Time Warner vs. ABC: The Fight Rages On

Last night while watching the news on KABC, Channel 7 in Los Angeles, the brief ad appeared. I learned that on September 2, KABC along with all ESPN channels, Disney, ABC Family may be pulled from Time Warner Cable because of a dispute over what Time Warner should pay ABC to carry those stations. I get TV programming here in the desert from Time Warner. So I could be impacted. And it gripes me. Here's why.

In the early days, cable existed mostly to bring broadcast stations from larger cities to viewers in rural areas who were so far away, they couldn't pick up the channels with an antenna. It was a low priced service (I paid $5 a month when I lived in Quincy to get about 12 stations from Sacramento, Chico, Redding, and San Francisco). It helped provide TV entertainment and news to remote regions, and it helped the broadcasters extend their reach. Obviously, the cable TV model has changed drastically since then.

Cable companies no longer view their primary roll as one of offering local stations to distant communities. Now, they produce and sell their own products, act as a conduit for their own programs, and provide hundreds of channels with niche programs. They also provide Internet and phone service. They primarily serve large metropolitan areas now, not remote communities. In essence, they are now competing with the local broadcast stations

The cable companies also carry those local broadcast stations, and for good reason. That's because the vast majority of cable subscribers still watch local broadcast stations (ABC, CBS, NBC, Fox) more than anything else on cable. The cable companies know that the broadcast stations carry a lot of value to their customers, and the broadcast stations know it as well. As such, several years back, broadcasters began demanding that cable companies pay them for the right to carry their programming. And that's where the problem is.

Cable companies argued that since the broadcast stations provided their signal for free, over the air, cable companies shouldn't have to pay for it. Broadcasters told the cable companies that's fine, then don't carry our stations and see how many of your customers still want to pay $60 a month for TV and not receive their local stations. Agreements were eventually reached, but as those contracts expire now, broadcasters want more money for their product, cable companies don't want to pay it.

The solution is fairly simple, but one that the cable companies have vigorously fought. That is, turn cable into an a la carte system where cable customers can pick and choose what stations they want. The satellite service that we have in Mexico works pretty much that way.

You could go online to the cable provider for your area. See a list of all the channels they offer along with the price per channel. You simply check off those you are willing to pay for. For example, if KABC wanted to charge the cable company 50 cents per month per subscriber, the cable company could in turn offer it to its customers for 75 cents (hey, they've got to make a profit). If you have an antenna and can get KABC or other local stations over the air for free, no need to pay the 75 cents to the cable company. If CNN charged the cable company 30 cents per subscriber, the cable company could offer it for 40 cents. If you never watch news, don't pay the 40 cents for CNN. If you don't watch sports, no need to pay for ESPN or the other channels. You can judge for yourself if the benefits outweigh the costs. It should be no different than when you go to a grocery store or department store. If you want to buy oranges, Safeway doesn't make you also buy apples you don't want them. If you want to buy shoes, Macy's doesn't force you to pay extra to buy a sweater as well. Why should I have to pay for the Cartoon Network when all I want is MSNBC?

The cable companies don't like this model for several reasons. For one, if you live in a metropolitan area and can receive local stations over the air, the cable company would lose money because you don't need to pay them for something you already receive. That's fair for consumers, right? But the other problem is ... remember I mentioned that cable companies produce some of their own content and own several of their own stations. Many of those stations are the ones that you probably rarely watch, and may not want to pay for them if you had the choice. By giving you the option not to have to pay for them, the cable companies risk losing potential viewers that they now count on for advertising on those channels. For example, Comcast Sports Net (CSN) is owned by Comcast cable. Right now, CSN is on most of Comcast's systems. Comcast also sells the channel to satellite systems and other cable systems. So let's say that in any given town, right now, CSN is available to one million subscribers. If half of those subscribers aren't sports fans and decide they don't want to pay for CSN, the potential number of viewers drops to a half million. And for advertisers, that means that CSN is no longer worth what it was before.

The cable industry is huge (as is the broadcast industry, in which I worked for more than three decades). They have very powerful lobbyists who have thwarted efforts to make the cable system more equitable for the customers. That's why the a la carte approach, which favors the consumers and not the corporate giants, has never been allowed to progress. The cable companies have lost some battles (such as when DirectTV and DishNetwork were allowed to compete in markets where cable had exclusive distribution rights). And that may be the solution. Already, KABC is running ads telling its viewers that now may be the time to switch to satellite or buy and antenna before KABC is removed from Time Warner. Time Warner is running an Internet campaign blasting those greedy broadcasters. The way it is now, it is a no win situation for consumers. But, if Time Warner and ABC fail to reach agreement and the ABC stations are pulled from Time Warner, even for a day, it will likely turn into a no win for the cable company, which would find customers like me defecting to satellite faster than you can say "Don't touch that dial."

Russia, The Ice bar, and beyond

Jet lag is a funny thing … almost like an out of body experience. You stay up 27 hours straight, 14 of those hours in the air, and in the end you are dumped off in a time zone half way around the world (literally, when it is 7PM in St. Petersburg, Russia, it is 7AM in Los Angeles). Now, five days later, while pretty much adjusted back to the reality of the West Coast, I can muster enough stamina to crank out one last installment in the travels abroad.

Since last hearing from your fearless adventurers, we have soaked up more culture than a simple California boy can endure. St. Petersburg was all you have heard it is, plus more, and it is simply impossible to capture the grandeur and opulence in pictures, difficult to do it justice in words. For two days, in a private car (2002 Mercedes) with a driver and our Russian guide Maria, we saw more churches, more palaces, more fountains and more gold than most well intentioned tourists could handle. It really was a bit overwhelming. By the end of the second day, after seeing The Hermitage (world’s second largest art museum behind the Louvre), Peterhoff, The Catherine Palace, Church at the Spilled Blood, we were spent. Each day, at 5PM, we were glad to be back on the ship, and let it all soak in. What an amazing experience.

It was the peak of the travel season (seven ships alone were in the port at St. Petersburg, not counting the rest of the folks who arrived by other means). Plus, there was a heat wave, with temperatures in the upper 80s (hot for a place that is on the same latitude as Alaska). The result was masses of people all vying for the same spot at the same sites. And it is very controlled. If you don’t have a Russian visa, you couldn’t even get off the ship. Maria took care of all of that for us. But that’s not all. It seems that Maria has an “in” with most of the ticket takers. So, she would take us to the front of the line, ahead of the thousands of people on the organized tours waiting hours to get in, and we rarely had to wait more than 2-3 minutes. Oh yes, we got dirty looks from the rest, but as Maria told us, it’s one of the benefits of hiring a private local guide as compared to going through a group tour. Basically, “Don’t ask questions, just follow me, and don’t get separated from me.” I’ll post a few pictures so you can get a feel of what we saw.

St. Pete was followed by Helsinki, where we found one of the best open air farmers markets in Europe. It was right at the waterfront in the middle of town, and in addition to fresh vegetables, fruits, and flowers, the fishermen would dock their boats alongside and have a bounty of fresh fish for sale. We also bought some cool clothes there (like we did at other ports), the kind of things you don’t find in the U.S. or Mexico.

The final stop was in Stockholm where the highlight was visiting the Absolut Ice Bar. We had seen it before on TV, so once we docked, we set out on foot. A mile or so away, tucked in the corner of a small hotel, there it was. You could tell by all the tour buses parked in front.

We didn’t have reservations, and the hostess said she couldn’t get us in for several hours, it was so busy. But she looked at us, saw the disappointment on our faces when we gave her a sob story about how we are from Mexico and we really like Absolut. With a smile she said “hold on.” She snuck us in at the tail end of a group of Colombian Tourists (I told her I could speak Spanish so we could fit in without a problem). And with heavy down smocks on, we entered through a dark tunnel to the ice cave ... er, I mean ice bar. Everything is ice … the walls, the glasses, the bar, the furniture and it is a very popular place. $20 admission includes a watered down cocktail not strong enough for even the slightest hint of a buzz. But hey, we’ve now been to an ice bar.

The finale of the cruise was truly unexpected and spectacular. Leaving Stockholm, you have to sail for nearly three hours through the narrow waterways and past the islands that make up a good part of Sweden. The alpine studded coastline, dotted with beautiful home that ranged from simple A-frames to expansive mansions reminded me of a cruise along the shoreline of Lake Tahoe … but if possible, even more beautiful. Sitting on the balcony, cocktail in hand, watching the sunset and the coastline pass by, it was the perfect end to a memorable 18 days.

Estonia

Sailing over seas smooth as glass, following a truly memorable day in a town I knew nothing about, a good workout in the gym (after 4 miles of walking through town), and now back in the room with a martini in hand before heading off to dinner. It is quite the day.

I don’t know when this will get posted … perhaps not for several days when we get to Helsinki. But here goes my life in a capsule since Kiel, Germany. That includes today’s stop of Tallinn, Estonia. My friend and former colleague Will Frampton sent me an email last week after learning I would be in Tallinn, which split away from the Soviet Union nearly 20 years ago. He said it was an amazing town … one of the favorites he has visited. I’ve got to agree with Will. It has now entered my top 10 towns of all time.

Tallinn dates back to 100 AD and at various times was part of Viking, Danish, and mostly Russian rule. Tallin was spared the destruction that so many similar towns suffered in WWII and because of that, the inner core of the “Old Town” which includes neighborhoods built in the 13^th century is still intact. It’s not preserved specifically as a tourist destination because old Tallinn is still a functioning town with homes, apartments, stores, churches, and restaurants. But with the history and well-preserved architecture, it is a popular tourist spot especially for those of us who think old is The Golden Gate Bridge. I especially liked the museum of 17^th Century Instruments of Torture.

The town was packed. It was a Saturday. The weather was the best of the year (sunny and in the 80s). And there were two big cruise ships in town. But there was plenty to see. As ancient as Tallinn is, it is also surprisingly a technological hub. It is here where Skype was developed. And it is one of those places that offers free Internet throughout the city to anyone with a laptop. But it comes with a warning. When you sign on, you receive a notice in all sorts of languages that if you don’t have good up to date security on your computer, you’ll likely fall victim to hackers and cyber thieves (they didn’t say anything about pick pockets …. though we’ve been warned that’s the specialty in St. Petersburg). With free Internet, I have never seen so many people just hanging out with laptops (they outnumber cell phones here). The problem however, is that with so many people in town today, the system became overloaded, and if you could get on, it was slower than dial-up. What do you expect for free?

That’s it for now. I’ll add more here after St. Petersburg

Rush Limbaugh vs. Howard Stern at Sea

Hello from Kiel, Germany … the first spot we’ve had a chance to get a good enough Wi-Fi signal to update our travels. It’s also the first place where it actually felt like summer, with sunny skies and temps pushing 80.

Since the fjords in Norway, we’ve hit Invergordon, Scotland. Then on Sunday, Edinburgh. There wasn’t a lot in Invergordon, though the town is known for its many murals. And there was a grocery store where we could buy laundry detergent to clean clothes in our sink. On this ship (The Eurodam), Holland America has done away with guest laundry rooms, which on an 18 day cruise like this are kind of nice to have. Here, they will do your laundry for you … at their prices. “Only” $2.00 for one pair of sox. “Only” $2.00 for one pair of underwear. “Only” $2.50 for a t-shirt. They will do one entire bag of laundry for “only” $20.00. The bag is the size of a small plastic grocery bag that you find in the produce department. After spending as much as you do just to go on the cruise, it’s rather insulting that they gouge you for something as basic as laundry. But, it’s their ship (in their defense, they did give us a free bottle of wine and a note of apology because the service in the main dining room has been so bad, but that’s another story).

On to Edinburgh, where a tender ride from the ship was followed by a bus ride and 40 minutes later we were in the heart of the historic city. The Edinburgh Castle, The Royal Jewels, The Royal Mile, The Royal Fountain, the Royal Gardens … we walked our royal asses off (we figured we trekked about 6 miles) and had a royal good time. When you were raised in a state that wasn’t even founded until 1849, it’s amazing to see buildings that were built and history that was unfolding centuries before Columbus was even born. And they are still in good shape … and they are still clean … and they still are not covered by graffiti (though Kurt though they could invest in a royal power washer to spruce up the old buildings a bit). Someone said it reminded them of Victoria, BC, but a lot older. One thing missing … no bag pipe players, except some homeless dude which was cool.

Tuesday, we returned to Dover, where 2000 passengers left the ship, 2000 new passengers got on, and only 300 of us stayed on from the previous leg. After some clothes shopping, we hiked to the top of the mountain (more like a big hill) above the chalky white cliffs that look out over the channel. Here, we toured the fortress that has guarded England from invaders from the 1600s through WWII. The most fascinating past was the underground tour where the military built miles of tunnels. Here, many of the battles of WWII planned, an underground hospital was established, and living quarters were built for military leaders. Tuesday, we walked closed to 10 miles.


OK, as for life on board, it’s always somewhat interesting. Sea days are kind of cool. We just had one on Wednesday. You pretty much do whatever you want. For me, that means just hanging (for Kurt, it means watching a lot of Wimbledon on TV). Since gorging at the dining hall isn’t my thing on these things, a light breakfast was followed by a visit to the computer lab, where various courses are taught (it’s sponsored by Microsoft, so you need to accept the Bill Gates party line, but nonetheless, it’s interesting to see what’s out there).

That class was on Internet security. It was a frustrating day for the instructor. A persistent, loud mouth woman kept interrupting the teacher, prefacing each outburst with “I’m sorry to interrupt again, but …” Now, if her questions would have been class appropriate, it might have been somewhat acceptable. However, she asked repeated questions about computer programs she has heard advertised on the Rush Limbaugh radio show and whether they were reliable. “Rush recommends this,” she would say. A moment later, “Rush recommends that.” Come on lady! It’s 2010! Is Limbaugh still on the air???? I felt like asking the instructor what she thought about the wife-swapping and dating websites I hear advertised on the Howard Stern Show, but I didn’t want anyone ending up in the ship infirmary from a Howard Stern induced heart attack. As the class broke up, I told the Limbaugh lunatic I have used Mozy.com for online back-ups. She said “Thank you, young man, but Rush never talks about that one.” Neither does Howard, but I didn’t go there.

Next, Estonia, then Russia on the Fourth of July.