Hornets Broadcasting Issues Reply

Published: November 2, 2010

I will answer your direct questions in your reply to my comment first.

No not only do I not think CST overcharges for their channel, I know they don’t.  If they did, they would not be carried by dozens of other video service providers in the area.  In fact, the only TWO that they are not carried on in this state is Direct TV and Charter.  See the link below for a full list of their full affiliates list for a greater understanding of the scope of people willing to sign a contract with their company.


So if they have companies large, small, and some downright tiny willing to sign a contract they can’t be asking a ridiculously out of market value for the channel.  This is a case of the two video services providers having their own issues with adding the channel.  Most likely, it has to do with channel capacity, channel placement, and corporate structures not caring about the New Orleans market. (as in Charter Corporate not Charter Louisiana and DirectTV Corporate)  Adding a channel to your lineup is not as easy as walking in a room and plugging a wire into a port labeled “channel 29”.  I would suspect, read this as I know more than most, is that it is really about not desiring to add a channel for a region only.  Charter and Cox Communications work with each other in partnerships all the time, they are not at each other’s throats in a way that one would say I am not adding that channel because the other owns the company. 

I know that Direct TV doesn’t want to add it because of the large amount of capital outlay to get the feed back to their closest satellite aggregation and uplink area.  Direct TV and Dish Network are both owned by News Corp. of Fox fame.  They bought Direct TV first about a decade ago, then bought Dish Network when they were about to go bankrupt about 5 years ago.  As they have already done the outlay for one of their divisions they might not be so inclined to do it for the other.  They are getting your money one way or the other, so why try as hard.  Thinking Direct TV and Dish Network “compete” against each other fully is like thinking Sirrius and XM “compete”.

So MAYBE, just maybe, when you consider the entire scope of the situation, maybe Charter and DirectTV is just using the bugga-boo of video services costing the customer more per month to keep people off of their backs for their own desire not to add a channel for other reasons.

As far as the point about the council member talking about pulling the franchise in St. Tammany goes, that doesn’t surprise me.  A Louisiana politician talking out of his butt, making claims they would never follow through on just to get their names in the papers… That would NEVER happen in this state. 

This gets me to how you were off base.  You can’t say they might pull their franchises and let them duke it out for customers.  This is inherently ignorant as to how the franchise agreement works, and the results of pulling the franchise.

First, they are non-excusive rights granted to an entity to provide communications services in the franchises jurisdictional area.  Notice that “non-exclusive” part?  That means that the franchise holder does not hold any right to be the sole franchise holder or provider in a given area.  So yes, you too can go and apply for a franchise and then figure out how to raise the tens of millions of dollars to provide services also.  This gets me to your use of the term monopoly.  Cable companies are not monopolies.  Period.  For more, please read the definition linked, as it is pretty simple concept.  As Direct TV, Dish Network, Bell, Eatel, Verizon Wireless, etc. all offer video, voice, and data, in the service areas that every cable company cover, there is zero possibility of them controlling a commodity or service.  For every service they offer, there is at least two competitors in their area.  Yes before satellite services there was an argument, we are talking 20 years ago now, but even then you could have received the satellite services like ESPN and the such on your own so that is why that wasn’t a monopoly then either.  Most people can’t think past the idea that the cable companies have sole use of their own wire, well guess what, if you buy something and the government doesn’t pitch in, they have zero say in how you use the thing you bought.  So please, will everyone stop using the ignorant and outdated use of the word monopoly when it comes to cable companies, it is a huge pet peeve of mine.  So as the franchises are non-exclusive pulling them will not do anything about the competitive nature of offering voice, video, and data in a given area.

Second, there are only two results of pulling or not renewing a franchise agreement.  Either the company that loses the agreement must sell the plant to another provider with a franchise before a determined zero date, or they have to pull down every wire in the affected area and shut down.  Do you see how trying to force a company like Charter to do either would end up in most likely bankrupting the parish in question with legal bills?  The Parish would not do either unless they knew that there was evidence that proved they were not fulfilling their agreement.  Not adding CST or any of the complaints about fuzzy service in a few spot areas is going to warrant that kind of a legal maneuver.  I wonder what the rest of the council, and most likely the council memeber who made the statement, think about that threat.  I bet you that isn’t even the 45th thing on their list of real tactics.  Yes, if Charter wasn’t providing their potential customers with access to competitive services, granting access to their airwaves to the public service commission, or some other egregious act against the public interest, or not wanting to charge their subscribers 5% franchise fee (read that as a tax you never voted for), then they might choose to pull a franchise.  But otherwise, the real power of the Parish comes when Charter’s franchise is up for renewal.  Then they can put in the new agreement that they must carry the channel.  Charter will fight it, but eventually they would probably not care as you pointed out the Northshore is their most profitable of their Louisiana markets.

Now to the rest of your blog post.

Problem 1:  Northshore

 I pretty much covered that above.


As my comment stated, I think the resolution lies with the Hornets.  They need to make CST understand how large an issue this is and understand they will have no option other than switch partners at the end of the current agreement if it is not resolved soon.  Yes Cox Communications is the larges contributor to the Hornets, but it is pure economics.  The Hornets MUST be on in the Northshore, and if CST can’t provide that then they deserve to lose the business.  Citizen’s pushing the council to pressure Charter corporate is a good idea,  but even the council has little power until a franchise renewal.

Problem 2: Not broadcasting all the games

 I agree.  But again, blame is on the Hornets.  As they approach the re-negotiation of the broadcasting agreement, they have leverage to pressure moves they want like more complete coverage.  Maybe, those 15 games they don’t cover isn’t as high a priority as some other concession to the Hornets organization.  But in the end, the Hornets are the problem as long as CST is fulfilling their agreement.

Problem 3:  inability to pick and choose your channels

If you thought this journal is already long, double it and that would be adding the explanation as to this situation.  Thing to remember is that ALL the blame lies on the channel providers like ESPN, FOX, Disney, etc.  If there is a huge request for a deeper explanation I will post it in the comments.  But as this is not a cable television blog, I will leave it at my previous sentence.

Problem 4:  Direct TV no CST and Cox no NFL Sunday Ticket.

Call Direct TV about CST.  I explained the main reason above.  New Orleans is not large enough to push them to care about your complaints.  Period.  We should be used to being this country’s red headed step child by now.  Give us your oil and natural gas and kindly shut up.  Thanks Louisiana, we will call you when we want to party.

NFL Season Ticket is an exclusive channel offering between the NFL and Direct TV.  Call the NFL and ask them why they won’t let any other video providers offer the service.  Any cable company, phone company, and even Dish Network would offer it if they allowed it, but they don’t.  Oh while your at it, call your congressman and ask them why Direct TV is allowed to have sole control of a commodity and service as impactful to the entertainment world like the NFL.  Wouldn’t it be nice if there was some competition as to who you could pick to provide you with your NFL Sunday Ticket.  There is your anti-trust fight.

Problem 5:  HD

Yep, it would be nice to have it on all games.  It cost money to broadcast in HD.  From renting the special truck to process the video, to the large difference in cost to uplink the larger bandwidth feed, to other operating cost involved with HD vs. standard definition.  Again, this is all on the Hornets organization to make CST understand how and what is important to them moving forward.  I think the Hornets organization has taken a “lets not rock the Cox boat too much” attitude up to this point.  I think that is changing.  Notice the next time you are in the arena.  There are sponsorships galore.  For those that go to the games, you will recognize a lack of Cox communications ads running on the ring screens etc.  The past two seasons, it was them or Oschners on those screens.  Now it is around a dozen oil field companies.  HMMMMM, I wonder why.  (see Chouest)  I think this is a symptom of the fact that the new direction is from the top down.  No longer is it good enough that the Hornets have money from a few big sponsors.  As they don’t seem to be happy with “good enough” in the players, I think they will not be happy with “good enough” in their exposure to the public.  All of these signs are good things.


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