Mark Cuban, owner of HDNet, maintains a personal blog

Mark Cuban is on another tear this week.  Stop the Cap! reader Michael referred us to the latest.  This time it’s TV Everywhere, the cable industry’s answer to online video they get to own and control.

TV Everywhere is a concept put out by TV distributors that basically says that if you pay for cable or satellite, you should be able to watch the content you want, where you want. Everywhere. To some people this is not a good idea.  As is always the case,  many people think tv programming should be widely available for free on the internet.  Of course the content is never free. Someone has to pay to create it and we purchasers of cable and satellite services pay the subscription fees that pay the content companies and allow them to create all that content. Someone always must pay for free. Its unfortunate that there are some incredibly greedy people who think their entertainment needs should be subsidized. We aren’t talking healthcare, we are talking The Simpsons.  No one in the country has the right for their Simpsons to be subsidized.

I am uncertain why Mark is tilting at windmills here, fighting a battle with arguments that are beside the point.

He should know, as an independent programmer, permitting another cartel for video program distribution online has the potential to place control of that content in the hands of the pay television industry.  Agreements to carry a cable network on a cable system could easily become contingent on participation in TV Everywhere once it becomes more established.  Mark knows all about restrictive carriage agreements.  Some of his networks were trapped in a mini-premium HD tier on Time Warner Cable, despite his wishes to see them a part of the general HD lineup.  Once Time Warner Cable threw his networks off their cable systems nationwide, presumably so would go our online access to it as well.

For consumers, the basic concept of TV Everywhere seems like a positive development, if it brings online video content people want to see without charging them yet another fee on their pay television bill.  Consumers, raise your hand if you have a problem with more online video.

In fact, the loudest concerns about the entire endeavor these days are coming from the content producers and owners themselves.  They are the ones worrying about giving content away.

The Wall Street Journal chronicles the concerns:

While 24 networks are taking part in the Comcast trial, including Time Warner’s Turner cable networks, broadcaster CBS, AMC, BBC America, and Hallmark Channel, Walt Disney Co. (DIS) has so far avoided the “TV Everywhere” experiment because it doesn’t offer the Disney networks enough money in return for allowing their shows to be streamed over the Web.

“A new opportunity to reach consumers is very attractive … [but] we want to do so in a way that delivers proper compensation [to us] for that value,” said Disney Chief Financial Officer Tom Staggs, who spoke at the Goldman Sachs media conference on Tuesday.

That brought out Jeff Bewkes, Time Warner CEO, who scoffed at the demands for compensation.  Bewkes reminded Disney who is paying the bills.

“[The content providers are] not the ones who are going to the effort and expense of making this possible,” he remarked. “The ones that are making this possible are the distributors – the telcos, the satellite companies, the cable companies.”

Second, nobody is arguing that TV programming should be given away “free” online with absolutely no compensation.  The existing online video models are primarily advertiser supported.  The advertisers pay the costs to make the service available, and viewers endure online commercials during each ad break.  Some networks want to cram a ton of ads equaling the number a viewer would see on their television (get ready for more Snuggie and door draft stick on tape ads). Others are more realistic and will place a maximum of 30 seconds of commercials during each break.  Finding the right balance will be important — too many ads and consumers will pirate the content to avoid the ads.  Run smaller amounts and consumers will easily tolerate them.

Third, nobody I am aware of is arguing TV needs to be “subsidized.”  What does that even mean?

Besides the skirmish between content providers and the companies that want to distribute TV Everywhere, the concerns I’ve seen expressed include:

• The concentration and control of online video content through a cable industry-controlled authentication system that is long on generalities and short on specifics regarding how it will operate.  How do non-cable subscribers get “authenticated.”  What procedures are in place to protect the competitive data other providers will have to share with any authentication process?  How about customer privacy?  Is there equity of access to TV Everywhere regardless of the pay television service the consumer subscribes to?
• The credibility of the broadband providers’ argument that their networks are already overcrowded to the point they must “experiment” with usage caps, consumption billing, and other Internet Overcharging schemes.  Apparently their networks aren’t nearly as congested as they would have us believe, considering the fact they are participating in a project to place an even greater load on those networks.
• Mark seems to support content portability, namely the ability for a subscriber to place that content on any device for viewing.  Good luck.  Content producers go bananas over content that can be downloaded and viewed on any device or computer, because such open standards are also open to rampant piracy.

TV Everywhere can be a consumer value-added service for pay television providers, if it’s handled in a consumer friendly way.  The cable industry does not have an excellent track record of keeping their customers in love with them.  My personal concern is that what TV Everywhere gives away for free to “authenticated” subscribers today will tomorrow be packed with advertising, carry an additional fee for access on your cable bill, and will be just one more excuse to try and ram usage caps and consumption billing down the throats of the broadband customers trying to take advantage of their broadband service.

Motorola SB6120 SURFboard DOCSIS 3.0 eXtreme Broadband Cable Modem

Another year, another rate hike for millions of Comcast customers.  The cable company is notifying cable subscribers of rate increases for programming and equipment.  While Comcast says the rate increases are among the lowest the company has implemented, the sting will be felt differently based on the types of services a customer receives.  One particularly nasty increase is for the cable modem rental fee.  In most areas, that used to be $3 a month, but is now increasing a whopping 66% to $5 a month.  Comcast blames the increased equipment expenses incurred upgrading their broadband network.

Consumers can avoid the monthly rental fee by purchasing their own cable modem, retailing for $60-100 depending on the model.  A Motorola SB6120 SURFboard DOCSIS 3.0 eXtreme Broadband Cable Modem is available from Amazon.com for less than $90 and works with Comcast.

Although not every Comcast customer rents a cable modem from the company, the company will earn hundreds of millions of dollars in new revenue from the rate increase for cable modems, according to Multichannel News.

The Marin Independent Journal crunched the numbers:

In the San Francisco area, where Comcast has 2.2 million customers, the average rate increase will be 1.6 percent, down from a 4.9 percent spike in 2008-09 and a 6.9 percent jump in 2005-06.This year’s rate increase is the lowest in the past six years in what has become an annual rate hike for Comcast customers. The company has raised rates on its average Marin customer by a cumulative 29.5 percent over the past six years, based on the company’s annual notices of price changes.

The San Jose Mercury News observes that the rate increases will hit some harder than others:

Ironically, the customers who will see their rates increase are those who subscribe to the company’s lowest-end — and least-enhanced — packages. Subscribers to Comcast’s more expensive packages generally will see no rate increase.

Mindy Spat, communications director of The Utility Reform Network, a San Francisco-based consumer advocacy organization, said Comcast appears to be taking advantage of its lower-end customers.

She noted that many Bay Area consumers who were unable to tune in the new digital broadcast signals signed up for limited basic cable to continue to get the local channels after the old analog ones were switched off earlier this year. With the increases, Comcast also appears to be trying to push customers into higher-tier packages, she charged.

“If consumers had choices, they certainly would not choose Comcast,” Spat said. “But they don’t, and Comcast is taking advantage of the fact.”

Of course, the only thing not increasing this year is Comcast’s 250GB usage cap.  It remains locked firmly in place at 2008 levels.  How much Comcast will recoup from a perpetual modem rental fee providing up to $300+ million a year in new revenue is an open question.  But clearly some cable operators intend to pay for upgrades to their networks by means other than forcing consumers into consumption billing schemes.

Communications and Information Technology Minister Hon. Steven Joyce

New Zealand, long ranked near the bottom of the barrel in broadband according to OECD rankings, will embark on a $1.5 billion (NZD) national broadband initiative, with a publicly-owned fiber network as its hallmark.

The plan, which will give urban and suburban New Zealand residents access to speeds faster than commonly available in the United States, will reach three-quarters of the population within the next ten years.  New Zealand has discarded the “wait around for the private sector” approach, which has left the country with stiflingly slow and heavily capped broadband at high prices.  Instead, it will create an open access fiber optic network on which private providers can compete and offer consumers the speeds they desire.  Communications and Information Technology Minister Steven Joyce issued a statement explaining why the government was getting involved:

Private sector companies have decided, on behalf of their shareholders and as a commercial decision, not to invest in a nationwide network of fibre-to-the-home at this point in time.  The government understands this, and so wishes to assist and work with the private sector in improving the business case for ultra-fast broadband.

The government is also getting involved in order to encourage the provision of widespread open access dark fibre services, which will facilitate the best possible competition outcomes in emerging markets and encourage innovation in wholesale and retail services.

For residents in 33 communities across the country targeted for access to the new network, it cannot come soon enough.  For many of them the most important issue, even beyond speed, is an end to what one Henderson resident called “the current crap called ‘data caps.'”

“The speed of the broadband is meaningless compared to the tiny data caps involved.  On the current slow broadband, I use up my 50GB data cap 12-15 days into the month.  Ultra fast broadband would only be useful with no data caps involved, because the existing broadband speed is twice as fast as the cap already,” Lucy in Auckland told the New Zealand Herald.

Rose in Glenfield agrees:

“We have a 20GB data cap that we chew through in about 10-14 days, and then we are stuck on 64kbps or we have to pay another $30 for another 20GB to get through the rest of the month. When are they going to address these kinds of issues,” she asks.

New Zealand has seen the impact of Internet Overcharging schemes for years.  Providers originally introduced ‘data caps’ to reduce the usage on their networks, but have since relied on them, and consumption billing also as a way to collect revenue.  Most residential customers endure usage caps of 20-50GB per month.  After that, some providers dramatically reduce their connections to just above dial-up speed, while others have found new revenue by charging customers $2/GB or more in overlimit penalties and fees.  Some offer additional usage allotments, but at high prices, such as $30 for 20GB of additional usage.

The result has been a dramatically lower adoption of broadband in New Zealand, and many don’t think it’s worth the money.

John Rutter in Howick suggests speed is secondary to dealing with the issue of loathed usage caps.

“I like the idea of a ultra-fast broadband investment initiative but I hope Internet service providers like Vodafone, Slingshot, and Orcon will provide unlimited Internet soon. Unlimited Internet should come first, then ultra-fast broadband,” he said.

The government has received public support for its broadband initiative.  The public benefit is a much faster “public highway” on which private providers can offer service to individual customers.  By constructing a fast pipeline publicly that no provider is willing to provide privately, it creates additional value for consumers who find faster, more reliable service, preferably on better terms.

“Already a number of companies have shown interest in the government’s broadband initiative,” Joyce said in a statement. “It’s time to get on with finding the right partners to build these networks.”

The government “is prepared to accept a less than commercial return” from the partners. It aims to hold less than 25 per cent in the partnered investment vehicles and will resist contributions of more than 50 per cent.

For rural New Zealand, the answer generally won’t come from a fiber-based strategy, Joyce says.  Instead, the government estimates $300 million will be needed from public and private sources for a rural broadband plan.  Significant portions of New Zealand are difficult to reach with traditional broadband networks, and many New Zealand residents in even medium sized outlying towns find themselves on long waiting lists for what service is available.

Steve in Wellington told the Herald “a lot of towns (like Richmond, Tasman and Rolleston – not just remote areas) have issues where due to lack of exchange space many people cannot get broadband or are on ‘port waiting lists’ waiting for ports to become available. I think the main issue should be ensuring access to broadband full stop. Not just faster for those lucky enough to already have it.”

Rural broadband through wireless is one initiative under consideration.  WiMax technology can deliver fast broadband to rural area, often at faster speeds than traditional telephone company DSL in rural communities.

(Courtesy: Lab squad)

The broadband stimulus package advocated by the Obama Administration may become a feeding frenzy for waste, fraud, and abuse.  That’s the attitude of several public interest groups concerned about how public tax dollars are being used to study, map, construct, and deploy broadband networks to reach the underserved, and those without any broadband service at all.

Now the story has drawn the attention of the Associated Press’ technology reporter Peter Svensson, who along with Joelle Tessler, have written a piece exploring just where American taxpayer dollars are going on broadband mapping.

The $787 billion stimulus bill championed by the Obama administration set aside up to $350 million to create a national broadband map that could guide policies aimed at expanding high-speed Internet access. That $350 million tag struck some people in the telecommunications industry as excessive, compared with existing, smaller efforts. The map won’t even be done in time to help decide where to spend much of the $7.2 billion in stimulus money earmarked for broadband programs.

Svensson and Tessler talked to a variety of industry experts, as well as companies that often find themselves at a major disadvantage when trying to bid for mapping funds and discover the lowest bid for the best work isn’t always the determining factor.

The consensus is that the government is at risk for overspending up to 90% of the money set aside for mapping, and has vastly overestimated the actual costs:

Rory Altman, director at telecommunications consulting firm Altman Vilandrie & Co., which has helped clients map broadband availability in some areas, said $350 million was a “ridiculous” amount of money to spend on a national broadband map.

Even $100 million might be high. The firm could create a national broadband map for $3.5 million, and “would gladly do it for $35 million,” Altman said.

More concerning is the fact that some of the interests that have successfully won mapping contracts are infested with self-interested telecommunications company executives who have a vested interest in steering the findings of the mapping projects, as well as defending common industry practices of withholding data for “customer privacy” and “competitive” reasons.  Allowing the telecommunications industry to provide the raw data (considerably redacted), a practice defended by telecommunications executives sitting on the boards of some mapping firms winning bids, is a recipe for the production of industry-favorable maps.

Public Knowledge, a public interest group, has been particularly critical of broadband mapping strategies, essential to measuring the current availability and very definition of what is broadband service in the United States.  Art Brodsky, communications director of the group, has reported extensively on the issue for months.

Art Brodsky, for Public Knowledge:

It would be a shame if the stimulus mapping/grant program and the broadband plan were considered in isolation, because they are, together, pieces of the same puzzle. Certainly the telephone and cable industries are considering them together, and using the leverage on one to influence the other to reach the inevitable conclusion that no new broadband policies are needed and that everything will be just fine if we leave the companies in control. Ignore our slumping world rankings for broadband. Ignore the lack of choice. Let’s try to connect the dots into a long silver thread.

The first dot is broadband mapping. If the maps show there is no problem with broadband coverage, then there should be no need for legislation, regulation or any other policies that would immediately be branded a “solution in search of a problem” by the telecom industries. Connected Nation plays a key role here, because their maps will be constructed in at least a dozen states, perhaps more, under the broadband stimulus plan.

Unfortunately, the way the stimulus mapping program is going, that piece is falling nicely into place. By agreeing to the telephone and cable industry’s request – some might say caving into the industry’s demand – that broadband speeds not be reported, the National Telecommunications and Information Administration (NTIA) opened the door for all kinds of mischief. In public comments, NTIA officials said such an agreement was necessary to gain the cooperation of the telephone and cable companies. That’s one way to look at it. Another way is that by requiring the carriers to report broadband speeds – even if their reports were inaccurate – at least there would be something on the record that could be corrected, criticized or cited. Without speed data, the value of the program diminishes. Even under the old rules, all the carriers had to show was “advertised” speeds, so the carriers started advertising. The speeds agreed to by NTIA as “broadband” in the first place are relatively slow anyway.

Mark Seifert, oversees the broadband grant and mapping programs at the NTIA defends the spending proposals by the federal government.  Seifert told the AP that since much of the data will come from the providers’ themselves, NTIA plans to “independently verify” the veracity of the data it receives, which he claims could include door-to-door verification with individual residents and other unspecified verification procedures.

Meanwhile, critics of some of the industry-connected broadband mapping efforts say the groundwork may be laid for future challenges by the nation’s largest broadband providers (large telephone and cable companies) who almost uniformly avoided participating in the first round of stimulus grant applications.

Michael Tattersall, founder of the mapping company Stratsoft is concerned.  He told Public Knowledge incomplete or false map data could be used by providers to have other groups’ stimulus applications thrown out.

If the maps show there is more coverage in rural areas than there actually is, then Tattersall said, the “smaller, in-state broadband providers that are applying for funds that will be directly affected by the quality and integrity of state-commissioned broadband maps.” There could be challenges by the larger carriers, which didn’t apply for stimulus funds, to broadband grants from smaller rural, municipal or neighborhood based on already existing Connected Nation maps.

Disqualified applications based on discredited map data could throw the entire stimulus program into doubt, allowing telecommunications lobbyists for the big providers to argue the stimulus program is a failure and needs to be started over, with recommendations those large providers get the bulk of the money.

Indeed, several providers are already concerned with the prospect that stimulus funds could be used to bring competition to their areas — start-ups and projects funded by government money that could eventually directly compete against their existing offerings, designated as too slow or backwards for 21st century broadband.

With providers already trying to downplay expectations for what defines fast, robust broadband, it leaves incumbent providers keeping their communities in a perpetual slow lane in a much better position not to stick out like a sore thumb.  Brodsky again:

In addition to using the maps, telecom carriers are also trying to freeze the idea of advancing broadband into what exists today.

AT&T led the charge on this, in a remarkable filing that would, in essence, freeze broadband where it is now because that’s what the stimulus law directs the FCC to do when it formulates a broadband plan. AT&T said, “In other words, the definition of broadband must comprise services that can practicably be deployed in unserved and underserved areas—and must comprise services that today’s unserved Americans can and will actually adopt.”

Speedy internet connections have yet to take off in many parts of South Africa because of a shortage in bandwidth.

One leading internet provider says it is not to blame for the slow connection, but frustrations have led one IT group to adopt an unusual method of delivery.

Al Jazeera’s Haru Mutasa reports on the pigeon that beat the internet in Johannesburg.

Service providers across the continent blame the expensive and slow Internet reality for much of Africa on a shortage of connectivity, particularly between Africa and the rest of the world. One African-owned firm, Seacom hopes to change that with the introduction of a new fiber optic cable that went live in July. The new connection enhances service between much of East Africa, including South Africa, Tanzania, Kenya, Uganda and Mozambique. The cable also provides a new path to reach Europe and Asia at speeds superior to what used to be common across Africa.

But while bandwidth may slowly be on the increase, savings are much harder to find. Businesses routinely pay $600 per month for 1Mbps service. But some providers suggest that does represent savings. Satellite service at the same speed is priced at an average of $3,000 per month.

Consumers in South Africa find broadband pricing very high, with most relying on Telkom, the nation’s primary phone company, for DSL service. Usage caps are prevalent across the continent as well, stifling the development of African broadband services and making services like online video all but unaffordable.

Africa's Internet Connectivity

Thanks to Stop the Cap! readers Jeff, Bones, Terry, and a few others who let us know about this story.