that never happened for regular radio and broadcast TV, so the Bush administration, not wanting the broadcasters to feel left out from the shakedown their wireless telephony brethren had to undergo, wants to force terrestrial broadcasters to pay $500M annually for the analog TV spectrum, starting in 2007, thus beating the broadcasters into HDTV submission.

It wasn't supposed to be this way. HDTV was to take the market by storm, new tech would overwhelm the old, and nobody would care about analog broadcast TV by about 2004. Congress could then rake in the dough by holding an auction for the bandwidth previously used by broadcast TV. (Never mind that this is a terrible way to manage spectrum; the flourishing of WiFi and cordless telephones should tell you all you need to need to know about what happens when spectrum is allocated but not sold.) So, essentially, Congress is pointing a gun to the heads of millions of Americans who, through no fault of their own, have run afoul of their need to spend ever more.

Normally, easily-bought hacks like Louisiana's Billy Tauzin could be counted on to step on such a plan, but now Texas Rep. Joe Barton is running the House Commerce Committee, and is "less friendly to the industry". Now, via Professor Dave Farber's Interesting-People list, activist Lauren Weinstein notes that Congress is about to run hard into the shoals of reality, calling this madness an unseen "third rail". That it is; while I love my Sony HDTV set, there's no way I -- or Congress, or anybody else, really -- should be forcing them down people's throats, especially considering how expensive they are. Congress's itch for riches then becomes a violation of the "takings" clause by obsoleting perfectly good TV sets.

BP: Who's Your 1B?

According to this Baseball Prospectus roundtable, Casey Kotchman. Or, at least, that's what some of them think, anyway, with Nate Silver projecting him to a fifth-year WARP of 4.8. That's amazing, but when your upside comps include Vlad Guerrero, Eric Chavez, and Dave Winfield, and your lower ceiling is Mark Grace, that's a move you could make with an empty cranium. On the other side of the fence: with regards to James Loney:

Comments:
HDTV - Have you seen the HD televisions flying off the shelves lately? By 2006 30% of all cable/satellite subscribers will own an HDTV.
Here are some interesting facts: by the end of 2006, it is expected that 85% of TV households subscriber to cable/satellite/other, meaning you don't need to pick up an analog signal over the air.
The broadcasters dragged their feet on investing in digital broadcast equipment. Now they want to extend the deadline when they have to give back their analog spectrum. Remember, they agreed to this 10+ years ago. Now they want to extend the deadline. They learned this trick from the auto industry and their fuel economy standards. So Congress wants to bill them for use of the analog spectrum after the deadline? That will get them off their a$$.

Oh and your analog tv will still work with any cable/satellite service for years to come, and if you don't subscribe to a service, a inexpensive set top box will convert a digital signal to an analog one.
 
The argument that the broadcasters "dragged their feet" on adoption strikes me as disingenuous; the cheapest tube (opposite plasma or LCD) HD units remain pretty expensive compared to analog. Only now is the price actually coming down from the stratosphere, and while people continue to buy HD units, 30% penetration of a an 85% market share is still only 25% overall! This analysis badly misreads where the market will be even next year. Obsoleting 75% of the market strikes me as abject stupidity.
 
32 inch flat screen HDTV for $425. A couple years ago that was the price of a non-HDTV set. That's pretty cheap. And a non-HD is $310.

As for 75% of the population being obsolete, as I said, 85% of the TV Households receive TV via satellite, cable, or something similar, which retransmits in either analog or they require a set top box (satellite) that outputs in analog. So 85% of the population do not need anything to keep watching TV on their analog tv's no matter what the broadcasters do. Of the other 15%, Some percentage will have digital TV's capable to receive the digital broadcasts.

The NAB agreed 10 years ago that they would transition to broadcast using the digital spectrum (without having to pay for the digital spectrum) and give up the analog spectrum. Now they want to backtrack on that. Meanwhile, instead of broadcasting High Def signals, they want to broadcast multiple channels on their new, free spectrum, opposite of what they said they would do.

Not everything the FCC does is evil and wrong.
 
One more thing regarding spectrum auctions. Spectrum is limited. Let's take the satellite TV business. By the time they sold the first CONUS spectrum, able to see the contiguous united states, DIRECTV and Dish Network had already launched service and considered successful. There was one CONUS slot left. Who gets it? In the good old days, it goes to the biggest donor to the party in power. That's not the best way to be dividing up what is the nation's resource. Lottery? Maybe, but who gets to participate? So you hold an auction, and the guy with the best business plan gets the funding required to launch a successful business, hire US workers, and pay taxes. And with the auction proceeds, we pay down federal debt or spend it on other things that are theoretically in the country's best interest.

We currently have an auction spectrum going on in radio for the past 10 years or so. Only it was held in private. Clear Channel, Viacom, and Infinity have been buying spectrum one station at a time. That's what the free market does. If you just give away the spectrum, it will eventually get in the hands of the guy with the best business plan (whether you like that business plan or not is a separate issue). So giving away spectrum is merely a large government handout to whoever is getting the spectrum.
 
1) >>So 85% of the population do not need anything to keep watching TV on their analog tv's no matter what the broadcasters do.<<

Please not to be changing the subject: we are talking about terrestrial broadcast spectrum allocation here and what format it's supposed to be using.

2) If, through spectrum allocation auctions, broadcasters have paid for the privilege of using a swath of spectrum, doesn't that also imply ownership? And if so, doesn't that mean the FCC no longer has any authority or responsibility for policing the content thereof? I'd be much more in favor of spectrum auctions if the above were true, but as it is, it's not. Furthermore, auctions tend to get in the way of genuine innovation, such as UWB.
 
I think we are talking about the transition from analog spectrum to digital, and the potential obsolesence "Washington wants your analog TV". My point is that for 85% of the population, the transition will not make their TVs obsolete.

As for the FCC regulating content after they "sell" spectrum (lease might be a better term), most americans want some regulation of content. There is a very vocal minority (including those with microphones) that is against it, but most people don't want blatant nudity/obscenity on TV/radio. They want to be able to have the TV on some channels and not worry if their kids are watching.

I don't know much about UWB, but I do know that many companies are looking for ways to transmit HDTV signals and other signals wirelessly, and whether or not spectrum is auctioned or handed out to political donors should not affect its development. A silver bullet solution is going to make it to the public.
 
>>for 85% of the population, the transition will not make their TVs obsolete<<

If they buy a pay service, if one serves their area. Whatever happened to the public interest? Or are sales for the satellite and cable industries of greater import?

Terrestrial broadcast, satellite, and cable are not the same thing, and the presence or absence of one should not be to deny the necessity of the other.

One of the things that has bothered me immensely since ownership restrictions were lifted on broadcast stations is the idea that the Internet is somehow a proxy for actual competition of viewpoints. Indeed, many of the arguments in favor of "deregulation" -- for it was, as usual, a one-sided deregulation that only benefited incumbent broadcasters -- rested heavily on the presence of the Internet as a competitive force. Of course, this is completely laughable; the broadcasters were among those who pushed hard for exorbitant licensing fees for streaming audio, far above anything the radios actually paid. What they want, what they have always wanted, is an exemption from actual competition.

>>most americans want some regulation of content. There is a very vocal minority (including those with microphones) that is against it, but most people don't want blatant nudity/obscenity on TV/radio.<<

But bandwidth scarcity has always been the camel's nose in this argument. The First Amendment has pretty much trumped it for all other media, and it looks like those intent on keeping obscenity out of cable are going to have a harder row of it. Adelphia, once one of the most conservative operators in the cable business, will soon be bringing on XXX-rated material. (Aside: I had no idea that there really was such a thing as XXX-rated; I always thought that was just the exaggeration of some marquee-writer!) What some fat old ladies in a hotel lobby declare to be the American public's "wants" and what the real thing is actually willing to pay for are entirely different. So why should the public airwaves, auctioned off to the highest bidder, be any different from a cable network? I don't think the government has thought about that adequately, and the answers are about to startle some people.
 
Rob, don't pull a Carly on us. :-)

One thing she clearly lacked was any longterm sense of what was going to happen in the industry.

Broadcasting as we know it is on its deathbed. Just as my alter-anon ego has posted, a huge market share is by subscriber... couple that with TIVO and new "on-demand" technology "in-roads" and you get the NEW (I just like throwing new out there like it means something {ie New Economy!}... you get the NEW blog-like media model, what you want, when you want it, controling everything that goes into your living room (especially while your kids are there). I want my kid to be able to watch a Dodgers game with me, Vin Scully behind the mike.

To me the commercials in both their content and tone have just begun to become too much. In other words, if I didn't have Tivo, I wouldn't watch TV. And in mine and several households that is just a reality. In fact, I can now take what I want to watch with me.

I think broadcasting needs to think about what happens when less than 10% of their advertising ever reaches a consumers eyes.

Good stuff. long time reader, first time poster.
 
Rob, don't pull a Carly on us. :-)

One thing she clearly lacked was any longterm sense of what was going to happen in the industry.

Broadcasting as we know it is on its deathbed. Just as my alter-anon ego has posted, a huge market share is by subscriber... couple that with TIVO and new "on-demand" technology "in-roads" and you get the NEW (I just like throwing new out there like it means something {ie New Economy!}... you get the NEW blog-like media model, what you want, when you want it, controling everything that goes into your living room (especially while your kids are there). I want my kid to be able to watch a Dodgers game with me, Vin Scully behind the mike.

To me the commercials in both their content and tone have just begun to become too much. In other words, if I didn't have Tivo, I wouldn't watch TV. And in mine and several households that is just a reality. In fact, I can now take what I want to watch with me.

I think broadcasting needs to think about what happens when less than 10% of their advertising ever reaches a consumers eyes.

Good stuff. long time reader, first time poster.
 
Currently 84% are already subscribing to cable/satellite. So its not as if they are being forced to buy it. And there is some competition, as most consumers have three choices for subscription television, even if all they want is basic cable and local channels delivered via cable. Ironically, cable TV rose up not just because of HBO and the like, but because of poor over the air reception quality.
All consumers in the US have at least two providers servicing them, Directv and Dish Network. 95% of the country has a cable provider also, 10% of the country has two cable providers in addition to satellite. And some markets have other wireless options (MMDS).
The transition to digital broadcast will still allow a terrestrial broadcast, but in a different format, that can be relatively easily translated for older analog TVs.

Here's an analogy. At some point the US stopped selling gasoline with lead in it. Even though some cars engines were designed to run on leaded gas. Sometimes you have to move on.

There are some compelling arguments in favor of deregulation of ownership restrictions, the best one being that you really weren't getting competing viewpoints anyhow. Nobody was watching the channel 9 news, and they weren't saying anything different than the channel 5 or 7 news anyhow.

As for obscenity/nudity censorship, I think most people who are for some kind of censorship just want to know that some channels will be "safe". They can lock out MTV and HBO if they want, but they expect ABC to be relatively clean, and want somebody keeping an eye on them.

Interestingly, the Rigas family which ran Adelphia as their own kingdom were the ones whose personal morals kept Adelphia from airing porn channels all these years.

As a parent, I want to be able to walk away from the TV and not have to go running back to it to turn it off as something offensive comes on that I don't want my 5 year old to see. I also want access to more adult fare, but I can lock those channels out from my kids viewing. I think most parents feel similarly.
 

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