Media Study - Medija centar Beograd

carry obligations, other rules may constrain the operation of cable networks in order to ensure an affordable cost
for the consumer, such as price controls.
In any event, cable operators will face increased capacity problems in the short term, because of the need to carry
both analogue and digital channels during the changeover from analogue to digital; must carry rules, if not well
managed can amplify such problems. 49
The impact on distributors, from economical point of view comprises:
Direct cost
Higher investment cost
o This sizing of respective technologies has to be expanded due to the increase of number of channels
Increase of cost for operation
o Cost of operation is higher because of increased number of channels
Increase of cost for maintenance
o Cost of maintenance is higher because of increased number of channels.
The increase of cost follows to the numbers of channels obligatory distributed by the cable TV provider in the
network.
Indirect cost/lost on profit
Copyrights clearing for must-carry programmes
Decrease of income generated by re-transmitting channels paying for being transmitted in the bundled
package offer of the cable TV network
Decrease of “attractiveness” of the bundled package offer of the cable TV network to the audience and
following decrease in the number of subscribers, thus profit forgone.
There are several ways to calculate the cost of must-carry obligations, ranging from an average pricing rule to an
efficient component pricing rule. In the former case, the cost of must-carry obligations will depend on the cost of
each element of the network used to fulfill the obligations. In the latter case, the cost will depend on the cost of
each of the network element plus the profit forgone as the network has to be used for the must-carry obligations
instead of providing other electronic communications services.
However, distribution network providers face due to an continuous increase of programmes covered by must-carry
regulations (as many of public service broadcasters on national and local levels expand the number of outlets they
offer) a real burden when a certain “adequate” portion of must-carry programmes in their programme offer is
exceeded 50 .
49 In the longer-term, capacity constraints may become less of a problem with digitalization, as is already the case with satellite broadcasting.
However, certain technologies, such as digital terrestrial broadcasting, will not escape capacity constraints in the foreseeable future.
50 In some Member States, 50 % or more of the capacity available on cable television networks is dedicated to must-carry channels. In certain
countries, compensation can be asked from broadcasters or subscribers. (source: EU working paper on must carry
http://ec.europa.eu/information_society/policy/ecomm/doc/current/broadcasting/working_doc_must_carry.pdf , retrieved on April 23 rd 2010)
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