The cable industry’s broadband Achilles’ heel has always been upstream speeds that are set much lower than download speeds. But the days of asymmetric cable broadband may soon be a thing of the past if CableLabs successfully defines a new Full Duplex extension for DOCSIS 3.1 — bringing symmetrical broadband speeds to cable companies across the country.

CableLabs sees the potential of eventually offering multi-gigabit broadband over today’s existing hybrid fiber-coax (HFC) cable systems. Marketing 1,000/1,000Mbps internet access could keep cable operators competitive with fiber to the home services that already offer symmetrical internet speeds.

The cable industry-supported research group is collaborating with vendors, according to Belal Hamzeh, vice president of wireless for CableLabs, in a blog post.

“The ecosystem support for the Full Duplex DOCSIS 3.1 technology has been staggering, with many vendors collaborating and contributing to the development of the technology,” Hamzeh wrote. “A recent example is Cisco’s contribution of a new silicon reference design of a digital echo canceler that maximizes the use of HFC capacity to provide a scalable multi-gigabit return path.”

The Full Duplex DOCSIS 3.1 project transitioned from the innovation phase to the R&D phase in June. A working group will continue to meet on a regular basis to finalize the specification, which will allow vendors to begin producing modems that support the new standard.

The cable industry prepares for war over a watered-down set-top box reform proposal many companies initially supported.

You can’t please cable companies any of the time.

After months of an intense lobbying effort to kill Federal Communications Commission Chairman Thomas Wheeler’s set-top box reform proposal that would have created an open standard allowing manufacturers to compete for your box needs, the cable industry has declared war on the watered-down compromise released last week that many cable operators lobbied for as a suitable alternative.

“While we appreciate that Chairman Wheeler has abandoned his discredited proposal to break apart cable and satellite services, his latest tortured approach is equally flawed,” said Comcast’s vice president of government communications Sena Fitzmaurice in a statement. “He claims that his new proposal builds on the marketplace success of apps, but in reality, it would stop the apps revolution dead in its tracks by imposing an overly complicated government licensing regime and heavy-handed regulation in a fast-moving technological space. The Chairman’s new proposal also violates the Communications Act and exceeds the FCC’s authority.”

That’s a veiled threat Comcast may take the FCC to court if they proceed with the watered down reform policy now advocated by Chairman Wheeler.

Charter Communications, newly enlarged with Time Warner Cable and Bright House Networks in its family, also issued a statement claiming the FCC will ruin everything:

“Enabling consumers to use apps instead of set-top boxes may be a valid goal, but the marketplace is already delivering on the goal without overreaching government intervention. The FCC’s mandate threatens to bog down with regulations and bureaucracy the entire TV app market that consumers are increasingly looking to for innovation, choice and competition.”

Sensing blood in the regulatory waters, the pile on from Congress and programmers that depend on their relationships with large cable operators was inevitable and quick:

The top Democrat on the House Energy and Commerce Committee said Monday that he is doubtful.

Pallone

“While I commend Chairman Wheeler for working to solve this difficult issue, I’m concerned that this latest proposal will not work, particularly when it comes to licensing,” Rep. Frank Pallone (N.J.) said in a statement. “Ultimately, I’m skeptical that the revised plan will benefit consumers.”

Apple TV

Apple’s ability to successfully force its way into the pay television business with a cord-cutter’s streaming TV solution has been left languishing since 2009, thanks to some of America’s largest cable and entertainment companies who think Apple is arrogant and out of touch.

The Wall Street Journal today published a story showing how Apple’s plans to challenge the cable TV industry much the same way it revolutionized digital music has rubbed the big and powerful the wrong way. Apple’s desire to launch a cheaper streaming video service with a slimmed down TV lineup and robust on-demand options has flopped, because executives have no interest in bending to Apple’s way of thinking.

In 2009, Apple decided it wanted in on the streaming pay-TV business. At the same time Time Warner Cable began experimenting with data caps, Apple was approaching local stations and broadcast networks and offering them premium payments — higher than what the cable industry itself paid — for Apple’s choice of stations and cable networks. The deal meant Apple would alone be free to pick only the channels it wanted to carry, a major departure from the industry practice of contract renewals that bundled popular networks with spinoff and lesser-known channels cable operators didn’t want to carry. Apple’s hard-charging negotiator, Eddy Cue, seemed to believe that if Apple was at the negotiating table, that alone would be enough to get a deal done. It wasn’t.

Two years later, Time Warner Cable approached Apple seeking to launch a joint TV venture that could compete nationwide with satellite and phone company competitors. The talks were at the highest levels at both companies, involving Time Warner Cable’s then-CEO Glenn Britt, Cue, and Apple CEO Tim Cook. Cook also approached Brian Roberts, CEO of Comcast, promising him the service would only be sold through cable operators — good news for Comcast but bad news for open competition.

This time, Apple sought money from the cable companies, not the other way around. Cable operators were told they would need to pay $10 a month per subscriber to Apple, with no guarantee that fee would not increase in the future. Just as concerning was Apple’s insistence that subscriber authentication would require customers to use their Apple IDs, a departure from the cable industry’s push to adopt TV Everywhere, where customers could unlock streaming video from any cable network simply by logging in with the username and password they set up with their pay TV provider. Apple was also characteristically secretive about their user interface and left cable industry executives flummoxed when they asked Apple to sketch out what the service would look like on a napkin. An Apple official would only respond that their interface would be great and “better than anything you’ve ever had.” The fact Apple refused to answer the question did not go unnoticed.

Nor did Cue’s unconventional way of negotiating with some of the most powerful entertainment executives in the country. When Jeff Bewkes, CEO of Time Warner (Entertainment) agreed to meet with Cue about Apple licensing Time Warner’s critical networks — which include HBO, CNN, and TNT — Apple’s negotiator showed up 10 minutes late. While Time Warner’s negotiators were smartly dressed in business attire, Cue turned up wearing jeans, a Hawaiian shirt, and sneakers with no socks. It went downhill from there, because Apple insisted on valuable on-demand rights to full seasons of hit shows and permission to let viewers store their favorite recordings on a massive cloud-based DVR that included features like automatic recordings of hit shows and advanced ad-skipping technology.

Crickets.

More than a few programmers used to having their way with cable operators were shocked by Apple’s ‘arrogance’ and unconventional way of doing business. The newspaper reports one former Time Warner Cable executive watched with amusement as stone-faced programmers were unimpressed with Apple’s demands.

Jon Lovitz offers a visual hint what Mr. Cue must have looked like meeting with high-powered execs at Time Warner (Entertainment)

“[They] kept looking at the Apple guys like: ‘Do you have any idea how this industry works?'” said the former executive.

Apple responded ‘doing new things requires changes that often are unsettling.’

A year later the negotiations were on life support, as Apple struggled with the arrival of 2015 with no slimmed down streaming TV package to offer Apple TV owners.

Apple’s demands flew in the face of decades of cable industry business practices, which give channel owners virtual guarantees of rate hikes with each contract renewal, the right to force their spinoff networks on the cable lineup in return for a comfortable renewal process, and the cable industry’s right to an assurance everyone was getting the same kind of deal (except volume discounts). Any deviation from this would result in panic on Wall Street, as investors’ dependence on perpetually improving quarterly financial results based on revenue boosts from new or higher fees would come crashing down if a company like Apple got a better deal.

One industry insider suggested once a company like Apple got a deal on sweetheart terms, every other distributor would demand the same deal (and many have contract provisions that require it). Apple may have assumed that because it managed to get the recording industry to agree to its iTunes digital music distribution deal 15 years earlier, so the cable industry would go. Except the road to cut-throat deals for entertainment programming is littered with dead-end business plans that had to be quickly modified when the discounts ended.

Netflix and Starz both learned expensive lessons when early discounts on licensing deals ended after Hollywood saw how much money those companies made from streaming. When licensing contracts expired, entertainment companies sought massive increases in licensing fees to “fairly share” the proceeds. Netflix ended up walking away from several studios, seriously impacting their online streaming catalog. Eventually, Netflix decided if they cannot beat the studios, they should join them, creating original programming to attract and keep subscribers.

Cue in real life

After almost a decade spent trying to get into the online cable business, Apple now seems more likely to follow Netflix, Amazon, and Hulu, and devote time and money on developing its own original programming. Instead of trying to license and bundle network programming, Apple TV today supports independent apps created by various networks. Viewers still get to watch their favorite shows, Apple does not have to pay for streaming rights, and there is a joint effort to create and support a single login so viewers can get access to content without constantly re-entering usernames and passwords.

Apple’s original shows include “Planet of the Apps,” a reality series, a miniseries being developed by Dr. Dre, and a spinoff of CBS’ “Carpool Karaoke.” The shows serve a dual purpose — entertaining viewers and helping push sales in Apple’s App Store and streaming music service.

Also under consideration are big budget, critically acclaimed original shows and series that could generate positive buzz for Apple TV, like “House of Cards” has done for Netflix.

Developing programming keeps negotiators like Apple’s Mr. Cue from having to challenge a very profitable pay television industry on their terms and spares Apple from creating a cable package of linear TV channels subscribers increasingly don’t care about. Viewers want on-demand access to the shows they want to see and don’t care that much about who supplies them and how.

So in the end, the intransigence of Big Cable and Hollywood studios that are now worried about cord-cutting may have done Apple an enormous favor, sparing them from being entangled in a business that buys and sells channels to fill a bloated and expensive cable television lineup more and more consumers are now deciding they can do without.

Updated: Link to WSJ story corrected.

The Federal Communications Commission is getting an earful from satellite provider Dish Network, upset with the agency’s proposal to boost regulatory fees covering direct broadcast satellite services by 125% this year.

If the FCC adopts its new fee structure, Dish will pay 24 cents per subscriber (up from 12¢) per year to cover the cost of full-time employees at the FCC who spend their days monitoring and regulating satellite television providers. Satellite companies will also pay a one-time fee of 3¢ per subscriber in 2016 to cover the FCC’s downsizing expenses.

The regulator has successfully found a way to cover some of its expenses by charging the companies it oversees “user fees.” In 2015, the FCC collected nearly $340 million in regulatory fees. This year, the FCC wants more, seeking to impose a temporary “facility reduction cost” surcharge that will cover the expenses of moving employees to new, smaller offices, or downsizing the current ones to save money. The FCC says that will cost an extra $44 million. Taxpayers won’t pay those expenses, but pay television customers ultimately will when providers pass both of those fees on.

Dish says the rate hike is unjustified because of its size and scope, and runs contrary to the FCC’s goal of minimizing consumer bill shock. The satellite provider also wants the FCC to explain how it can justify more than doubling user fees while downsizing.

If the FCC doesn’t answer, the American Cable Association, representing small independent cable operators, is willing to share their views on the matter. The ACA complains the FCC isn’t charging DirecTV and Dish enough, noting they are still getting preferential treatment over cable and IPTV providers that are being asked to pay $1 per subscriber this year.

“There is absolutely no basis for keeping the proposed DBS fee levels over 75% below those proposed for other entities in the Cable/IPTV category,” wrote ACA president Matt Polka in comments to the FCC. “DBS providers should be paying the same Media Bureau regulatory fee.”

Polka pointed to AT&T’s acquisition of DirecTV as an example of how disproportionate fees cost small independent cable companies much more on a per-subscriber basis than telecom giant AT&T has to pay for almost 20 million DirecTV satellite customers.

“AT&T, now the nation’s largest [pay TV company], operates two types of services – its U-verse IPTV service and its DirecTV DBS service,” noted Polka. “Yet, AT&T will be assessed starkly lower regulatory fees for its approximately 20 million DirecTV subscribers than it will pay for its approximately 6 million IPTV subscribers, even though all of these services make absolutely comparable use of Media Bureau […]  resources and AT&T’s advocacy […] is on behalf of all its [pay TV] subscribers.”

Polka wants fee parity – charging the same user fees for all providers, regardless of the technology they use.

“Doing so will avoid the competitive distortions the current fee structure creates by having cable operators and IPTV providers, most of whom are far smaller than the DBS providers, cross-subsidize the fee burden of their primary and direct competitors in the marketplace,” Polka argued.

Whatever fee structure is ultimately approved by the FCC, customers can be certain providers will pad those fees when passing them on to customers. For more than a decade, some providers have used regulatory fee increases amounting to spare change as an excuse to pass on new “regulatory surcharges” that are many times more than what those providers actually pass on to the government.

“It’s a price increase,” bluntly notes Mark Cooper from the Consumer Federation of America back in 2004.

This spring, The Consumerist broke down a typical AT&T U-verse bill loaded in junk fees and surcharges. (The RED numbers [1, 4-10, 13-14, 17-20, 22] are AT&T-originated fees, fake surcharges/bill padding, or fees that represent the cost of doing business; BLUE numbers [2-3, 11-12, 15-16, 21, 23-25] are real government fees passed on to local, state, and federal taxing authorities.)

Perhaps not for long.

Time Warner Cable customers who spent hundreds or thousands of dollars in security equipment and add-ons may be left with nothing but their 18-month contract as Charter Communications considers pulling the plug on Time Warner’s IntelligentHome security service.

DSL Reports appears to have the exclusive story this morning that insiders familiar with the company’s business operations are claiming IntelligentHome may be one of the first casualties of the giant merger between Charter, Time Warner Cable, and Bright House.

As Stop the Cap! reported earlier this morning, Charter executives are performing a top-to-bottom analysis looking to wring cost savings out of the merger deal. The result will likely be the elimination of anything seen as duplicating Charter Spectrum’s own suite of products and services or going beyond Charter’s philosophy of focusing on “core services.” That could be bad news for Time Warner Cable employees managing or supporting non-conforming services as well, and at least some could be headed for the unemployment office.

A strong clue the days of IntelligentHome may be numbered is word employees are now supposed to keep it a secret:

While the source states that no formal shutdown of the service has been announced, sales and service employees are being told to no longer mention the service in call conversations or presentations with customers. The source also states that “rumblings by managers” suggests the service may not be long for this world.

Should Time Warner Cable shutter the service, the insider states that could be trouble for the customers that recently shelled out significant amounts of money for IntelligentHome hardware.

“What is particularly concerning is that many customers are in 18 month contracts and have purchased hundreds or even thousands of dollars in equipment,” states the insider.

If Time Warner does shutter the service, customers will likely be released from their contracts penalty-free, but they may also be stuck with useless equipment they can’t use with another alarm system.

Cable operators have dabbled in the home security business since the 1970s, but many early attempts were scrapped after waves of consolidation orphaned a variety of incompatible technologies with new owners that had little interest in maintaining the service. The insatiable quest for higher Average Revenue Per User (ARPU) has pushed the cable industry to find more ancillary services that could boost cable bills and keep Wall Street happy. They tried music services like Music Choice and DMX, home video game services, broadband for telecommuters, and eventually returned to home security.

Time Warner Cable first launched IntelligentHome in 2011. It immediately threatened traditional home security services from companies like ADT because IntelligentHome could manage easy remote access to control home security settings, lighting, and thermostats from a computer, tablet, or smartphone. Customers upgrading to a video-capable system could even stream camera video over the Internet through a live feed. A tablet-like touchscreen control enhanced the experience with access to current weather, news, and traffic.

Icontrol manages the software platform that powers Time Warner’s IntelligentHome, along with home security services offered by a number of other cable operators.

Time Warner Cable did not develop IntelligentHome exclusively in-house. Most large cable operators rely on connected home security system software solutions powered by a platform developed by Icontrol.

Charter Communications is one of only a few cable companies that have shown no interest in selling home security services (Cablevision is another). In 2013, it dismissed any interest in getting into the business, telling Reuters it preferred to concentrate on its “core business.” Nothing seems to have changed. As of this year, the only security protection Charter offers customers is antivirus software for their computers.

An exit from IntelligentHome could also have a major impact on Time Warner Cable’s owned-and-operated CSAA 5-Diamond Rated Emergency Response Center, which answers when it detects a break-in or when a customer hits a panic button.

Most estimates put the number of customers paying for IntelligentHome at less than 100,000 nationwide, but that select group is likely to have a substantial buy-in to the service and would definitely feel its loss.

Although Time Warner Cable advertises IntelligentHome at prices starting between $35-40 a month, that doesn’t afford much protection. Customer can choose between packages of different equipment bundles that range from $99.99 to $199.99. A la carte equipment is also available. A very basic entry-level system packages a tablet-like controller with protection for only two doors or windows and one motion detector. That might be suitable for an apartment, but homeowners often upgrade to cover more potential entry points. As a result, IntelligentHome has proven a tough sell for customers already confronted by cable bills that often approach or exceed $200 a month, before the alarm service is added.

Time Warner has attempted to change the marketing of IntelligentHome to emphasize more of its home automation and monitoring features, and routinely offers a $200 gift card to entice new customers. But it may not have worked enough to interest Charter, which shows every sign it wants to simplify the cable bundle, not clutter it up with extras. The insider told DSL Reports he hoped Charter would find a way to manage existing customers and not abandon them should the service be discontinued. If not, tens of thousands of Charter customers will have bought a lot of equipment with nothing to show for it.

DSL Reports stresses no final decision has been made.