Just over one year ago, Stop the Cap! introduced readers to Sezmi, a cable-TV alternative that delivered a package of selected cable networks, on-demand movies, video podcasts, YouTube content and local broadcast stations with a 1TB DVR set top box for $19.99 a month. Subscribers that decided to forgo the cable networks paid even less — $4.99 a month for service.

But no more.

As of this morning, Sezmi has discontinued its service, leaving customers with a nearly-worthless set top DVR box they spent $149.99 to acquire, and a number of questions about the company’s sudden change of direction.

The company issued a statement telling customers it has ceased monthly billing and giving customers until later this year to use some of the features Sezmi operates in-house:

We regret to inform you that Sezmi is discontinuing its consumer service. As of Monday, September 26, 2011, you will no longer be able to view or record broadcast TV programming through your Sezmi System. However, you will still be able to view movies and shows you have already saved to your Sezmi media recorder. To help ease the transition, you may also rent movies and shows if available at no charge from Sezmi’s On Demand catalog through November 1, 2011.

Why do you have to discontinue your consumer service?
Sezmi has changed its business focus to providing our product and technology platform to service providers, internationally and in the U.S., who are interested in providing broadband video services to their customers. As a result, we are no longer supporting our direct-to-consumer service.

What does this mean for me?
You will no longer be billed for Sezmi service. As of September 26th, you will no longer be able to utilize the programming guide and your digital media recorder will no longer operate as a recorder. You will be able to view movies and shows you have already saved to your recorder and YouTube access will not be affected. Between now and November 1st, you may rent any movies or shows at no charge to you. After November 1, Sezmi’s On Demand catalog will no longer be available but you will be able to use your Sezmi system to view all programming you have saved to the media recorder.

No Service After Sept. 26, 2011 didn't make the list.

What it also means is customers are stuck with a proprietary DVR box that won’t work with other services.

Sezmi’s business model was most operational in the Los Angeles market, where it leased unused spectrum from several LA-area television stations to carry its lightweight cable package.  In other markets, Sezmi simply wedded over the air digital free television stations with its online lineup of on-demand programming and charged $4.99 a month to watch.  It was never a compelling offer outside of Los Angeles, and even in that city, trouble brewed when Sezmi discontinued the cable package in December.

Among the difficulties Sezmi encountered:

1. Finding cooperative local broadcasters willing to lease unused digital spectrum to Sezmi proved to be a difficult proposition.  Broadcasters are zealously guarding the frequencies they control now and do not want to get into long-term contracts with third parties.  Network owned stations in major cities may have already committed significant spectrum to their own sub-channels and other projects, or want to hold them in reserve for future use.  Besides, why lease spectrum to a company for a cable package large networks could theoretically build themselves.
2. Sezmi lacked access to many popular cable channels, notably ESPN and HBO.  It’s difficult to get consumers to drop a cable or telco-TV subscription in favor of one that is limited to two dozen cable channels, some of which were hardly deal-sealers.  Efforts to move cable channel programming to online distribution were met with difficulty because content owners increasingly want a piece of the action.  Deep pockets are required to sustain video streaming businesses.
3. Consumers never really understood the product and were not convinced to choose it over better known alternatives that included satellite TV.

Sezmi’s new focus on working with larger players could meet with some success, but Sezmi’s best chances of all could be developing the technology for ethnic audiences or other narrowcast opportunities where the lack of a hundred plus channel cable package would not be a factor.

TWC WiFi in Los Angeles County

TWC WiFi in Orange County

Time Warner Cable has unveiled free Wi-Fi service for their broadband customers on-the-go in selected portions of Los Angeles and Orange counties.

TWC WiFi comes free for Road Runner customers.  Others can access the network for $2.95 for one hour, $6.95 for one day, $19.95 for a week, or $49.95 a month, which is at least as much as the price of a traditional Road Runner account.

The first phase of the $15 million dollar wireless network covers 40 square miles, including downtown Los Angeles, Newport Beach, Santa Ana, Venice Beach, and West Hollywood.

That’s only a tiny fraction of Los Angeles County’s total size, encompassing more than 4,700 square miles, but the cable operator promises it will be expanding the wireless network to cover Westside coastal communities and more of Orange County.

Los Angeles joins New York City as Time Warner’s second Wi-Fi-enabled city.  The cable company is introducing Wi-Fi service to help improve the perceived value of the company’s broadband product.

New Englandia. Upstate New York. Northern California. Carolina. Missipiana.

None of these are actual states, but based on the people we communicate with who share our interests, perhaps they should be.

Researchers at MIT’s Senseable City Lab, AT&T Labs-Research and IBM Research are revealing new research that redefines regional boundaries in the United States, using patterns of social connectedness across the country derived from anonymous and aggregated cell phone data.

The results, based on numbers called and the geographic destinations or text messages, are predictable in some places, surprising in others.

The Connected States of America (click to enlarge)

Take New Jersey for example.  The state is remarkably divided between the northern half, whose people are socially linked with metropolitan New York City, and the southern half which almost entirely ignores the Big Apple and Long Island, maintaining closer connections with southeastern Pennsylvania and Delaware.

Some other highlights:

• Socially, most of North and South Carolina are indistinguishable from one-another.
• Chattanooga has more in common with Alabama and Georgia than the rest of Tennessee.
• Southern California’s sprawl is to the east, not to the north.  The influence from Los Angeles and San Diego now extends into Arizona, Nevada and even Utah.  Northern California sticks to itself with one exception — it has connections towards Reno, Nevada.
• Upstate New York, mostly above the Hudson Valley, is socially similar all the way west to Lake Erie, with the exception of Chautauqua County, which is culturally closer to Appalachian areas in western Pennsylvania and West Virginia.
• New England maintains close ties with the exception of northern Maine and New Hampshire, which may be closer to Atlantic Canada.
• Standalone states that mostly keep to themselves include Florida, Texas, Colorado, Michigan, Indiana, and Ohio.  With interest, many of those states are also politically defined as “swing states.”

The “Connected States of America” provides a more natural delineation of regions that follows relationships between family, friends and business partners.

“Sister states” emerge, such as Georgia and Alabama, Mississippi and Louisiana, and Tennessee and Kentucky, among others.

Metropolitan areas often form pockets of influence that extend into neighboring states or communities; for example, Chattanooga, Tenn., is more closely linked to communities in Georgia and Alabama than to the rest of Tennessee. Pittsburgh, Penn., and West Virginia form a new “state,” while St. Louis, Mo., exhibits an expanded reach that splits Illinois into two regions.

New Jersey and California also divide into two distinct regions due to large cities. In contrast, Texas remains whole: Despite the potentially splitting influence of cities such as Dallas, Houston, San Antonio and Austin, the researchers found that there is enough inter-city communication to hold the state together.

Charter Cable, one of America’s worst-rated cable companies, wants out of greater Los Angeles.  Its cable system, serving parts of LA, has been rumored for sale for years.  Now the cable company has gotten serious, hiring Goldman Sachs and Citibank to run an auction to sell off the system.

The most logical buyer, Time Warner Cable, has been engaged in on-again, off-again talks with Charter about Los Angeles for sometime, according to several sources in the cable investment community.  Charter proposed a swap, trading its Los Angeles system to Time Warner if they could acquire Time Warner’s subscribers in Wisconsin.

Time Warner Cable currently serves 560,000 subscribers in Green Bay, Milwaukee and Appleton.  Charter serves much of the rest of the state.  Thankfully for many Wisconsin customers, Time Warner Cable told Charter they were not interested.  Time Warner gets significantly higher customer ratings than Charter does.

Now that Goldman Sachs and Citibank will be running an auction, Time Warner Cable could still ultimately acquire the Charter systems in Los Angeles, if they are willing to pony up an estimated $2 billion asking price.  If Time Warner won’t bid that high, speculation is that Comcast, Cox, or Cablevision will.

A surprise bonus for buyers are rumors Charter will throw in its cable system in Fort Worth, Tex.  That move would also seem to benefit a Time Warner Cable takeover, considering the nation’s second largest cable operator already has an enormous presence in the Dallas/Fort Worth Metroplex.  But Multichannel News points out that part of Texas brings bad memories for Time Warner, when it had to effectively commit to an expensive rebuild of the nearby ailing system acquired from bankrupt Adelphia Cable in 2006.

Time Warner Cable is still rumored to be the logical buyer of Insight Cable’s systems, also for sale, in Indiana, Kentucky, and Ohio, although the cable company is still balking at an asking price of up to $4 billion.

At a time when Time Warner Cable is increasing cable-TV rates for millions of subscribers nationwide, the nation’s second largest cable company managed to find several billion dollars to launch a new regional sports network showcasing the Los Angeles Lakers.

An agreement with the basketball team, which some analysts guess will cost the cable company at least $3 billion over the next two decades, will mean the loss of more than three dozen games formerly available over the air, for free, from KCAL-TV in Los Angeles.  Fox Sports West aired most of the rest of the team’s games, for which it paid an estimated $30 million a year, according to the Los Angeles Times.

Time Warner intends to use the Lakers to showcase new regional sports networks — one in Spanish — planned for the company’s two million subscribers in southern California.

The deal stunned both KCAL and Fox Sports.  Time Warner Cable is the only major cable operator not running its own major regional sports networks, which represent the cable industry’s most costly programming.  Unlike premium movie channels, most sports networks are included in standard cable lineups or shifted into “mini-pay” tiers that charge a few dollars per month.  Sports programming costs often represent the most significant part of cable company rate hikes.

The Times predicts Time Warner will end up charging itself at least $3.50 a month for the new networks, which means individual subscribers could be looking at a substantial rate increase down the road.

But Time Warner doesn’t intend to just deal with the Lakers.

Melinda Witmer, executive vice president and chief programming officer of Time Warner Cable, said the company would be “looking at all available sports in the marketplace.”

That could drive prices up even faster.

The cable company says it is getting into the sports network business to “control our economic destiny.”