CenturyLink wants to repeal a 1993 Idaho rule that requires phone companies to repair service outages within 24 hours or provide one month of service for customers at no charge.

The phone company is lobbying the state Public Utilities Commission to be exempted from the rule that its predecessor Qwest/US West lived under for nearly 20 years. (CenturyLink acquired Qwest.)

CenturyLink says consumers no longer need their phone lines repaired in such a short time, and the company says the rule in hurting their business.

A "temporary" phone cable installed along the top of a wire fence.

“Today, a substantial majority of basic local service customers are not cut off from communication and are not out-of-service in the event their wireline telephone is not working,” the company argued.

Besides, CenturyLink claims, wireless providers are not subject to the same rule, giving them an unfair competitive advantage.

CenturyLink already has a repair exemption for customers who experience service outages due to a natural disaster, during the weekend, or one caused by the customer’s own actions. But now the company wants more, telling the commission most people will simply switch to cell phones while their landline remains out of service.

Despite the apparent contradiction that delivering reduced service is better for consumers, the PUC has been negotiating a compromise, offering to eliminate the service credit requirement and extend the window for repairs to 48 hours.

Before they do, they might want to review CenturyLink’s performance in Arizona, where the company has been caught installing repaired phone lines in pavement cracks and atop public roadways.

The PUC staff questioned claims made by both CenturyLink and Frontier Communications, another phone company that supports the repeal of the repair rules.

“CenturyLink argues that a large percentage of customers now have access to wireless and broadband voice services,” the staff report says. “For CenturyLink’s legacy Qwest customers located in urban areas, this may be true. It may not be true for customers in the very rual parts of CenturyLink’s service territory. When wireline service fails, few, if any, alternative communication services are available in some rural areas.”

The PUC staff also argued the impact on small business in Idaho could be significant. Small businesses still rely overwhelmingly on traditional landline services to conduct business and process credit card payments. Prolonged outages could create significant economic harm for affected customers.

The commission is taking comments on the proposed settlement of Case # CEN-T-12-01 through May 31.

[flv]http://www.phillipdampier.com/video/CNBC FCC Chairman on Spectrum Crunch TV Everywhere 5-22-12.flv[/flv]

FCC Chariman Julius Genachowski spent the day hobnobbing with cable industry executives at the Boston Cable Show. In an interview with CNBC, Genachowski defended usage-based pricing, claiming it will bring lower prices to light users, spur “innovation” and enable consumer choice. Verizon Wireless customers on the cusp of being thrown off their grandfathered unlimited data plans may have a bone to pick with the FCC chairman about how innovative and enabling such policies have on them. Genachowski also suggests his controversial Net Neutrality policy is working, despite recent attempts by Comcast to exempt its content from the company’s usage cap and the wireless industry toying with toll-free data for preferred partners. Genachowski had little to offer consumers in the interview, instead suggesting his deregulatory stance on “innovation” will eventually benefit them.  (5 minutes)

An innovative plan to rent New Yorkers a dime-sized over-the-air antenna housed in a Brooklyn data center to receive and stream local broadcasters could be the end of broadcast TV as we know it, at least if you believe the claims being made by network executives in their high-powered lawsuit.

Aereo, which charges $12 a month to an invitation-only customer base, is the target of serious legal action brought by the major broadcast networks and local TV stations that believe Aereo’s disruptive business model could allow cable operators to avoid paying retransmission consent fees for free, over the air television signals.

Aereo only streams local broadcasters in the New York metropolitan area to residents within viewing range of the signals. The company argues it operates legally because of a time-tested, sound legal principle: the Communications Act of 1934, which offers broadcasters a license to use the public airwaves in return for operating in the public interest. Aereo only rents its tiny antennas to one customer at a time, and provides them with streamed video received by that antenna. The company charges a nominal monthly fee to cover the costs of operating its data center and to cover streaming expenses.

The monthly subscription fee grants viewers access to watch one channel while recording another on a cloud-based DVR “storage locker.” Viewers can watch the signals on just about any device, as long as they are located within the New York metropolitan area. Travelers and those who live outside of the area cannot watch programming or subscribe to the service.

The threat to the nation’s pay television operators and broadcasters is obvious. Over the air television broadcasters increasingly rely on so-called “retransmission consent payments” collected from pay television operators in return for permission to place their signals on the cable, telco, or satellite TV dial. Broadcasters bank on that growing revenue. Pay television providers grudgingly agree to the payments and promptly pass them on to already rate-increase-weary subscribers, who want a way out of paying for hundreds of channels they don’t care to watch.

Aereo's over the air antenna is about the size of a dime.

Aereo breaks the business models of both broadcasters and the cable industry. Cord cutters can get reliable and cheap reception of over-the-air stations without dealing with cumbersome in-home antennas (or paying local cable companies for HD-quality local stations and a DVR box). Goodbye $70 cable-TV bill. Broadcasters also lose every time the local pay television company drops a subscriber. Aereo does not pay retransmission consent fees, nor do their subscribers.

But Aereo is not all bad news for pay television providers. If Aereo can survive the legal onslaught from broadcast interests, nothing stops local cable companies from licensing Aereo technology (or constructing their own system) that would bypass retransmission consent fees as well. That could save cable operators millions.

Ridiculous? Not according to Matt Bond, an executive vice-president at Comcast/NBC who told a New York federal court the risk is real.

“It makes little economic sense for cable systems and satellite broadcasters to continue to pay for NBCU content on a per-subscriber basis when, with a relatively modest investment, they can simply modify their operations to mirror Aereo’s ‘individual antenna’ scheme and retransmit, for free, over-the-air local broadcast programming,” Bond said. “I know for a fact that cable companies have already considered such a model.”

Diller

Broadcasters revile Aereo’s disruptive innovation.  Bond called the service “piracy.” Other network executives say it steals their content and resells it at a profit. Some are even predicting the destruction of broadcast television as we know it if Aereo is found to be legal. Virtually every network is on board for the lawsuit, which seeks an immediate injunction that would shut the service down.

Barry Diller, a veteran broadcast executive, has invested in Aereo and calls the broadcasters’ fears rubbish.

“It’s not the beginning of the destruction of anybody,” Diller told New York Magazine. “TV wasn’t the destruction of the movie business. Television wasn’t the destruction of radio. Cable wasn’t the destruction of broadcast networks. What happens is new alternatives come, and they live alongside whatever existed.”

“You have an antenna that has your name on it, figuratively … and it’s one-to-one. It is not a network,” Diller told members of the Senate Commerce Committee during a recent hearing. “It is a platform for you to simply receive, over the Internet, broadcast signals that are free and to record them and use them on any device that you like.”

Aereo is not a pioneer in the video streaming of over the air signals. iCraveTV launched in 1999 streaming broadcast stations from Buffalo, N.Y. and Ontario, Canada from its home base in Toronto. Broadcasters filed suit and quickly shut the service down. ivi-TV tried a similar venture in 2011 and was also shut down. Even companies experimenting with IPTV technology have run into trouble with some networks that feel threatened by a possible precedent that could be mistakenly established, starting a flood of similar services.

To date, only services that agree to broadcaster sanctions (Slingbox) or who have retransmission consent contracts with providers (such as the cable industry’s TV Everywhere project) have survived, but all have limitations imposed on their functionality that reduce their usefulness to consumers.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Aereo TV Demo May 2012.flv[/flv]

Aereo TV was demonstrated by the company CEO Chet Kanojia at the New York Tech Meetup May 9.  (21 minutes)

Can we have 90 seconds of your time, please?

Christopher Mitchell at Community Broadband Networks has put together some compelling evidence about how some of the most advanced broadband networks in the country are being built by and for the communities they ultimately serve.

You may think the best broadband around can be found in the biggest cities in America, but you’d be wrong.

“It may surprise people that these cities in Virginia, Tennessee, and Louisiana have faster and lower cost access to the Internet than anyone in San Francisco, Seattle, or any other major city,” says Christopher Mitchell, Director of ILSR’s Telecommunications as Commons Initiative. “These publicly owned networks have each created hundreds of jobs and saved millions of dollars.”

The fact is, public broadband is convincing some of the country’s biggest tech companies, including Amazon.com, to locate enormous distribution centers right in the middle of fiber-plentiful cities like Chattanooga, and that means job growth — a lot of it.

Unfortunately, too often today’s “broadband innovation” comes only from how to extract more money for less service from some of America’s top providers. Usage caps, overcrowded networks, and speed constraints conspire to help America lose the global speed race.  But some communities are fighting the good fight themselves, even as big phone and cable companies like AT&T, Time Warner Cable, Comcast, and CenturyLink are trying to smash those networks through special interest corporate welfare legislation.

Mitchell and his team have assembled the facts: BVU Authority’s OptiNet in Bristol, Virginia; EPB Fiber in Chattanooga, Tennessee; and LUS Fiber in Lafayette, Louisiana — all built by publicly-owned utilities, demonstrate the public sector can deliver effective, innovative service at prices consumers can afford.  Better yet, they’re doing it in places big telecommunications companies decided were unworthy of getting world-class service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Community Broadband.flv[/flv]

Watch this video and learn why community broadband networks represent America’s most innovative broadband, and then learn more about how you can get involved and support better broadband in your community.  (2 minutes)

Wall Street analysts are predicting the end of free video streaming in the near-term as media and cable companies regain control over online content for themselves.

Cable companies are partnering with content producers to move a growing amount of streamed video content behind paywalls in an effort to protect their core business profits.

The trend is evolving so rapidly, analysts like Laura Martin with Needham & Co. predict the end of free streaming is imminent.  Either customers will pay upfront or use TV Everywhere “authentication platforms” that require evidence of a pay television subscription before being able to watch.

Craig Moffett, an analyst with Sanford Bernstein, perennially sees cable operators as the most likely winners in the billion-dollar entertainment battle.

“They’re winning the broadband wars,” Moffett says of the cable industry. “Broadband is increasingly the flagship product, not the video distribution business.”

Cable networks and program producers are growing increasingly alarmed at the impact video streaming services like Hulu and Netflix are having on their bottom lines.

Case in point: the fall of Nickelodeon, a popular children’s cable network that used to guarantee high ratings and lucrative ad revenue.  Recently the network has fallen off the ratings cliff.  Some careful analysis found the reason why: Netflix.  Nickelodeon, along with many other cable networks, licensed a number of their series to Netflix for on-demand viewing. In households with young children, parents increasingly choose the on-demand Netflix experience for family viewing over the traditional cable channel.

Moffett

That’s a major problem for content producers and networks, and Moffett quotes industry insiders who predict licensing deals for Netflix streaming will increasingly not be renewed (perhaps at any price) as networks retrench to protect their core business.  What is left will soon be behind paywalls, limited to customers who already subscribe to a pay television service.

That line of thinking is already apparent at Time Warner (Entertainment), Inc., where CEO Jeff Bewkes rarely has a good thing to say about Netflix.  His company refuses to license a significant amount of their content for online streaming because it erodes more profitable viewing elsewhere.

Time Warner only licenses older content and certain “serialized dramas” that have proven difficult to syndicate on traditional broadcast television or cable outlets.  But the company keeps kid shows to itself and its own distribution platforms, like Cartoon Network.

When it does let shows go online, it wants them behind paywalls.

Bewkes applauded Hulu’s recently announced plans to move its service away from free viewing.  Authenticating viewers as pay TV subscribers before they can watch “makes sense” to Bewkes.

“Hulu is moving in the right direction now,” Bewkes said.

Big media companies do not want significant changes to the viewing landscape, where major networks front the costs for the most expensive series, and cable networks commission lower budget programs and repurpose off-network content.  Pay television providers bundle the entire lineup into an enormous package consumers pay to receive. That is the way it will stay if they have their say.

“Just because consumers would rather get individual channels a-la-carte, on-demand, and streamed — only what they want to pay for — [if they think] that is inevitably the way the world if going to evolve, not so fast,” Moffett said. “It may be the way consumers want it and it may be the way technologists want it, but the media companies have a say here.”

“There is no way they are going to voluntarily unbundle themselves,” Moffett said.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Moffett on Cable Operators 4-30-12.mp4[/flv]

Craig Moffett talks about the current state of the media business on Bloomberg News.  He sees trouble ahead for online video streaming, as powerful media and entertainment content distribution companies reposition themselves to better control their content… and the revenue it earns.  The big winners: Cable operators, Hollywood, and major cable networks.  The losers: Consumers, Netflix, Hulu, and free video streaming. (11 minutes)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Martin Sees End of Free Streaming TV Content 5-4-12.mp4[/flv]

Laura Martin with Needham & Co. predicts the imminent demise of free video streaming. Media companies can’t handle the loss of control over their programming, and the erosion of viewers (and ad revenue) it brings.  Martin tells Bloomberg News she sees a future of paywalls blocking access to an increasing amount of online video content.  (5 minutes)