Time Warner Cable and Viacom have ended their dispute over whether the cable company had the right to stream Viacom-owned cable networks over its lineup of streaming apps for portable devices and home computers.

This means the cable company will be restoring streams of Comedy Central, MTV, VH1 and other Viacom networks over the coming weeks.  In return, Time Warner Cable has agreed to carry/continue Viacom’s Country Music Television on its cable systems.

From the official statement:

Viacom and Time Warner Cable have agreed to resolve their pending litigations. All of Viacom’s programming will now be available to Time Warner Cable subscribers for in-home viewing via internet protocol-enabled devices such as iPads and Time Warner Cable will continue to carry Viacom’s Country Music Television (CMT) programming. In reaching the settlement agreement, Time Warner Cable and Viacom were also able to resolve other unrelated business matters to their mutual satisfaction. Neither side is conceding its original legal position or will have further comment.

The dispute had no effect on traditional cable carriage of these networks. Only online streaming was impacted.

Growing questions are being raised about whether Comcast is violating FCC and Department of Justice policies that prohibit the cable company from prioritizing its own content traffic over that of its competitors.

Comcast’s Xfinity Xbox app offers Comcast customers access to Xfinity online video content without eating into their monthly 250GB Internet usage allowance. Netflix has called that exemption unfair, because its content does count against Comcast’s usage cap. New evidence now suggests Comcast may also be prioritizing the delivery of its Xfinity content over other broadband traffic, a true Net Neutrality violation if proven true.

Bryan Berg, founder and chief technology officer at MixMedia, believes he has found proof the cable company is giving its own video content preferential treatment, in this somewhat-technical finding published on his blog:

What I’ve concluded is that Comcast is using separate DOCSIS service flows to prioritize the traffic to the Xfinity Xbox app. This separation allows them to exempt that traffic from both bandwidth cap accounting and download speed limits. It’s still plain-old HTTP delivering MP4-encoded video files, just like the other streaming services use, but additional priority is granted to the Xfinity traffic at the DOCSIS level. I still believe that DSCP values I observed in the packet headers of Xfinity traffic is the method by which Comcast signals that traffic is to be prioritized, both in their backbone and regional networks and their DOCSIS network.

Berg also contends Comcast’s earlier explanation that its Xfinity content should be exempt from its usage cap because it travels over the company’s private Internet network is also flawed:

In addition, contrary to what has been widely speculated, the Xfinity traffic is not delivered via separate, dedicated downstream channel(s)—it uses the same downstream channels as regular Internet traffic.

Berg

Broadband traffic management is of growing interest to Internet Service Providers, who contend it can be used to manage Internet traffic more efficiently and improve speed and time-sensitive online applications like streamed video, online phone calls, and similar services. But manufacturers of traffic management equipment also market the technology to ISPs who want to favor certain kinds of content while de-prioritizing or even throttling the speed of non-preferred content. The technology can also differentiate traffic that counts against a monthly usage cap, and traffic that does not.

Quality of Service (QoS) technology can be used to improve the customer’s online experience or help a provider launch Internet Overcharging and speed throttling schemes that can heavily discriminate against “undesirable” online traffic.

Berg further found that when he saturated his 25Mbps Comcast broadband connection, traffic from providers like Netflix suffered due to the bandwidth constraints.  Because he flooded his connection, Netflix buffered additional content (slowing his stream start time) and reduced the bitrate of the video (which can dramatically reduce the picture quality at slower speeds). But when he launched Xfinity video streaming, that traffic was unaffected by his saturated connection. In fact, he discovered Xfinity traffic was exempted from his normal download speed limit, allowing his connection to exceed 25Mbps.

While that works great for Xfinity fans who do not want their videos degraded when other household members are online, it is inherently unfair to competitors like Netflix who are forced to reduce the quality of your video stream to compensate for lower available bandwidth.

According to the consent decree which governs the merger of the cable operator with NBC-Universal, prioritizing traffic in this way is a no-no when the company also engages in Internet Overcharging schemes, namely its arbitrary usage cap:

“If Comcast offers consumers Internet Access Service under a package that includes caps, tiers, metering, or other usage-based pricing, it shall not measure, count, or otherwise treat Defendants’ affiliated network traffic differently from unaffiliated network traffic. Comcast shall not prioritize Defendants’ Video Programming or other content over other Persons’ Video Programming or other content.”

This graph shows Berg's artificially saturated 25Mbps Comcast broadband connection. The traffic in red represents Xfinity Xbox traffic, which is given such high priority, it allows Berg to exceed his usual download speed limit.

Comcast sent GigaOm a statement that denies the company is doing any such thing:

“It’s really important that we make crystal clear that we are not prioritizing our transmission of Xfinity TV content to the Xbox (as some have speculated). While DSCP markings can be used to assign traffic different priority levels, that is not their only application – and that is not what they are being used for here. It’s also important to point out that our Xfinity TV content being delivered to the Xbox is the same video subscription that customers already paid for and is delivered to their home over our traditional cable network – the difference is that we are now delivering it using IP technology to the Xbox 360, in a similar manner as other IP-based cable service providers. But this is still our traditional cable television service, which is governed by something known as Title VI of the Communications Act, and we provide the service in compliance with applicable FCC rules.”

Our View

Comcast, as usual, is talking out of every side of its mouth. In an effort to justify their unjustified usage cap, they have pretzel-twisted a novel way out of this Net Neutrality debate by paving their own digital highway on a Comcast private drive.

Comcast argues their 250GB usage cap controls last-mile congestion to provide an excellent user experience. That excuse completely evaporates in the context of its new toll-free video traffic. In fact, their earlier argument that its regionally-distributed streaming traffic should not count because it does not travel over the “public Internet” at Comcast’s expense does not even make sense.

Berg provides an example:

A FaceTime call from my house to my neighbor’s—which never leaves even the San Francisco metro area Comcast network, given that both of us are Comcast customers—goes over the “public Internet.”

Yet Comcast’s Xbox streams, which pass from Seattle to Sacramento to San Francisco through all of the same network elements that handle my video call (and then some!) are exempt from the bandwidth cap?

You can’t have it both ways, guys.

DOCSIS 3 technology has vastly expanded the last mile pipe into subscriber homes. If Comcast can launch their own private pipe for unlimited IPTV traffic that travels down the same wires their Internet service does, they can comfortably handle any additional capacity needs to support their “constrained” broadband service without the need to limit their customers’ use.

Usage caps remain an end run around Net Neutrality. Consumers given the opportunity to view content under a usage cap on the “public Internet” or using the “toll-free” traffic lane Comcast created for content from their “preferred partners” will make the obvious choice to protect their usage allowance. Comcast is certainly aware of this, and it is a clever way to discriminate through social engineering. It’s also less obvious. You don’t have to de-prioritize or block traffic from your competition to have an impact, you just have to limit it. Customers who repeatedly exceed their usage allowance face suspension of Comcast broadband service for up to one year. That’s a strong incentive to follow their rules.

Netflix is fighting to force Xfinity traffic to fall under the same arbitrary usage cap regime Netflix endures — a truly shortsighted goal. The real issue here is whether Comcast should be capping any of its Internet service.

Comcast has given us the answer, launching the very bandwidth-intense video streaming it used to decry was contributing to an Internet traffic tsunami.

It’s time for Comcast to drop its usage cap.

Walden

House Republicans attacked the Federal Communications Commission Tuesday for “rushing” special waivers and conditions that allowed LightSquared to begin operations without fully considering its impact on GPS devices and services.

GOP Reps. Cliff Stearns (Fla.), Fred Upton (Mich.), and Greg Walden (Ore.) said the need for intensifying an investigation first launched in February was more pertinent than ever with this week’s bankruptcy declaration by the wireless Internet service.

“Now, more than ever, we need to get to the bottom of how we got this far down a dead-end road,” said the congressmen in a joint statement. “There are many unanswered questions, specifically about whether the FCC’s own objectives led to sloppy process. We are continuing to examine the information we’ve received so far to determine what happened and how it can be avoided in the future.”

Upton

All three said the FCC’s “rushed” review cost investors billions that were “wasted” building a broadband network that was later determined to create serious interference problems for global positioning satellite receivers.

The FCC previously denied they were pressured by Obama Administration officials to approve the project as part of the White House’s strong focus on broadband improvement.

But the House Republicans believe the interference problems should have been identified before the project got too far along.

Initially, the FCC issued a conditional approval to begin testing the service, which quickly led to growing evidence it unintentionally blocked GPS reception.

A preliminary report found GPS receivers were incapable of rejecting the adjacent channel interference from LightSquared’s powerful ground-based transmitters.

While technically not the fault of LightSquared, which argued it should not be held responsible for poor GPS receiver design, the fact millions of GPS receivers are already in use swayed the FCC to reject the use of those frequencies for the wireless Internet service.

Happy Days Are Always Here for Top Telecom Execs

Our friends at Fierce Cable put together a list of the top-paid telecommunications executives, and they’re in the money. Your money. While your rates keep going up, their take-home pay often is, too.

Remarkably, actual performance as executives (or lack, thereof) often had no relationship to their ultimate pay package, with a handful of exceptions:

Cable & Satellite

Brian L. Roberts, Comcast — $26.9 million: The Roberts family has dominated Comcast since the 1980s, so it is no surprise their pay packages are as colossal as the company itself.

Michael J. Lovett, Charter Communications — $20.54 million: He resigned in Feb. 2012 but got a great golden parachute: nearly double the compensation he earned the year before. Charter is one of America’s least-distinguished cable companies, usually scoring just above “pond scum” in popularity with customers. But you can take that trash talk when you walk $20 million to the bank.

Glenn A. Britt, Time Warner Cable — $16.43 million: His pay went down slightly (well, by a million dollars but with that kind of money, does it really matter?) in 2011. Britt has been around at some iteration of Time since 1972… when Nixon was still president, so he worked his way to the top. But some of his best accomplishments are irritating his customers with talk of overcharging them for Internet access.

James L. Dolan, Cablevision — $11.45 million: The Dolan family and Cablevision go together like cookies and milk, but Wall Street can’t help but bet when the family will finally cash out of cable and sell the company to Time Warner or Comcast. With $11 million in salary, stock awards, and bonuses, what’s the hurry?

Joseph Clayton, Dish Network — $9.84 million: Clayton is a Dish freshman, only coming on board 11 months ago. His salary was a paltry $467,000 in 2011. Thank goodness for the $9 mil in stock and bonus pay!

Michael D. White, DirecTV — $5.94 million: Ouch… a pay cut. White made $32.93 million the year before. Now he’ll have to clip coupons from the Sunday newspaper like the rest of us.

Rodger L. Johnson, Knology — $3.13 million: Not bad for running a company almost nobody has heard of and will soon no longer exist.  WideOpenWest bought them out last month.

The Wireline Companies & Their Friends

Stephenson: Blew a $39 billion dollar merger deal with T-Mobile, but walks away with $22 million in pay anyway.

Lowell McAdam, Verizon — $23.1 million: McAdam’s promotion paid handsomely. As former chief operating officer, he only walked home with a little more than $7 million last year. Now he’s earning every penny conjuring up ways he can do away with your cell phone subsidy -and- keep Verizon Wireless’ rates as high as ever.

Randall Stephenson, AT&T — $22.01 million: If you blew a multi-billion dollar merger deal at your company, do you think the only punishment you’d receive is a $5 million pay cut? Stephenson is the cat that fell out of the wireless merger window, and landed on his feet unharmed. Unfortunately the same isn’t true for his customers.

Dan Hesse, Sprint — $11.88 million: His pay is down about $2 million from 2010, and he recently announced he was going to take another pay cut for the team. If anyone deserves hazard pay, Hesse is the man. Wall Street hates him for not following his competitors gouging customers with higher prices and more restrictive service plans and policies. The big money crowd in New York’s financial district already has his going away party well-planned.

Jeff Gardner, Windstream — $9.78 million: His pay is up around $2 million. Windstream can afford it, acquiring companies later stripped clean of employees. PAETEC workers will learn this lesson soon enough. At Windstream, all the money rises to the top… management that is.

George A. Cope, Bell Canada — $9.6 million: His salary more than doubled over 2010 and why not. Bell is the first telecommunications company in North America to be audacious enough to demand an entire country be stripped of flat rate Internet service. That move managed to organize 500,000 Canadians that normally are resigned to the fact the revolving door at the Canadian Radio-tv and Telecommunications Commission has locked them out for years. Thanks Bell!

Glen F. Post III, CenturyLink — $8.55 million: Post saw his pay slashed from $14.5 million the year before, but merger deals like Qwest (with the corresponding huge bonus for pulling it off) only come once or twice in a career.

Hesse: Wall Street's least-wanted.

Maggie Wilderotter, Frontier — $6.72 million: No, we don’t understand it either. Her pay is down from $8.58 million, but considering Frontier’s current stock price and bottom-rated service, wouldn’t half of this money be better spent on improving broadband in states like West Virginia?

John F. Cassidy, Cincinnati Bell — $6.06 million: Cassidy earned more than two million more the year before. Cincinnati Bell is an aberration in an industry that is convinced the only good thing telecom companies can do is merge with each other to get bigger and bigger.

Paul H. Sunu, FairPoint — $4.25 million: The company that couldn’t find one customer’s business on a service call despite being literally right next door to FairPoint itself, is clawing its way back from bankruptcy and Sunu’s pay package reflects that. He only earned $775,000 the year earlier.

Ian Paul Livingston, BT — $3.8 million: British Telecom’s chief got a modest salary hike in 2011, and the U.K. phone company has done modestly better recognizing better broadband in the key to its future. BT is the AT&T of the United Kingdom, but British salaries are downright frugal compared to the high flyers on this side of the Atlantic.

David A. Wittwer, TDS Telecom — $2.29 million: You can’t complain about a cool $2 million in salary for a company with only around 1.1 million customers.

Ben Verwaayen, Alcatel-Lucent — $2.25 million: His salary dropped slightly from 2010. Alcatel-Lucent could do considerably better if they can win the public policy debate that fiber optic broadband is the wave of the future. Alcatel-Lucent is a major player.