Polly wants a $20K "stipend" for parroting the cable industry agenda.

Time Warner Cable is back again for the third year offering $20,000 in “dollar-a-holler” money to write “research reports” that meet the cable operator’s wish-list of current topics of interest.  While the cable company raises rates on customers, some of the proceeds pay for the Time Warner Cable Research Program on Digital Communications, which they say “awards stipends designed to foster research dedicated to increasing understanding of the benefits and challenges facing digital technologies in the home, office, classroom and community.”

After tearing through some of the earlier “award-winning” reports and topics over the past three years, we find it more an exercise in wasted cheerleading money, particularly when some of the authors happen to work for PR astroturf operations and other industry-connected/funded “think-tanks” that take money for dubious research and public statements that amplify the paymaster’s agenda.

It’s not much of a stretch to figure out exactly what kind of submissions the cable company is looking for after reviewing the topic list.  It’s a safe bet nothing we’d have to say to Time Warner would get them to cut us a check for $20K.  In case there is any doubt, we’ve provided a helpful “between-the-lines” analysis of what they are really looking for, should you wish to put pen to paper:

(1) The end-user experience for broadband services
In an increasingly competitive marketplace, more attention is being paid to the consumer experience. For service providers, it is essential to make it simpler and easier for customers to enjoy the benefits of broadband any time, any place, on any device. Key questions include identifying service characteristics consumers consider in evaluating broadband performance, the role of accessibility in design and engineering, how best to encourage innovation in services and business models, the role of pricing and packaging of services, and how best to meet the needs of diverse communities.

(Between the lines: how can we justify Internet Overcharging customers with usage caps and usage billing and make it sound all-consumery and good-newsy?)

(3) Internet governance
Internet governance is still largely framed by the way the Internet existed when it first became a mass-market phenomenon in the late 1990s. But more users rely on advanced digital communications for a diverse set of uses today. Networks and devices are more varied and more powerful than expected, and the Internet now supports a vast range of business models and drives economic growth . In this environment, the role of government and other intermediaries in framing and addressing policy goals continues to change. Key questions include examining the need for new methods of collaboration in multi-stakeholder processes, examining the role of standard-setting, how to measure and assess the performance of the broadband Internet, developing metrics that are meaningful to a wide range of stakeholders (from industry and policymakers to consumers), how to develop new forms of governance that convene stakeholders to solve problems cooperatively, and how to develop guidelines that protect settled expectations as well as enable continuing entry and innovation.

(Between the lines: This whole “open platform” free-for-all network the Internet was originally envisioned to be is so yesterday.  How can we convert it into a corporate-controlled playground by convincing legislators our ‘investments’ in it should justify our ability to “coordinate” it ((a/k/a run, manage, and control)) as we see fit.)

(5) Video Convergence and Internet Video
Online video is growing rapidly, comprising an increasing proportion of Internet traffic even as workable business models continue to evolve. Internet video thus increasingly competes with more traditional video services, while at the same time placing extraordinary burdens on the broadband networks owned and operated by those competitors. This emerging development raises a host of issues for video competition and regulation as well as for broadband policy. Key questions include how to identify and respond to the challenges posed by Internet delivery of video, and identifying the marketplace, legal, and policy barriers that stand in the way of innovation in video service delivery.

(Between the lines: Since we can’t blame peer to peer traffic for the Internet ‘exaflood’ any longer, we’ve designated online video the new Frankenstein that threatens to run our broadband network into the ground.  How can we stop Internet video from cannibalizing our cable-TV service by limiting access (or charging a bountiful harvest of cash to those who dare to watch too much.) Bonus: Include tips on how we can obfuscate our tissue-paper-thin agenda to slap the caps on from being called out as an abuse of our market power.

North America’s broadband rankings continue to take a beating at the expense of countries deploying fiber optic broadband.  While the United States and Canada cope with aging landline technology and an uncompetitive marketplace that tells consumers they don’t need fiber-fast broadband speed, countries like Bulgaria, Lithuania and Estonia are lighting up 50-100Mbps networks that often charge lower prices than North Americans pay for 1-3Mbps DSL.

Ookla, a global leader in broadband testing and web-based network diagnostic applications, reports that the best performing broadband networks for speed, value, and performance are increasingly in Europe and Asia.  While both the United States and Canada used to be among the world leaders in broadband infrastructure, that is no longer true.

Some examples:

• The United States now scores 31st in average download speed, Canada is 33rd;
• In upload speed, America now ranks 37th, Canada a woeful 69th;
• Ookla’s Household Quality Index, which ranks packet loss and general reliability of home connections found Canada scoring 27th place, the United States 38th;
• At a cost per megabit, neither the US or Canada offers very good value.  The USA ranked 29th ($4.95 per megabit), Canada 33rd ($5.85 per megabit);
• Neither country does a great job delivering the speeds and service promised either.  The USA ranked 25th, Canada 32nd.

Ookla found that while speeds are rising in North America, they are not increasing nearly as fast as in other, higher-ranked countries.  Most of the speed gains in North America come from cable or limited fiber-broadband deployments like Verizon FiOS or community-owned fiber to the home networks.  Wireline ADSL service, which represented a larger proportion of home Internet connections in 2008, continues to lose ground to faster options from cable companies, community-owned broadband, and phone company fiber upgrades.  In eastern Europe, the Baltics, Russia and Ukraine, many of the dramatic boosts in broadband speed and quality come as a result of national fiber network upgrade projects.

While speeds in North America are gradually increasing, both the U.S. and Canada are being outpaced by many countries in Europe and Asia.

While providers in the United States and Canada often dismiss fiber as too costly, Ookla found fiber-based networks delivering some of the world’s best values in broadband.

For example, on a cost-per-megabit basis, Bulgaria’s new fiber networks deliver the world’s cheapest Internet service, at an average of just $0.64 per megabit.  The average broadband speeds in the country are now higher than 21/11Mbps.

Elion headquarters in Tallinn. Elion delivers fiber broadband to homes across Estonia.

Contrast that with average speeds in the United States (12.41/2.97Mbps) and Canada (11.95/1.70Mbps).  Other top scoring countries for cost-per-megabit include:

• Romania $0.97 USD
• Lithuania $1.11 USD
• Ukraine $1.17 USD
• Republic of Moldova $1.41 USD
• Latvia $1.80 USD
• Hungary $2.00 USD
• Slovakia $2.04 USD
• Hong Kong $2.26 USD
• Russia $2.51 USD

In terms of download speed, Estonia’s investment in a national fiber network is now paying dividends, with a dramatic increase in national average broadband speeds to 50/28Mbps.  As new cities join Estonia’s fiber network, speeds take a dramatic upswing.  Contrast average speeds in Saue (101.03Mbps), Viimsi (98.98Mbps), Tallinn (69.80Mbps), and Võru (65.58Mbps) with ADSL-rich Pärnu (12.55Mbps), Paide (12.40Mbps), Rapla (8.93Mbps), and Valga (7.71Mbps).

It is much the same story in other fiber-rich countries, where broadband speeds far exceed the averages in the United States and Canada:

Look what happens to Estonia's broadband speed rankings when it switched on its national fiber broadband network.

• Lithuania 31.65 Mbps
• South Korea 31.44 Mbps
• Latvia 25.42 Mbps
• Sweden 24.62 Mbps
• Romania 24.47 Mbps
• Netherlands 24.36 Mbps
• Singapore 22.94 Mbps
• Bulgaria 21.12 Mbps
• Iceland 20.53 Mbps

Despite all of the bad news, the cable industry’s trade publication Multichannel News tried to find victory in the jaws of defeat, noting things could be worse… if they ran traditional phone companies.

Cable operators delivered the fastest average broadband download speeds in 2011 — with major MSOs easily blasting by rival telco and satellite Internet services — according to data from independent testing firm Ookla.

For the full year, the six fastest residential Internet service providers in the U.S. based on average download speed were Comcast, Charter Communications, Cablevision Systems, Time Warner Cable and Insight Communications.

[…] Comcast and Charter delivered average download speeds of 17.19 Megabits per second, followed by Cablevision at 16.40 Mbps, Cox at 15.76 Mbps, TWC at 14.41 Mbps and Insight at 14.22 Mbps.

Verizon Communications fared better than its telco peers with an average download speed of 12.94 Mbps, thanks to FiOS Internet, its fiber-to-the-home service that provides up to 150 Mbps downstream. And overall, Verizon had the highest upstream speeds with an average of 7.41 Mbps. Still, the company’s legacy DSL services dragged down overall speeds.

Behind DSL were woefully slower speeds from the nation’s wireless ISPs (which include 3G broadband from large companies like Verizon Wireless and AT&T), and perennially last place satellite Internet.

Moffett

Despite repeated claims by providers that consumers don’t need fiber-fast broadband speeds, industry analyst Craig Moffett at Sanford Bernstein tells a different story:

“Technology adoption is creating a feedback loop that increasingly favors cable’s physical infrastructure,” Moffett wrote in a research note last month. “As more people are served by higher-speed connections, more and more applications are evolving to take advantage of them. Customers with lower-speed connections are increasingly being forced to upgrade to higher speed connections… or be left behind.”

The conclusion reached by Multichannel News columnist Todd Spangler:

“The relative broadband speeds of cable vs. telco isn’t merely an academic curiosity: Major providers are increasingly touting Internet performance in their marketing as they fight for consumers’ dollars.”

Unfortunately for the cable industry, although DOCSIS 3 upgrades have afforded dramatic increases in broadband download speeds, upload speeds lag behind.  Fiber to the home networks are best positioned to achieve victory in the global broadband race.  That is important not only because it delivers consumer dollars to the best provider in town, but fuels the further development of the digital, knowledge-based economy North America increasingly seeks to lead.

McDowell

Republican FCC Commissioner Robert McDowell is questioning whether Comcast misled the federal agency when the cable company acquired wireless spectrum it now says it had no intention of ever using.

McDowell was reacting to Comcast chief financial officer Michael Angelakis, who admitted this week his company really never had any interest in competing in the wireless space.

“Were they purchased under false pretenses?” McDowell asked.

Comcast has since sold their acquired spectrum to Verizon Wireless, which in Angelakis’ view makes sense.

“We never really intended to build that spectrum, so therefore it’s a really good use of that spectrum,” Angelakis said.

That admission puts Comcast in a difficult position, because FCC rules mandate that companies acquiring scarce wireless spectrum make a good faith effort to use it.  In McDowell’s view, had Comcast never intended to put the frequencies to use, the FCC probably would have disallowed the acquisition.

Verizon Wireless also plans to pick up unused spectrum originally acquired by Time Warner Cable in a deal that would let both companies cross-promote cable and wireless products and avoid head-on competition.

Both Comcast and Time Warner Cable have warehoused unused spectrum for several years.  Neither company appeared serious about building competing wireless networks, and with the spectrum off the market, would-be competitors couldn’t launch service either.

Verizon agreed to pay $3.6 billion to acquire the cable industry-owned spectrum, which it intends to use to bolster its LTE 4G network.

The FCC is now seeking public input on whether it should approve the spectrum sale. The Justice Department is also considering its antitrust implications.

When Massena, N.Y. town supervisor Joseph D. Gray balked at Time Warner Cable’s demands for a 15-year franchise renewal agreement, especially after the cable company never bothered to show up at a hearing on the subject, he thought he could send a message by supporting a renewal expiring after just one year.

But there was a reason Time Warner never bothered to show up to defend their performance in northern New York State over the last decade of increasing rates and unwanted channels shoveled at subscribers — they did really have to answer to local officials.

Gray assumed playing some hardball with the cable company might get their attention and bring them to the table to discuss the demands of local Massena residents he hears from all the time.  At the top of the list is a-la-carte cable — paying only for channels you want.

No deal.

Gray

Mr. Gray has since admitted in conversations with the Watertown Daily Times he is frustrated by the town’s inability to effect “any real change.”

This despite the state cable franchise law which declares communities have the right to establish and negotiate “cable-related community needs” as part of the final contract with cable operators.

In fact, the cable industry has spent millions lobbying federal and state governments to deregulate their operations, even though most communities are served by just one cable operator.  While phone companies have made limited progress competing in larger urban areas, most of upstate New York is left choosing between a satellite provider or a cable company — usually Time Warner Cable.

That lobbying paid off in the 1990s when the federal government swept away considerable government oversight of cable operations.  While municipalities technically still control the basic franchising process, those dissatisfied with service from an existing provider rarely find other companies willing to take over.  That leaves Massena stuck with Time Warner Cable, who isn’t giving an inch on how they package their programming.

“We can make some gains for the community. Can we get free service for a couple of municipal buildings? Probably,” Mr. Gray told the newspaper. “They continue to say there’s nothing they can do about programming, there’s nothing they can do about bundling.  That’s from the programmer.  Until we get … a la carte, where people get the channels they want, we’re never going to satisfy people.”

Time Warner Cable customers in southern California face substantial rate increases in 2012, including a budget-busting $49.99 service call fee to install increasingly expensive cable service.

The bad news is arriving in customer bills this month, with substantial price hikes for cable television —  including a 27.4% increase for the package that only includes local broadcast channels.  Time Warner Cable blames increasing programming costs for the rate increases, which are several times higher than the official rate of inflation — 3.5%.  Most customers with bundled television, telephone, and Internet service will see a smaller increase on the magnitude of a few dollars, but for those picking and choosing only a few items from Time Warner’s menu, the price tag for individual services will be higher.

The largest rate increase comes when the cable company sends a truck to a home or business.  Time Warner was charging $32.99, but will now charge $49.99 — a 51.5% increase.  The cable company has also been pushing its home networking Wi-Fi option, and will now charge $69.99 to install it, up from $49.99.

Time Warner Cable spokesman Jim Gordon tells the Los Angeles Times not everyone will pay those prices.  Certain promotions may lower those rates, or waive them altogether.  But the company offered little explanation to justify such a major price hike.

One of the cable company’s competitors, DirecTV, scoffed at Time Warner’s rate increase, noting the satellite company only raised prices an average of 4% earlier this year, and anticipates a similar increase in 2012.

The effect of the latest round of rate hikes is likely to drive even more customers to cancel or cut back on cable services.  An increasing number are dropping cable television service altogether, relying on broadband for video entertainment.  The cable industry’s response to cord-cutting has been a combination of increased online viewing options for cable-TV customers and usage caps and overlimit fees on broadband that either discourage online viewing or attempts to profit from it.  Time Warner Cable executives said as recently as December they plan to eventually introduce “usage based billing” of Internet service “the right way rather than quickly.”