Even as DOCSIS 3 cable technology continues to roll-out across cable systems now offering faster Internet speeds, the next generation of cable broadband is on the way, reportedly capable of delivering up to 10/2Gbps service.

CableLabs’ DOCSIS 3.1 project will be the subject of a special panel at an upcoming cable engineer conference later this month.

“DOCSIS 3.1 specification development is a significant milestone on the industry’s road map to next-generation services,” said CableLabs chief technology officer Ralph Brown. “Our SCTE Cable-Tec Expo panel will identify the motivations, requirements and key technology building blocks under development with the collaboration of the vendor community.  DOCSIS 3.1 solutions will provide both residential and commercial cable customers with faster data rates — both upstream and downstream — that support increasingly compelling broadband services.”

The DOCSIS 3 standard allows cable operators to bond multiple channels to support faster speeds.

The new standard will incorporate changes in how cable spectrum is utilized for broadband, vastly expanding potential bandwidth. Although the standard can support gigabit broadband speeds, nobody expects cable companies to offer those speeds in the near term.

Instead, providers are more interested in addressing their upstream speed limitations. From the earliest days of cable broadband, the assumption was that customers would care far more about downstream speeds and consider uploading an afterthought. The result was a network that prioritized download speed. But as users continue to upload more multimedia content and embrace cloud storage, slow upload speeds are starting to aggravate customers.

DOCSIS 3.1 is rumored to de-emphasize the current QAM modulation cable operators use for broadband in favor of more robust technologies such as orthogonal frequency-division multiplexing (OFDM), already used by the wireless industry. Unlike interference/noise-prone QAM, OFDM uses much smaller subcarriers that work better in noisy signal conditions. Although coaxial cable is capable of delivering a large amount of spectrum to cable operators, all of it cannot be practically used because of external interference from electrical equipment, broadcast radio and television signals, and other sources. Error-correcting technologies can let operators use more of their available spectrum without reducing the quality of service to customers.

The study group working on DOCSIS 3.1 is also reviewing the incorporation of “low density parity-check” (LDPC) error correction that would efficiently improve noise rejection over today’s Reed-Solomon approach. Combining OFDM and LDPC could improve spectral efficiency up to 25 percent.

The cable industry is pressuring the study group to preserve backwards compatibility with the older DOCSIS 3.0 standard just now coming into widespread use. Some industry insiders predict cable operators will keep today’s QAM modulation for downstream speeds while boosting upstream speeds using OFDM.

Cable operators across the country are gradually moving away from analog service in favor of digital with the ultimate goal of an entirely IP-based network for television, phone, and broadband. The pressure is on for DOCSIS 3.1 to help accelerate that transformation, but most industry experts don’t believe the new standard will be finalized until at least the middle of 2013, with at least 6-12 months before equipment shows up supporting the finalized standard.

Phillip “Tollbooths are not innovation” Dampier

Federal Communications Commission chairman Julius Genachowski last week wrote a guest editorial on TechCrunch espousing the benefits of faster broadband networks, but the advances he celebrates often come with innovation-killing usage caps and overlimit fees he continues to ignore.

We feel the need – the need for speed. As Tom Friedman and others have written, in this flat global economy a strategic bandwidth advantage will help keep the U.S. as the home and most desired destination for the world’s greatest innovators and entrepreneurs.

[…] But progress isn’t victory, particularly in this fast-moving sector. Challenges to U.S. leadership are real. This is a time to press harder on the gas pedal, not let up. The first challenge is the need for faster and more accessible broadband networks. We need to keep pushing because our global competitors aren’t slowing down. I’ve met with senior government officials and business leaders from every continent, and every one of them is focused on the broadband opportunity. If we in the U.S. don’t foster major investments to extend and expand our broadband infrastructure, somebody else will take the lead.

We need to keep pushing because innovators need next-generation bandwidth for next-generation innovations – genetic sequencing for cancer patients, immersive and creative software to help children learn, ways for small businesses to take advantage of Big Data, and speed- and capacity-heavy innovations we can’t yet imagine.

We need to remove bandwidth as a constraint on our innovators and entrepreneurs. In addition to steadily increasing broadband speed and capacity for consumers and businesses throughout the country, we need – as we said in our National Broadband Plan – “innovation hubs” with super-fast broadband, with speed measured in gigabits, not megabits.

[…]Some argue the private sector will solve these challenges itself, and that all government has to do is get out of the way. I disagree. The private sector must take the lead, but the public sector has a vital though limited role to play.

Among the policy levers government needs to use is the removal of barriers to broadband buildout, lowering the costs of infrastructure deployment with new policies like “Dig Once” that says you should lay fiber when you dig up roads. The President recently issued an Executive Order implementing this idea, suggested in our Broadband Plan. Government must promote competition, which drives innovation and network upgrades.

We must ensure the Internet remains an open platform that continues to enable innovation without permission.

Genachowski

Genachowski’s vision for faster broadband has the noble goal of maintaining competitiveness with the rest of the world and putting the United States back on top in broadband rankings and innovation. But while hobnobbing with his industry friends at recent industry conventions, he may have gotten too close to one of the biggest impediments holding us back — big cable and phone companies merrily working their magic to create a comfortable duopoly with pricing and service plans to match.

Back in the late 1990s, most cable operators thought of broadband as an ancillary service easy enough to operate, but probably hard to monetize. Just like digital cable radio services like Music Choice and DMX, “broadband” would likely appeal only to a tiny subset of customers.

“Back in the 1990s, Time Warner was primarily a TV company in a TV industry.  Broadband then was an innovating and radical thing, and a lot of people thought it was stupid and wouldn’t work,” Time Warner Cable CEO Glenn Britt said in April, 2009.

The launch of “Road Runner” was not the most auspicious marketing effort undertaken by the cable operator. In fact, the service was rarely targeted for price adjustments, hovering at around $40 a month for a decade.

When the Great Recession hit the United States, something unexpected happened. Cable operators discovered people were willing to cancel their cable and phone services, but not their broadband. In fact, as high bandwidth online video became an increasing part of our lives, the cable industry realized they were in the catbird seat to deliver the best broadband experience, and be well-paid for it. With little competition, increasing prices brought little risk and, thanks to the insatiable drive to boost revenue and reduce costs, implementing usage caps to control “excess” usage and costs were within their grasp.

In 2008, when Stop the Cap! launched, only a handful of ISPs had usage caps. Now most providers, with the exception of Time Warner Cable, Verizon, Cablevision, and a handful of others, all have usage allowances and overlimit fee Internet Overcharging schemes to further pad their bottom lines.

Innovation: Rationing Your Internet Experience — Stick to e-mail and web pages.

Genachowski has completely ignored the growing pervasiveness of usage caps, and even excused them as an experiment in marketplace innovation. But limits on broadband usage will also limit the broadband innovation revolution he wants, especially when most Americans have just one or two realistic choices for broadband service:

1. Usage caps are the product of artificial scarcity. Rationing Internet usage, even with now-pervasive cost-effective upgrades like DOCSIS 3, simply does not make sense (but it will make dollars). Cable operators are switching off analog television service to free up bandwidth to provider faster Internet speed and fatten the pipeline that delivers it. They have plenty of capacity, but continue to proclaim they must limit usage for “fairness” reasons, without providing a single shred of evidence to prove the need for usage caps. Consumers will self-ration just to avoid the prospect of being cut off or handed a bill with overlimit fees.
2. Usage caps make faster speeds irrelevant. Selling customers premium-priced, super fast broadband speed is hardly compelling when accompanied by usage caps that constrain the benefits of buying. Why pay $20-50 more for faster speeds when customers cannot take practical advantage of them. Customers using their Internet service to browse web pages and read e-mail have no interest in upgrading to 30+Mbps. Customers streaming video or moving large files do.
3. Usage caps retard innovation. Google’s new 1Gbps fiber optic network was built on the premise that usage caps were unnecessary on a fiber-based network and would retard innovation. Developing the next generation of innovative apps that Genachowski celebrates will never happen if developers are discouraged by Internet usage toll booths and stop signs. The cost to provide the service is not largely dependent on customer usage. It is the initial price of last mile infrastructure that really matters. Both cable and phone companies have reduced their investments to upgrade their networks, and AT&T and Verizon both contemplate getting rid of their rural landlines. Most cable operators paid off their networks years ago.
4. Usage caps create a whole new digital divide.  Time Warner Cable’s discounted Internet Essentials program delivers only a $5 discount with a harsh 5GB usage cap. For an income-challenged home compelled to switch to a provider’s budget plan, the result is a different Internet experience than the rest of us enjoy. Imagine if your home broadband account was limited to 5GB a month. What online services would you have to avoid to stay under the provider’s limit? Traditionally, operators sell the lowest speed tiers with the lowest usage allowances. Slower speeds already offer a disincentive to use high bandwidth services, but many providers typically drive that disincentive home even harder with a paltry allowance that will cost plenty to exceed.
5. Usage caps harm our broadband standing. While Genachowski celebrates increasing broadband speeds, he ignores the fact the rest of the world is moving away from usage caps even as the United States moves towards them. Both Australia and New Zealand elected to construct their own national fiber networks in large part because the heavily usage-capped experience was holding both countries back. Usage caps are a product of a barely competitive market.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bandwidth Caps 7-2011.flv[/flv]

Tech News Today debunks providers’ claims that usage caps are fair and control those who “overuse” their networks, noting the same phone companies (AT&T) pushing for usage caps are also moving voice calling to unlimited service plans. (August, 2011) (4 minutes)

The CWA’s Verizon-Cable Company Deal Monster

While Verizon customers in more than two dozen towns and communities around Boston can enjoy fiber optic broadband service today, residents inside the city of Boston cannot buy the service at any price. It is largely the same story in Syracuse, Buffalo, and Albany, N.Y., and Baltimore, Md.

With Verizon’s fiber network FiOS indefinitely stalled, local community leaders and union workers are more than a little concerned that Verizon is spending time, money and attention promoting a deal with the cable industry — its biggest competitor.

The Communications Workers of America is stepping up its protest of a proposed deal between Verizon’s wireless division and large cable operators including Comcast and Time Warner Cable that would result in cross-marketing agreements that sell cable service to Verizon Wireless customers and wireless service to cable customers.

The union is urging the Federal Trade Commission and the Federal Communications Commission to stop the deal because, in their view, it will destroy any further expansion of fiber optic-based FiOS, reduce competition, and raise prices for consumers.

The union notes that cable operators are not being asked to promote Verizon’s FiOS network, only Verizon Wireless’ phone services. Verizon Wireless, which barely mentions FiOS service in many of its wireless stores, would suddenly be promoting Comcast and Time Warner Cable instead.

The odd-network-out is clearly Verizon’s fiber optic FiOS service, which was originally envisioned as a competitor against dominant cable operators. But when the economy tanked, Verizon stalled fiber deployment, agreeing only to wire areas where the company already concluded negotiations with local officials. That leaves urban population centers in the northeast (except New York City) stuck with the cable company or Verizon’s DSL service, which has been become increasingly difficult to buy.

Verizon countered the deal would be good for consumers, especially those buying cable packages.

“We believe these agreements will enhance competition, allowing Verizon Wireless to take market shares from other wireless companies, while allowing cable companies to more vigorously compete by enabling them to offer wireless services as part of a triple or quad-play package of services,” the company said in a statement.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CWA TV Ad Behind Closed Doors.flv[/flv]

The Communications Workers of America launched this new ad — “Behind Closed Doors” — last week in Washington, D.C., Virginia, and Pennsylvania media markets. (1 minute)

But union workers in FiOS-bypassed communities like Binghamton, N.Y. suggest customers will simply be on the short end of Verizon’s stick. They note the nearest city where Verizon is deploying fiber optics is suburban Syracuse — more than 70 miles to the north.

BALTIMORE: Left behind as FiOS spreads to six surrounding counties

BOSTON: No Internet revolution

ALBANY: The Empire State’s capital city has no FiOS

BUFFALO: Hit hard by the digital divide

SYRACUSE: Surrounded by high speed—but none for the city

[flv width=”580″ height=”380″]http://www.phillipdampier.com/video/WBNG Binghamton Union Fights Verizon Deal 8-8-12.mp4[/flv]

WBNG reported on a CWA-sponsored protest against Verizon’s deal with cable companies in FiOS-deprived Binghamton, N.Y.  (1 minute)

The views of the Adam Smith Institute, despite the near-global financial meltdown engineered by the Masters of the Universe.

Forbes columnist Tim Worstall is unimpressed with Google’s foray into fiber optics.

Worstall, a Fellow at the Adam Smith Institute in London, has repeatedly penned columns tsk-tsking the global broadband speed race.

In his world view, nobody except certain specialists needs any connection faster than 2Mbps:

The most obvious being that outside certain very specific uses (video editing for example, where people can pay up for their own T1 line) there’s not really much evidence that speeds above 2 Mbps or so actually improve productivity or economic performance/growth. Sure, they’re great for consumers who want to download movies but that’s not really a justification for a large scale infrastructure program.

Worstall’s Luddite-like knowledge of broadband technology makes it difficult to take him seriously. Notwithstanding the fact a T1 line delivers just 1.5Mbps (at a cost several times a typical cable or DSL broadband connection), Worstall’s declaration that faster speeds are only good for “downloading” movies (the concept of streaming also escapes him) is simple nonsense.

Worstall’s tantrum is really part of a bigger discussion about how to do broadband better in both the United Kingdom and the United States. Incumbent providers are dragging their feet while reaping profits for overpriced, too-slow service. Consumers and businesses are fed up, and some are now increasingly turning to the government to do-something to shake up the status quo.

Government? For those slavishly devoted to free market ideals at the Adam Smith Institute, such a notion guarantees an intemperate outburst with phrases like “government takeover,” “government interference in private business,” or “government monopoly” — all ideas Worstall complains are “blindingly awful.”

“The idea that the solution to anything is a government run engineering monopoly just boggles the mind,” Worstall declares.

In his piece, “Why High Speed Broadband Just Doesn’t Matter,” Worstall has just a single litmus test to define broadband worthiness: how much economic value can be extracted from the Internet — Ferengi economics at their finest.

Worstall (Image: Forbes)

Worstall:

So more people can watch TV. Apologies, but this doesn’t really convince. Higher definition TV just isn’t the sort of technology that boosts the economy of a country. It might be nice to have but it most certainly does not justify taxing some to provide the service to others.

[…] The truth is that as long as you’re getting broadband of a kind (2 Mbps say) then it’s possible to extract that economic value. Faster speeds might be nice but they’re just not necessary for economic development.

Even if you accept Worstall’s inaccurate contention fast Internet is only good for watching online entertainment, he evidently forgets PricewaterhouseCoopers estimated the value of that industry at $2 trillion, and that was by 2011. Why even have a cable television business, if the only thing it is good for is watching reality shows and Law & Order reruns? Because it makes money — lots of it.

Back to Google, which is creating a bit of a pickle for the cable and phone companies — an increasingly fat and happy bunch earning easy profits selling broadband at duopoly market prices. Proponents for better broadband advocating for new, publicly-owned broadband networks have had to confront astroturf and conservative groups using popular memes that “big government” cannot do anything right and if there was a market for gigabit broadband, private companies would already be selling it.

Starting this summer, Google is.

That spells t-r-o-u-b-l-e for the corporate love muffins at the Adam Smith Institute and their industry friends who are quite happy with the way things are today, thank you very much. Google just happens to be an example of a free market success story — a ‘responsible’ company willing to invest money in the game-changing broadband Worstall and friends spent years arguing we don’t actually want or need.

As Kansas City residents line up around the virtual block, eagerly plunking down $10 to “pre-register” for Google service, it becomes difficult to continue the standard line that super-fast Internet is just a tech-geek curiosity.

So what does a free-market-knows-best-devotee do in light of all this? Change the story.

Worstall picks up a premise first offered by The Guardian and runs with it. Namely, Google is actually riding the wave of past phone company failures to cheaply benefit from assets those companies deployed first:

There’s a very large difference between being able to do something usefully experimental with an orphaned asset and having to pay for the construction of that asset in the first place. The telecoms companies lost fortunes on laying that fibre (indeed, several, including such as Global Crossing, went resoundingly bust for billions in doing so). That something that was built for $100 can find a use when it is sold for $1 (just to make up some numbers) is not an argument in favour of spending the $100.

Yet that is exactly what the argument being proposed is. Look, Google’s got really cool fast broadband, now we should build it for everyone! What’s being missed is that, at least so far as we know as yet, that really fast broadband isn’t worth the cost of building it. It only makes sense even for Google because they’ve not had to pay full price for it.

Google got a discount, so that is why they are in the business.

Worstall’s declaration is news to Kansas City, which has been enduring Google’s construction crews for months as they lay fiber infrastructure across the metropolitan area. Evidently Google hired illusionist David Copperfield to perform the masterful trick of shading the truth:  re-purposing already-there fiber while pretending it was being buried and strung for the first time.

Adam Smith didn’t have super fast broadband when he posited his views on unfettered free markets in the 1700s. If his devoted followers are left in charge, you won’t either.

Susan Crawford points us to this fun fact: While the cable industry wants to raise your prices to cover increased costs, one of the things they forgot to mention is more than $8,900,000 (so far this year) of your money was shipped straight to Washington to hand out to lawmakers. In the last quarter alone, the National Cable & Telecommunications Association has spent more than $4.5 million lobbying Washington on everything from repealing the Dodd-Frank Wall Street Reform and Consumer Protection Act to the Internet Freedom Act. If consumers are for it, the NCTA is against it. The ironic part of it is they put your money to work against your interests.

Imagine what you could do with $8.9 million — bringing broadband to the unserved, making service better for those who already have it, and keeping your broadband bill in check. Just sayin’.