San Francisco’s Municipal Transportation Agency absorbs the Taxi Commission in March, but SFMTA Chief Nathaniel Ford says progress will be slow.

KALW’s Manager’s Report took place in the late morning, preempting an episode of a local call-in forum show.

Similar to Indiana University‘s arrangement with public radio station WFIU, the San Francisco Unified School District provides KALW with discounted real estate and other ancillary business support services such as telco, Internet access, payroll processing, basic utilities, etc. But, they must find revenue sources to pay for staff, production costs, and purchase programming from NPR and other sources.

I enjoy 91.7 KALW’s positioning as an ‘alternative’ public radio station — an antithesis to the standard NPR fare of 88.5 KQED.

Of course, as a public radio junky, I also enjoy KQED’s great standard NPR program offerings, but KALW provides a nice alternative view with a heavier focus on world news, especially BBC programs like World Have Your Say and the BBC World Service through the wee hours of the night. KALW is also my source on Sunday morning for unique radio programs like Working with Marty Nemko and Harry Shearer’s Le Show.

Keep up the good work, KALW!

MP3 direct link to KALW Manager’s Report

I point your temporary attention to a Flash website produced by UC Berkeley j-school grad students Eric Zassenhaus and Amy Jeffries.

The video clips thumbnailed along the bottom are accurate and colorful paintings of a typical taxi shift. Well worth a view.

But wait, there’s more. The site also features insightful interviews with Heidi Machen, the SF Taxi Commission Executive Director; Jim Gillespie, Yellow Cab President; and Thomas George-Williams, United Taxicab Workers member.

Since I drive a cab in the City and can’t shut up about local politics, I have some pointed reactions:

I don’t know who Heidi Machen is or how she got to be Executive Director of the SF Taxi Commission, but she doesn’t seem to have an accurate grasp of the industry over which she regulates. This is a bit scary.

When asked about the recent gate-fee increase, Ms. Machen responds with a bubbly response. “In many ways it’s very positive,” she starts, repeating again for emphasis, “in many ways it’s very positive, because, if indeed the taxi companies needed money to purchase the alternative fuel and hybrid vehicles San Francisco is looking at a clean taxi fleet in 3-4 years. Wow! That’s phenomenal!”

“If indeed?” If indeed? Ms. Machen, your job, for which you are paid a bulbous salary of some sort, is to be Executive Director of the Taxi Commission. There should be no “if” in your response. You should know whether or not taxi companies need money to purchase alternative fuel and hybrid vehicles BEFORE implementing fee increases.

Continuing, “On the other hand you look at the controller’s report and the controller said this would have an immediate detrimental effect on taxi drivers’ incomes. So, that can be a negative, obviously, because taxi drivers, a lot of them, may be hanging on marginally. On the other hand, maybe it encourages taxi drivers to become more efficient. Some would fear it would make taxi drivers more reckless.” Ponderously she summarizes, “I think there are some positives and some possible negatives that we’re looking at.”

My fear is she doesn’t seem to “get it.” A key sticking point: taxi companies need CPI gate increases but drivers also need correlated revenue increases. The discussion of green cabs is a sideshow distracting from this core issue.

On the other hand, Mr. Gillespie in his role as General Manager of Yellow Cab understands the situation perfectly. Unfortunately, his role is not an advocate for drivers but instead for revenue maximization for Yellow Cab. (This is not a judgment of his motivation, just a recognition thereof.) But, at least he “gets it.”

Thomas George-Williams, an active member of the local United Taxi Worker union “gets it” too. But, as most drivers are not members of the Union, its influence, regardless of Mr. George-Williams “getting it,” is unfortunately questionable.

Link

The Chronicle has a touching and well-written article about the aftermath of the Mission District fire that completely destroyed a 30-unit apartment building Monday evening.

Central to the article is the story of Griselda Paleo. Ms. Paleo is 59 and lived alone in a studio apartment in the building. Her apartment was tied to an 18-year old rent controlled price of $698. Her income is $850 from a federal disability program. How can Ms. Paleo relocate in the City? Short answer: she can’t.

Studios in the City start at $1,000 per month, it’s hard to find a decent quality one at $1,200. Even sharing an apartment will likely use her entire income stream.

Since rent control regulations tie the stabilized apartment price to that particular apartment, if that apartment is destroyed, transferred to a live-in owner, etc, the tenant loses that price control. That is what happened with Ms. Paleo.

Ms. Paleo’s case shows that tying price controls to a particular property is a critical failure of rent control policies as implemented in San Francisco and some other big cities, notably New York City.

Rent control is a form of welfare paid to tenants regardless of income and paid solely by rental property owners. Welfare for low-income residents to live in our City is good. But, offering housing welfare to all residents regardless of income, supported only by property owners is silly.

Instead, the City should offer a rent SUBSIDY program, financed by all City residents that stabilizes rental unit prices for low-income tenants. Among other benefits, this would not tie a tenant to a particular property as in Ms. Paleo’s case.

A rent subsidy program in place of rent control offers a number of benefits:

• Ms. Paleo would be free to move to any apartment in the City, whether displaced by natural disaster as in this case, or by her own choosing if she wants to move to a new neighborhood.
• Tenants who do not need assistance will not be eligible. Ms. Paleo obviously needs rental assistance, but an investment banker with an income of >$100K should not be eligible for rent assistance. With the current system there is no way to differentiate the investment banker from Ms. Paleo. This is silly.
• The cost of the program would be borne by all City residents, not just rental property owners. This is important. Since rent control is a significant tax on property owners that choose to rent their property, this significantly limits the number of properties put on the rental market. By removing the rent control tax and instead spreading the cost of rent subsidies to the entire population, we allow the rental property market to operate much more smoothly.

Our Supervisors and Mayor wouldn’t touch the idea of changing the rent control structure with a ten foot pole.

City leaders, your inaction has forced Ms. Paleo to leave our City.

Links

• Original Chronicle article about fire with pictures
• Aftermath article

PS. Rent control is better than nothing. It’s a good start, but it’s just not the most effective solution we can come up with.

Hugo Gonzalez and Griselda Paleo walk through the patio at a Red Cross shelter set up at the recreation center on Harrison Street. Chronicle photo by Kurt Rogers.

Marketplace painted a nice picture of Obama and Hillary’s voracious battle for the crown of ultimate NAFTA hater.

This is frustrating. Yes, they’re in Ohio. Yes, they have to cater to the lowest common denominator.

Instead, they should rise up above the normal crap and say, “Look America, NAFTA is here. I (didn’t support it/didn’t agree with my husband), but it’s not going anywhere soon. But, I *DO* support free, government supported retraining programs to help displaced persons find jobs. This is a *REAL* way that, if elected, my administration would work toward a solution for Ohio and American citizens that were hardest hit by NAFTA.”

Please remember: NAFTA is not bad. Free trade is not bad. But, free trade often displaces labor that is most easily displaced — which is most often low/unskilled labor.

Our government must recognize that the effects of free trade often hits hardest our lowest income members of society. As such, our government has a strong social duty to provide free retraining and placement programs for those displaced by trade.

Link

Okay, we all know the big news: Microsoft wants Yahoo.

In fact, it has been the only topic visible ‘above the fold’ of The New York Times’ tech page for the past few days. Michael Krasny whipped out a KQED Forum about it first thing this morning. It’s the talk of the town.

But, two things seem to get lost in the jumble. I want to make sure they’re clear.

First, this deal is about display advertising just as much OR MORE than it is about search ads.

Yahoo! and MSFT are beat in the search department. They want to make inroads against Google. They’ll make some with this acquisition. But, it’s frankly too late to kick Google’s ass in search. It’s just not going to happen anytime soon.

But, there’s an egg that’s just as fat on the horizon. It’s what the ad industry calls display advertising. You know ‘display ads’ as annoying banner ads.

Big companies that spend big money on big numbers of ads, like beer, auto and CPG companies, have up to now spent their big wads of dough on TV. They’ve also spent a tad here and there on radio print and outdoor, and a bit on an experiment known as the Internets. The thing is, these here Internets are here to stay and these big companies with big money are finally getting around to realizing this.

Display advertising is going to grow big. Real big. As stupid as you may think Microsoft is, they realize their main revenue stream is in danger. Their stranglehold on a proprietary local fat client operating system and productivity tools will only last so long. They need to diversify.

Microsoft knows Yahoo gets eyeballs. Together, Microsoft and Yahoo together would form a ‘must buy’ company for display ads, just like Google is a ‘must buy’ company for search ads. Just as an ad agency feels it has no choice but to use Google for search advertising, so will they feel that a combined Microhoo will offer such a large number of eyeballs at an attractive price that they will be compelled to purchase display ads from Microhoo for any large scale campaign.

MSFT doesn’t want to break the Internets. It doesn’t want to make another proprietary operating system. It just wants your eyeballs.

Second, it is inappropriate for the government of the United States to prevent this transaction from taking place. Google’s whining is appropriate, as Google’s stockholders absolutely demand lobbying as lobbying is an accepted and expected form of modern business tactics. My thoughts about antitrust regulation are here, so I won’t repeat them.

So, MSFT wants your eyeballs and the government shouldn’t get in the way. That’s my take.

The Examiner has an update on the saga of supervisor Alioto-Pier’s original proposal to considerably increase gate fees. (A gate fee is the rental price of a taxicab charged to cab drivers.)

A much more reasonable $5 increase (compared to nearly $20) was put forward by supervisor Aaron Peskin. Supervisor Chris Daly opposed any increase, notably commenting, “To charge the lowest-earning segments of the taxi industry for a large share of cleaning up the industry is the wrong way to go.”

Another blogging cab driver had a bunch of posts related to this news.

Links:

• Examiner article
• Fellow blogging driver
• Original gate fee increase discussion

And now for something from the archives. Here’s a paper I wrote in March 2004 for Herb Terry‘s excellent history of telecommunications course about the initial failed implementation of direct broadcast satellite — the precursor to the miniature dishes many people use today to receive television signals.

Warning: in-depth and boring unless you really like this sort of stuff. Another warning: this isn’t great writing, so don’t be too harsh. It needs a rewrite but I have a hard enough time reading it, let alone rewriting.

Introduction to Direct Broadcast Satellite

The dream is romantic: high quality television programming, beamed directly from the heavens into every American household. There’s no need to worry about fuzzy pictures — direct broadcast satellite (DBS) will give you a perfect picture — no matter where in the country you live. There’s no need for a clumsy antenna or proximity to a wired cable service — DBS will set America free of these awkward relics. Instead, just mount a small, sexy satellite on your roof, connect it to a receiver, and you are off and running. The idea sounds simple, but satellite delivered direct to consumer television had a rocky start.

Communications Satellite Corp. (Comsat), one of the first dreamers of these space-age dreams, was a government-created private entity created by congress in the 1960’s to organize and implement national satellite communications (“ABC and NAB,” 1979). Comsat created Satellite Television Corp. (STC) in 1980 to oversee the development and implementation of its DBS service (“Lofty bid,” 1980). However, over the next half-decade, STC and its competitors soon learned that their space-age dreams were just a little too far out of this world. Five years later, after investing over a hundred million dollars into their next generation plans, Comsat withdrew from the DBS market (“Another nail in DBS coffin,” 1984). Today, Comsat is owned by Lockheed Martin, acquired through a complicated contractual agreement in 2000 (Hoover’s, 2004).

In the 1970’s, the idea of DBS was “ambitious” and “revolutionary” (“From out of the blue,” 1979) and touted as the “largest single venture in the history of television” (“Lofty bid,” 1980). In Comsat’s eyes, DBS had plenty of positive potential to offer consumers: consistently high quality pictures, over 400 hours of programming per week on multiple channels, and optional services including “a second-language audio channel, closed captioning, stereo sound and teletext” — advanced services for this time period (“Lofty bid,” 1980).

However, in a few short years it became evident that the United States was not ready for DBS. What were the elements that contributed to the quick downfall of these sky-high dreams? Why was this technology with spectacular potential shot down so quickly? This paper discusses the rise and fall of DBS from the early birth of its idea in the late 1970’s until its first downfall in the mid 1980’s. It will also cover the basics of general communications satellite technology and a present a short history of satellite communications preceding the development of DBS to provide a perspective in which these events take place.

Brief History of Satellite Communications Through 1980

Friday, April 13, 1974 marked the launch of Western Union’s Westar I satellite – America’s first domestic communications satellite. Westar I and its successors proceeded to revolutionize all mediums of communications, from newspaper to radio and television, permanently changing the way America and the rest of the world received information. (“After 10 years of satellites,” 1984)

Westar I was the result of a long line of predecessors. In the 1960’s, after successfully sending and receiving transmissions bounced off of earth’s natural satellite — the moon — researchers launched Echo I, a low orbit spherical balloon, measuring 100-feet in diameter. After successfully sending and receiving signals from one earth station to another using Echo I, scientists proceeded to create more complicated artificial satellites. Soon, these satellites included on-board electronics that re-modulated signals to new frequencies and sent them back to earth, instead of simply bouncing signals like a mirror. (“After 10 years of satellites,” 1984)
The major hurdle preventing commercial use of satellites was the high expense required to track a satellite’s orbit from earth receiving and transmitting stations. Earth stations had to continually adjust the aim of the satellite dish to correspond with the artificial satellites’ orbital rotations. Moreover, once the satellite moved over the horizon and out of visibility, it was useless for a 12-hour period. The solution to this major problem was to launch geostationary satellites that rotated at the “same rate the earth rotates on its axis so that the satellites appear from the ground to be stationary.” This paved the way for permanent installation of inexpensive, fixed satellite receiving dishes that can operate for all 24-hours of the day, thus enabling efficient commercial use. (“After 10 years of satellites,” 1984)

In the mid to late 1960’s, satellite technology advanced rapidly through a worldwide satellite consortium called Intelsat. Intelsat launched a series of satellites that led to the development of more modern satellite technologies, enabling transmission of a variety of data types, including audio and video transmissions. However, not until 1975 did satellite communication begin to shape modern television. Home Box Office (HBO), at the time a subsidiary of Time Inc., began its pay television service via satellite on September 30, 1975. Cable operators across the country immediately realized the potential of this pay television service, and installed receiving dishes to offer it to their subscribers. Soon, more cable-only stations followed HBO’s lead and offered their programming via satellite to cable operators across the country. (“After 10 years of satellites,” 1984)

Network broadcasters began using satellite to transfer audio and video in 1975. In that year, Wold Communications used satellite Westar I to broadcast a baseball game live from Milwaukee stadium to over-the-air broadcaster KXAS-TV Fort Worth, thus proving the reliability and, most importantly, profitability of the budding technology for broadcast use. PBS was the first network to switch from an all ground network to a modern satellite network still used today. Although PBS made this switch in 1979, the big three commercial networks (ABC, CBS, and NBC) did not even begin this transition until 1984. (“After 10 years of satellites,” 1984)

Despite the big three’s hesitation to embrace satellite technology, syndicators quickly adapted to the new possibilities. Especially for first-run syndicated programs, delivery via satellite proved to be a quick, efficient, and cost-effective method to send programs simultaneously to broadcasters across the country. The producers of content were not the only ones enamored with the possibilities — advertisers quickly realized the potential: national advertising campaigns could be conceived and implemented in record time, now that content distribution did not depend on slower delivery mechanisms. (“After 10 years of satellites,” 1984)

Cable and broadcast news quickly embraced the new possibilities brought forth by instant communication via satellite. “Transportable earth stations” soon became a regular feature for major news operations — late breaking events could be covered anywhere in the country with a mobile transmitting dish. Even local broadcast stations began to send reporters across the country to report back home via satellite. (“After 10 years of satellites,” 1984)

During the conception of DBS in the late 1970’s and early 1980’s, the television industry was experiencing a massive transformation caused by satellite technology. It is important to recognize these concurrent technological developments while DBS planted its early roots in American society.

Evolution of Direct Broadcast Satellite Development

1979

August 1979 brought forth a surprise announcement from satellite giant Communications Satellite Corp. Comsat disclosed that it was “considering the development of a system to provide pay television by satellite to homes across the country” (“From out of the blue,” 1979). This particularly surprised the broadcast industry, since Comsat was previously seen as a common carrier, and not a content provider (“ABC and NAB,” 1979).

Although details were scarce in this preliminary press release, Comsat explained that their proposal would include as many as six simultaneous channels of programming broadcast across the country. Consumers would pay “between $15 and $22.50 that would include the use and maintenance of small (three feet or less) antennas for programming…” Comsat described that the programming would contain no advertisements and would consist of first-run movies, sports, and educational television, in additional to “data and text transmission.” Dr. Joseph Charyk, Comsat’s president and chief executive officer continues by stating that “the technology for such a system already exists.” (“From out of the blue,” 1979)

However, technology may be the least of Comsat’s worries over the next few years compared to political wrangling. Even in this first article regarding the creation of DBS, the National Cable Television Association (NCTA) raised concerns with the proposal, claiming it was “fraught with a lot of problems.” The reaction of the NCTA was a precursor for the political challenges to come. Four months later, ABC and NAB raised concerns with the Federal Communications Commission (FCC), suggesting that Comsat could not legally create a DBS system based on its charter of creation by Congress in 1962 (“ABC and NAB,” 1979). NAB concerns stated that the development of a DBS system would “bypass conventional video program distribution systems…diverting programming from the traditional broadcast system.” The NAB and other interest groups seemed to be increasingly concerned that DBS television could uproot the comfortable position of localized broadcast television.

1980

Meanwhile, Comsat continued to push forward on all fronts of its DBS service. In early January, Comsat and Sears announced they were investigating a joint-venture deal where Sears would provide marketing, installation and billing capabilities to Comsat’s existing technological prowess (“Comsat, Sears getting cozy,” 1980). Sears already had experience dealing with TV subscription services, as it was working with a subscription television service on the west coast. However, just a few months later in April, both Sears and Comsat issued a terse statement that the two entities would not enter into a joint venture (“Comsat Ends Sears Talks,” 1980). This was particularly disappointing for Comsat, since a joint venture with Sears would have opened up the door for some of its $18 billion in sales (based on its 1978 fiscal year) (“Comsat, Sears getting cozy,” 1980). This was the beginning of a number of quick and fruitless romances between Comsat and potential financial partners.

NAB and other industry groups continued their assault on DBS and Comsat. NAB reinforced its argument that DBS “is inconsistent with the locally based system of broadcasting,” outlined in the Communications Act of 1934 (“NAB board sets strategy,” 1980). Trade journal Broadcasting described NAB’s attitudes as protective of “broadcasters’ interests without leaving [NAB] completely vulnerable to charges of negativism.” However, many of their quotes were anything but positive. In another article describing NAB’s criticism of an FCC staff report on DBS, NAB stated that although it was not “flatly” against DBS, “in light of its potentially disruptive social, political and economic impact on local broadcasting, we do have serious questions about its desirability” (“DBS study missed point,” 1980).

Despite its political thorns, DBS offered the possibility of a technological revolution. While the idea of creating a better television format from scratch using satellite as the distribution medium was scary to some, it offered possibilities for others. Futurists felt that DBS could be the “heart and driving force” behind a completely revamped TV system, featuring “high definition pictures, wide screens and stereophonic sound” (“Chance for a change,” 1980). CBS jumped on board as well, starting a push to implement HDTV via satellite. However, its motives were questionable: although it wanted the FCC to consider implementation of HDTV via satellite, it admitted that much of the technology is in “scientific stages.” Furthermore, CBS “took a swipe” at Comsat’s DBS proposal saying that it would result in the “loss of a unique opportunity to improve the technical quality of television service to the public” (“CBS aims for stars,” 1980). Perhaps a major part of the CBS motivation was to delay the implementation of a future competitor — nationwide DBS.

On the regulation front, the FCC issued an internal report regarding the regulation of DBS. It suggested a policy with notable liberalism: it made no rules concerning program content, prices, types of services, technical standards, receiving equipment ownership, or multi-channel ownership. The report mirrored the “deregulatory spirit” that characterized the FCC at the time (“FCC gets ball rolling,” 1980). The report also said that the FCC must prepare for the 1983 Regional Administrative Radio Conference (RARC 83) that will “allocate DBS frequencies and orbital slots to countries in North and South America” (“Lofty bid,” 1980). RARC 83 was crucial for the FCC and DBS companies, as it determined the international technology standards and frequency allocations by which all operators must abide.

1981

Tuesday, April 21, 1981 brought the first preliminary application approval by the FCC for a DBS system (“Countdown begins on DBS,” 1981). It granted Comsat’s Satellite Television Corporation (STC — a wholly owned subsidiary of Comsat) an experimental license, which permits the initial development and construction of a DBS satellite and receivers, but does not permit launch or operation until after RARC 83 (“FCC to take on,” 1981). Later that year, the FCC received 12 more applications from companies interested in receiving approval for experimental licenses (“Good news, bad news,” 1981). Applicants included previously announced entrants, such as Comsat and the radical CBS HDTV proposal, and new entrants including the United States Satellite Broadcasting (USSB) Company – owned by Hubbard Broadcasting, a radio broadcasting pioneer (“An ambitious plan,” 1981) and corporate giant RCA. Hubbard’s USSB proposed a unique co-op of independent stations across the country. These broadcasters would use the DBS satellite service to both share content with other stations (transmit their unique programming and receive other national programs) and transmit to remote viewers, who live out of range of standard over-air signals. This unique system promised to “bridge DBS and conventional broadcasting and bring free television to every home in the United States” (“An ambitious plan,” 1981).

Meanwhile, discussion continued on the merits and demerits of DBS. July 16, 1981 was the deadline for petitions to deny Comsat/STC’s DBS application with the FCC. Nine petitions were filed from trade groups such as NAB, ABC, and other local groups that used electromagnetic frequencies to be allocated to DBS. The trade groups argued on every possible stance, such as Comsat’s alleged inability to finance the development of DBS satellites, questions regarding Comsat’s actions in unrelated contract negotiations, concerns regarding frequency interference, appropriateness of Comsat’s actions with regard to its charter, and of course, concerns regarding local competition. Interestingly, NAB claimed that there are “far better public interest uses for” the limited 12 GHz DBS band than “the same mass entertainment fare that is already available on conventional television” (“If you can’t join ‘em,” 1981). It seems as though NAB was willing to go as far as suggesting its member stations were not producing quality content in order to slam DBS. Comsat’s STC continued to rebut these claims and accused its detractors of making “every conceivable attempt to delay the introduction of DBS” (“Comsat defends itself,” 1981). Comsat president, Dr. Joseph Charyk felt the broadcasting industry was overreacting, “particularly since they apparently have not really analyzed or thought through what’s involved” (“Joe Charyk and the gleam,” 1980).

Congress discussed DBS at a December 15 House Telecommunications Subcommittee hearing. Committee Chairman Timothy Wirth (D-Colo.) addressed the latent issue of broadcasters raising regulatory storm in order to block DBS. “Just last week broadcasters appeared before this subcommittee arguing for the deregulation of broadcasting… Today, this same subcommittee is being asked by the broadcasting industry to prevent a potential new source of video from becoming operational.” (“DBS gets a day,” 1981) The committee heard testimony from both satellite companies in favor of liberal and speedy DBS regulation, and broadcasters in favor of further research.

1982

In early 1982, Comsat and the other seven remaining DBS applicants anxiously awaited the final approval of interim rules regarding DBS spectrum allocation. In the meantime, they focused on developing the hardware components that would run their future systems. Comsat’s STC sent out requests for proposals for the hardware components of their system in January and aimed to choose a manufacturer by the end of summer (”Comsat’s STC: Poised,” 1982). The DBS applicants also focused on financing. Some, such as Direct Broadcast Satellite Corp. (DBSC) and USSB looked for financing through stock and bond offerings, while others such as STC looked for partners with big pockets (“Putting their money,” 1982).

CBS continued to push its HDTV via DBS system. In February CBS brought its touring HDTV show to Washington to show lawmakers the new technology. Even FCC Commissioner Quello was surprised at the quality stating that he “was certainly very, very impressed” (“HDTV wows ‘em,” 1982). However, a study commissioned by Hubbard, parent company of DBS hopeful USSB, found that “only 10% of the 600 people surveyed thought the US would switch to a system” such as HDTV if such a changeover rendered existing television receivers obsolete. USSB said that while there is some interest in “improved picture clarity, interest drops off sharply when those surveyed are advised that new sets needed to receive and display the improved pictures might be twice the price of conventional sets” (“Survey politics of HDTV,” 1982).

In June of 1982, the FCC adopted interim rules for DBS licensing and operation. Chairman Mark Fowler called the event a “historic occasion.” The commission unanimously voted in approval, saying the benefits of “authorizing interim DBS systems outweighed any adverse impact the new service might have in displacing current spectrum users or in diminishing the audiences of terrestrial broadcasters” (“FCC opens the skies,” 1982). The FCC took a loose regulatory approach without applying specifics on most aspects of DBS operations. On the topic of localism raised frequently by NAB, FCC Commissioner James Quello said that he wanted to ensure localism would not be sacrificed and, although he did not think DBS “is going to be the death knell of localism…, [he doesn’t] think it’s going to help it, either.” Later that year the FCC authorized construction permits to the seven applicants in addition to Comsat/STC, starting “what could prove to be the most expensive marketplace competition in broadcast history” (“Where there once was one,” 1982).

Later in 1982, Comsat signed a $113 million contract with RCA Astro-Electronics Division to build two high-power satellites for DBS service: one for regular operation, and one spare. The terms of the contract outline completion by January and April of 1986 for the two respective satellites (“Comsat signs contract,” 1982).

1983

July brought RARC 98 to fruition, with the United States and other North and South American countries participating to allocate direct broadcast satellite positions, frequency allocation, and operating power. United States received “eight orbital positions, each with the maximum of 500 MHz of spectrum space…that provides for up to 32 channels,” which the US had originally sought. However, it did not receive all of the orbital slots it had proposed, which was understandable because of Canada and Mexico’s needs (“Coming to consensus,” 1983). America had also been hoping to ensure a high-power system, but was unsuccessful on that front; the international compromise called for a 60% less powerful satellite than the US had asked for. However, the US considered the option of not abiding by the conference’s decision and going ahead with high-powered DBS satellites in the future (“U.S. outvoted,” 1983).

1983 was an exciting year for United Satellite Communications, Inc. (USCI), previously known as United Satellite Television Corp. In February, USCI announced a partnership with Prudential Insurance Co. of America to provide venture capital of $50 million to $100 million to develop a DBS service. USCI also announced that General Instrument Corp., a partial owner of USCI, would manufacture earth stations and decoders for the future DBS satellite system (“Prudential places bet,” 1983). November of that year, USCI announced that it would begin service by November 15 “in 33 counties of central Indiana” (“DBS set to debut,” 1983). USCI did not launch a satellite of its own, instead it leased from an existing Ku-band satellite until it could raise the capital to launch a high-powered bird of its own (“The search for ubiquity,” 1985). Despite its lack of diverse program offerings, USCI debuted in mid-November as scheduled.
Comsat’s STC continued to search for a financing and content partner. In August, 1983 STC reported that it had been in discussions with CBS and General Cinema for a joint-venture partnership with one other company; each company would hold a fourth of the venture. Comsat, like USCI, also planned to lease a few transponders on a non-DBS satellite to be launched in 1984. It would use this satellite to provide service to a test-market and iron out problems before launching its own high-powered DBS satellite (“Marriage made for heavens,” 1983).

In November, HBO announced its interest in joining the DBS race. It wanted to bring together fellow cable programmers and operators to offer a “low-power DBS service next year to millions of uncabled homes in direct competition with medium-power and high-power DBS services.” HBO would offer this service via an unused transponder that it leases on the Galaxy I satellite. HBO would enlist the services of local cable operators to advertise and install the service and equipment in each market. (“HBO mobilizing,” 1983)

1984

1984 was a roller-coaster year for Comsat. Early 1984, Comsat had CBS signed on in an agreement to work together to form a joint venture to “develop all aspects of a DBS service” but the relationship did not yet have a joint equity agreement. Alcoa-NEC Communications Corp and Toshiba Corp. agreed to manufacture the consumer receiving equipment (“STC lines up partners,” 1984). Judging by this progress, Comsat seemed to be on solid ground. They had finally found a relationship that made sense: CBS had both the financial and programming background to help this endeavor fly. In May, the FCC approved STC’s request for two satellite orbital positions for East Coast coverage. The FCC would delay granting its request for west coast coverage until STC could present further evidence of financial backing and final satellite contracting (“STC moves step closer,” 1984). However, STC’s plans began to fall apart in July when CBS pulled out of all DBS involvement, including its partnership with STC. The withdrawal of CBS left STC “standing at the alter, wondering about its future” (“CBS drops out of running,” 1984). STC did not have long to wonder about its future – in September it began negotiations to acquire USCI from Prudential at an estimated cost of $125 to $200 million (“Comsat, Prudential, UPI principals link up,” 1984). However, by December Comsat’s board decided to not move forward with the proposed USCI and STC merger. The USCI and STC merger was probably Comsat’s last hope of staying in the DBS business, but the board was tired of five years of losses – adding up to about $140 million. (“Another nail in DBS coffin,” 1984).

USCI was excited to expand throughout early 1984, but soon ran into financial problems after failing to raise $40 million in capital through a private stock offering (“USCI stays afloat,” 1985). It had projected spending $198 million in 1984 (“USCI goes to Washington,” 1984) and was running in the red while trying to build its national subscriber base.

In October of 1984, the FCC rejected four more firms’ applications for high power DBS satellite operation, leaving only DBSC, STC, USSB, and Dominion Video Satellite, a small Florida startup (“DBS ranks cut in half,” 1984). USCI was not included in these applications since it was not a high-power DBS applicant and provided its service via existing Ku-band satellites. Hubbard’s USSB continued to chug along, signing a contract with RCA Astro-Electronics for two direct broadcast satellites and notifying the FCC of its intentions to launch the birds (“Hubbard’s DBS pricetag,” 1984).

1985

DBS began to slip out of the minds of broadcasters in 1985 as company after company began to fold. In late February, USCI announced that it had teamed up with Tele-Communications, Inc. (TCI), the nation’s largest Multiple Systems Operator (MSO) at the time. TCI contributed what was billed “a substantial amount of money” into USCI operations to keep them afloat while they renegotiated contracts and attained more subscribers. A partnership between MSO TCI and DSB USCI seemed logical – TCI could provide an existing programming and operational base, while USCI could provide access to the millions of inaccessible consumers who did not have access to cable (“USCI stays afloat,” 1985).

TCI’s efforts did not pay off — less than a month after the announcement of a cash infusion, TCI decided that USCI would not be a profitable enterprise. In April, USCI went dark, ending the first era of DBS. However, from the bones of STC and USCI came a new type of ad hoc direct broadcasting: consumers began to embrace C-band and Ku-band satellite services. USCI served as a proof of concept that smaller, consumer dishes could effectively receive Ku-band signals. In fact, in mid-1985 estimates showed that nearly one million consumers had installed Ku or C-band home dishes. However, content providers’ next challenge was to agree on a standardized scrambling system and to influence consumers to accept paying for Ku and C-band satellite service so that they could earn returns on their programming. (“The search for ubiquity,” 1985)

Conclusion

High-power direct broadcast satellite service was a shining star ahead of its time. Everything fought against the initial development of DBS — economic, competitive, and technological pressures made the first round of DBS pioneers quick losers in the television business.
Economically, this project presented a difficult circumstance: high risk combined with high initial capital requirements. This difficult combination, coupled with the fact that many DBS companies were start-ups with insufficient equity or assets, proved to be a key component of the DBS downfall. Even large companies, such as Comsat’s STC, had difficulty arranging financial backing from banks, public stock offerings, or equity partnerships.

DBS faced heavy competition from large, established networks of broadcasters. Broadcasters, cable companies, and even frequency holders of the proposed DBS spectrum fought heavily to shut down DBS approval early on in the process. Perhaps most ardent were broadcasters, scared at the prospect of their industry being turned upside down by this new technology. Coupling their political sway, traditional broadcast networks presented a formidable roadblock. Luckily, the FCC was in a period of strong liberalism and deregulation, and smoothed the way for the approval of DBS, despite well-funded and passionate opposition against it.

Direct broadcast satellite was paving a brave new technological path, which presented formidable engineering and financial obstacles. Satellite leases were expensive, due to their high demand and low supply. Satellite technology, especially high-powered DBS birds, was just recently developed and still being improved. Mass production of consumer earth stations had never before been conceived, much less implemented and refined. The bankruptcy of these companies was due in large part to the investments they made in these new technologies. Moreover, digital compression had not been made into an efficient and effective form as it is today, which allows modern satellite broadcasters to beam many more channels per transponder than ever imagined. Without this bandwidth compression, consumers did not seem to be overly enticed by the limited choice of channels.

Overall, DBS was an amazing dream, pioneered by technological and ideological leaders. It promised an effective and efficient method to provide programming to nearly every consumer in America. A combination of economic, competitive, and technological forces caused DBS to have a short life-span during its first effort to reach the heavens. However, although these early pioneers may have been quick to fail in the business of DBS, they will be long remembered as the dreamers who successfully paved the way for its eventual technological revolution.

References:
ABC and NAB contend Comsat can’t legally get into pay TV. (1979, December 10). Broadcasting, 97, 88.
After 10 years of satellites, the sky’s no limit. (1984, April 9). Broadcasting, 106, 42-68.
An ambitious plan to have it both ways in TV and DBS. (1981, May 4). Broadcasting, 100, 28.
Another nail in the DBS coffin: Comsat bows out. (1984, December 3). Broadcasting, 107, 36.
CBS aims for the stars on satellite TV. (1980, October 13). Broadcasting, 99, 23.
CBS drops out of running for DBS. (1984, July 2). Broadcasting, 107, 38.
Chance for a change: the other promise of DBS. (1980, September 15). Broadcasting, 99, 37.
Coming to consensus in Geneva. (1983, July 18). Broadcasting, 104, 24-25.
Comsat, Sears getting cozy over satellite-to-home service. (1980, January 7). Broadcasting, 98, 28-30.
Comsat defends itself against broadcasters’ DBS opposition. (1981, February 23). Broadcasting, 100, 70.
Comsat Ends Sears Talks. (1980, April 9). The Washington Post, p. D8.
Comsat signs $113-million contract for DBS satellites. (1982, November 1). Broadcasting, 103, 24-25.
The countdown begins on DBS. (1981, April 27). Broadcasting, 100, 28-30.
DBS gets a day in the House. (1981, December 21). Broadcasting, 101, 24-27.
DBS ranks cut in half. (1984, October 15). Broadcasting, 107, 75-76.
DBS study missed the point, say NAB and NBC. (1980, July 14). Broadcasting, 99, 57.
FCC gets the ball rolling on DBS. (1980, October 6). Broadcasting, 99, 24.
FCC opens the skies to DBS. (1982, June 28). Broadcasting, 102, 27-29.
FCC to take on DBS this week. (1981, April 20). Broadcasting, 100, 79-80.
From out of the blue: Comsat designs direct-to-home subscription TV. (1979, August 6). Broadcasting, 97, 27-28.
Good news, bad news in DBS spacerush. (1981, July 20). Broadcasting, 101, 23-27.
HBO mobilizing cable industry to jump into DBS. (1983, November 21). Broadcasting, 105, 28-29.
HDTV wows ‘em in Washington, too; FCC majority gives it a rave. (1982, March 1). Broadcasting, 102, 36-37.
Hoover’s Online. (2004, March 29). COMSAT Corporation – Historical Record – Business Boneyard. Retrieved March 29, 2004 from http://premium.hoovers.com/subscribe/co/boneyard/factsheet.xhtml?COID=10379.
Hubbard’s DBS pricetag: $160 million+. (1984, June 25). Broadcasting, 107.
If you can’t join ‘em, beat ‘em. (1981, July 20). Broadcasting, 101, 26-27.
Joe Charyk and the gleam I Comsat’s eye. (1980, September 15). Broadcasting, 99, 50-64.
Lofty bid for first DBS system. (1980, December 22). Broadcasting, 99, 23-25.
Marriage made for the heavens? (1983, August 29). Broadcasting, 105.
NAB board sets stay-loose strategy for the future. (1980, September 29). Broadcasting, 99, 34.
Prudential places a bet on DBS. (1983, February 7). Broadcasting, 104, 31-32.
Putting their money where their applications are. (1982, March 8). Broadcasting, 102, 160-162.
The search for ubiquity in television. (1985, July 8). Broadcasting, 109, 55-56.
STC lines up some partners. (1984, January 2). Broadcasting, 106, 39-40.
STC moves step closer to DBS reality. (1984, May 14). Broadcasting, 106, 39-40.
Survey politics of HDTV via DBS. (1982, May 17). Broadcasting, 102, 72.
U.S. outvoted at RARC on DBS power standard. (1983, July 18). Broadcasting, 104, 25-26.
USCI goes to Washington. (1984, January 30). Broadcasting, 106, 79-80.
USCI stays afloat with cash from TCI. (1985, April 1). Broadcasting, 108, 89-90.
Where there once was one, now there are many. (1982, November 8). Broadcasting, 103, 40-41.

I condensed my usual rant about peak medallions down to a 2 minute piece for a KQED‘s Perspective. It’s a quick op-ed that airs during the morning drive time. It will air again on Saturday morning.

It sounds a bit odd to hear my own voice, but it was a fun process to write for the spoken word and record it at the station.

Link (Direct MP3 Link)

A fellow SF taxi driver and blogger, the same guy or gal that posted a great map of where to find a cab in the City, posted a few pictures of a taxi operating illegally in the City during his evening shift. Then he posted a few more of another illegal cab.

A few weeks ago the Examiner reported on a crack down of illegal limos operating as for hire taxis on the streets. (Limos in the City are only supposed to pick up pre-arranged fares. They are not permitted to pick up on the street.)

Should the City be cracking down on illegal operators? Of course.

• Illegal taxis often operate with no meter at all, or a meter that hasn’t been approved by the City Department of Agriculture and Weights and Measures. Customers can be easily ripped off in these situations.
• Vehicle safety isn’t regulated.
• Nor are driver ability or criminal background history checked. These drivers could be operating without a valid California driving license!
• If you leave you cell phone in the cab, who would you call to get it back?
• If you’re injured in an accident and it’s the operator’s fault, he or she may not have proper liability coverage. You would have to foot your own medical bills.

But, the real problem is that there aren’t enough cabs on the street during peak hours. When I work, often during non-peak shifts, I RARELY see bandit cabs. Why? I work kinda crappy (off-peak) shifts when extra cabs are obviously not needed.

The prevalence of illegal bandit cabs operating despite these considerable risks is strong evidence that our City needs peak medallions, the ability to operate more LEGAL taxicabs during peak times, immediately.

The City’s inability to implement peak medallions encourages the operation of illegal taxis which pose a real danger to City residents and guests.

Link (SF Taxi Live blog post)
Link (Examiner article)