TiVo Roamio DVR

The newest entry in the should-be-more-competitive world of Digital Video Recorders (DVRs) might have gotten five stars from reviewers willing to play down the device’s asking price, but the biggest hurdle of all isn’t its cost, it is the complexity of getting it to work properly with your cable provider.

TiVo’s new Roamio was designed to declutter your viewing experience. It’s a DVR that can record shows you missed, an online video device that can stream content from Netflix, Hulu Plus, Amazon Instant Video, Spotify, Pandora and YouTube right on your television, and perhaps most powerful of all — it will soon stream it all to you on any mobile device located anywhere there is an Internet connection.

That puts TiVo’s Roamio well ahead of the behind-the-times set-top boxes and DVRs rented out by the cable company. Customers have clamored for a device that can properly record scheduled programs and allow those recordings to be viewed anywhere the customer wants to watch. Comcast’s box doesn’t work that way. Neither do boxes from Time Warner Cable, Cox, Bright House, and the rest.

Cue the lawyers.

The reason these common sense portability features are not available on the box you rent in perpetuity from the cable company is that programmers won’t allow it and many pay television providers don’t consider it a priority. Time Warner Cable only recently filed a patent to deliver customer-recorded content to portable devices. The patent application is an exercise to placate litigious programmers that cannot sleep nights knowing someone is offering a service they failed to monetize for themselves through licensing agreements. Feel the legal fees piling up:

“Because of the increasing popularity of home networking, there is a growing need for a strategy that enables a user to perform authorized transfer of protected content, e.g., transferring content from an STT [set-top terminal] to a second device in a home network, and at the same time prevents unauthorized distribution of the protected content,” Time Warner writes in its patent application.

While TiVo is selling a device that allows consumers to record programming for private viewing purposes, a cable operator with deep pockets that only rents DVRs cannot do likewise.

The Roamio comes in three versions, none of which are compatible with satellite television services:

• Roamio Pro ($600): Six tuners allow customers to record up to six shows at one time and has storage capacity for 450 hours of HD programming. Includes built-in Wi-Fi. Stream TV to mobile iOS devices coming soon (as is Android support);
• Roamio Plus ($400): Same as above except storage capacity is 150 hours of HD programming;
  Roamio ($200): Four tuner basic version omits built-in streaming to mobile devices but can record four shows at once and store 75 hours of HD programming. A good choice for cord-cutters as it includes an over-the-air broadcast television antenna input.
• All Roamio devices require TiVo service, which costs $15 a month or $500 for a lifetime subscription. All boxes support external hard drives with an eSATA interface to backup or store more recordings. All Roamio devices support 1080p and Dolby Digital 5.1 sound.

This Comcast DVR is only available for rent.

In contrast, cable operator-provided DVR service can often add $20 a month to your cable bill… forever. But is there real value for money paying TiVo $15 a month (or a $500 payment for the life of the device) for “service” on top of hardware that can cost up to $600?

TiVo thinks so: “Once you bring together all your favorite shows, movies and music into one place, you’ll wonder how you ever lived without it.”

Unfortunately, getting there is one heck of a battle according to Bloomberg’s Rich Jaroslovsky, who got his hands on a test unit that simply refused to get along well with Comcast.

“The cable industry is standing in the way,” Jaroslovsky writes.

That may not be surprising, considering the lucrative business of renting DVR equipment to customers eager for time-shifting and commercial-skipping. The cable company’s concept of DVR service includes a set-top box, decoder, and recording unit into one, relatively simple integrated device.

TiVo’s persistent monthly “service fee” as well as a steep purchase price made marketing the cable company’s “no-purchase-required” DVR easy, and the cable industry quickly won the lion’s share of the DVR business. Another strong argument in favor of the cable company’s DVR is the lack of a complicated set up procedure to get competing devices to reliably work with the cable company’s set-top box.

Motorola’s M CableCARD

Thanks to Comcast and other cable companies, setting up Roamio managed to confound even a tech reporter like Jaroslovsky, and Comcast was not much help.

The Roamio requires a CableCARD, a plug-in card-sized version of the cable company’s set-top box, to unlock digital cable channels.

The CableCARD was Congress’ attempt in the 1996 Telecom Act to give consumers an option to avoid costly and unsightly set-top boxes. Originally envisioned as a plug-in device that would offer “cable-ready” service without a set-top box in future generations of televisions, the CableCARD never really took off. The cable industry opposed the devices and dragged its feet, preferring to support its own set-top boxes. The CableCARD that eventually did emerge was initially often difficult to obtain and had huge limitations, such as one-way-only access which meant no electronic program guide, no video-on-demand, and no access to anything that required two-way communications between the card and the cable company. Newer CableCARDs do offer two-way communications and support today’s advanced cable services.

The only place most cable operators mention the availability of the CableCARD in detail is in a federally mandated disclosure of pricing, services, and a consumer’s rights and responsibilities — usually provided in a rice-paper-thin, tiny-print leaflet included with your bill once a year, if you still get one in the mail.

Roamio is likely to frighten technophobes right from the start with this important notification:

CableCARDs are made by one of four manufacturers: Motorola, Scientific Atlanta/Cisco, NDS, or Conax. You need one multi-stream CableCARD (M-card). Single-stream CableCARDs (S-cards) are not compatible.

“That costs an extra $1.50 a month from Comcast, and in my case, required three trips to its nearest office because the first card didn’t work,” Jaroslovsky writes.

On the second trip, Comcast handed him two cards in the hope at least one would work, requiring one last trip to return the card that didn’t.

Time Warner Cable and certain other cable operators use Switched Digital Video, incompatible with the Roamio without a Digital Tuning Adapter, available from the cable company.

The second hurdle was to get Comcast to recognize and authorize that CableCARD. Comcast’s technical customer support staff was lacking. Jaroslovsky found his call bounced from department to department attempting to authorize the card and diagnose why it simply refused to work at first.

After finally overcoming those problems, Jaroslovsky discovered he was out of luck getting Roamio to stream premium movie channels like HBO and Cinemax. The encryption system Comcast supports prohibits streaming the movie networks outside of the home. The Slingbox works around the issue by bypassing the encryption system’s permission settings with extra cables between it and your cable box.

Time Warner Cable subscribers will need still another piece of equipment — a Tuning Adapter compatible with Switched Digital Video (SDV). To conserve bandwidth, cable companies like Time Warner limit certain digital channels being sent to each neighborhood unless someone is actively watching.

Before you can view or record a program on an SDV channel, your box must be able to send channel requests back to the cable headend. Roamio is a one-way device and cannot send the required channel requests. Cable providers who have deployed SDV technology will provide a Tuning Adapter to customers who have HD TiVo boxes. A Tuning Adapter is a set top box that provides two-way capabilities, so your box can request SDV channels. There are two Tuning Adapter brands: Motorola and Cisco. Motorola CableCARDs work with Motorola Tuning Adapters. Scientific Atlanta and NDS CableCARD work with Cisco Tuning Adapters. Without the Tuning Adapter, a Roamio user will find error messages on several digital channels indicating they are “temporarily unavailable.”

Other cable operators offer varying support for Roamio. Cablevision has been learning how to support the device along with customers. Prior customer experiences make it clear front-line service representatives are not going to be very helpful managing the technical process to properly configure, update, and authorize CableCARD technology for the new TiVo device, so prepare to have your call transferred to one or more representatives.

After all this, Jaroslovsky was finally watching his Comcast cable channels, able to access on-demand services, and found TiVo’s interface and program guide more satisfying than the one offered on Comcast’s DVR.

Roamio Plus and Pro have built-in support for video streaming away from home that will be fully enabled this fall.

Jaroslovsky found in-home streaming smooth and satisfying. Programs launched quickly and looked terrific on an iPad with Apple’s high-resolution Retina display, with none of the blockiness or stuttering sometimes associated with streaming video.

His review unit allowed him to test streamed programming outside of the home and video quality on the go was much more variable. The current software prohibits video streaming on AT&T’s 4G LTE network, a problem with a resolution now in the works. Public Wi-Fi hotspots often delivered poor performance, even when they could supply up to 2Mbps. Blurred pictures and pixel blocks often broke up the video on slow Internet connections. A faster connection supporting more than 10Mbps is capable of delivering a better viewing experience, especially if that connection comes without usage caps.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/TiVo Roamio DVR Demo Video 8-19-13.flv[/flv]

An introduction and demo of the TiVo Roamio DVR, produced by TiVo. (3 minutes)

This article was updated with a clarification about Tuning Adapters, required by some cable operators using Switched Digital Video. Thanks to reader Dave Hancock for helping clear things up.

Cablevision may eventually get out of the cable television business.

Although industry analysts, consumer advocates, and technology columnists have long proclaimed the era of “cord cutting” is upon us, cable operators have always been in denial the product that got them their multi-billion dollar business — selling packages of television channels — is rapidly becoming obsolete.

But at least one CEO sees the writing on the wall.

If you don’t “ride the wave” you “get eaten by the wave,” declared Cablevision CEO James Dolan.

The Wall Street Journal sat down for a lengthy interview with Dolan, who predicted “there could come a day” when the cable television company quits selling television service, because a growing number of viewers have shifted to online video.

Dolan, like many Americans, isn’t watching television as much as he used to, and admitted that both he and his young children prefer spending their viewing time with Netflix, not Cablevision’s television package.

Jim Dolan

Dolan worries the next generation of television viewers don’t need or want a cable television package with hundreds of video channels. Today’s youth wants fast broadband with on-demand viewing of series, movies, and video clips. The transition may have already started. Cablevision reported Aug. 2 it lost 20,000 video customers over the last three months, many moving to broadband-only service and 11,000 abandoned the cable company altogether.

Dolan believes the industry is setting itself up for obsolescence.

“I don’t want to be saddled with an infrastructure that is as big as the one that I have now,” Dolan told the Journal, fearing the bloated cable television package is becoming too costly and unmanageable.

Instead, Dolan has ordered network upgrades to improve broadband service and help boost the company’s image with customers. Cablevision focused most of its spending on broadband and Wi-Fi service upgrades over the past year, both to meet relentless competition with Verizon’s fiber network FiOS, but also to develop the platform Dolan thinks will eventually be the only product the company sells. Although Cablevision cannot match Verizon’s upload speeds, the cable company offers a free Wi-Fi service for customers Verizon lacks. But the changes and network upgrades have been expensive and noticeable, because few cable operators are spending as much as Cablevision to improve service.

The changes in approach were too much for former chief operating officer Thomas Rutledge, who departed Cablevision to run Charter Cable in December 2011.

One of the primary reasons Rutledge left was Dolan’s increasing involvement in the business, causing a clash of business philosophies. Just a few months before Rutledge departed, the FCC issued a report that exposed Cablevision marketing broadband speeds its network could not sustain, especially during prime usage periods. Rutledge believed this was primarily a marketing problem. Dolan concluded the existing broadband infrastructure was inadequate.

“I felt that we needed to reinvest,” Dolan said. “When we took a hard look at what we were offering,… it just wasn’t what we wanted it to be.”

As Rutledge and his allies rapidly departed for Charter Cable, Dolan ordered a 32 percent increase in capital spending to $1.1 billion last year, at least $150 million targeted exclusively on broadband improvements. This year he has already informed Wall Street it will be more of the same, bringing expanded Wi-Fi, new and improved broadband modems for customers, even faster speeds, new outage detection equipment, and an improved cloud-based DVR service.

Existing customers like the changes, but don’t appreciate the price hikes that have accompanied them. Wall Street has the exact opposite point of view, welcoming increased revenue from rate hikes, but concerned about the company’s spending. Investors complain Cablevision’s returns are well below those of other cable operators which don’t face the Verizon FiOS juggernaut.

Still, for some customers, the changes have come too late and Verizon’s promotional offers to switch to fiber have been too good. Cablevision did at least manage to add 1,000 new broadband and 3,000 new voice customers during the second quarter.

“We’re not prepared to starve the business,” said chief financial officer Gregg Seibert. “In terms of upgrades, I think what you’re seeing with the high-speed rollout that we just did is that we feel that our plant is in very good condition. We’re delivering over advertised speeds in every day part. We intend to keep the plant in that type of condition.”

Dolan’s philosophy of upgrading service to improve customer relations also clashes with John Malone, who is rebuilding his cable industry power base at Rutledge’s new home — Charter Cable. Malone believes industry consolidation, not expensive network upgrades, is a better proposition for shareholders.

Dolan told investors Cablevision is, for now, out of the mergers and acquisitions business. It has completed selling off its Optimum West systems to Charter and plans no further expeditionary buyouts in the near future. Instead, the company intends to focus on its business in the northeast. Dolan acknowledged the company is a likely acquisition target, most likely by Charter or Time Warner Cable.

Dolan currently shows little interest in selling out what is and always has been a family affair. Chuck Dolan, 86, founded Cablevision and still offers almost daily advice to his son James, who now runs the business. James also appointed his wife Kristin to lead sales, marketing and product management, with questionable results.

Some other highlights from the second quarter:

• Cablevision has enhanced its Remote Storage DVR product, now providing two tiers: 160GB and 500GB. Customers can record up to 10 channels at the same time. The service is available on customers’ existing set-top boxes;
• Last month, Cablevision announced an increase in our broadband data speeds;
• Wi-Fi remains a major priority for Cablevision and customer usage of its wireless network continues to grow. More than 1 million customers have used the service over more than 90,000 access points;
• Price increases were critical for Cablevision’s revenue growth this year. The company booked increased revenue from a broad-based $5 broadband rate hike implemented in January as well as a “sports programming surcharge” initiated earlier this year. The average subscriber that buys a package including cable television pays $5.49 more this year than last — $162.42 a month.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WSJ Future of Cable TV 8-5-13.flv[/flv]

The Wall Street Journal sat down with Cablevision CEO James Dolan, discussing the future of the business as the industry watches another cable television programming dispute between Time Warner Cable and CBS.  (5 minutes)

Netflix kicks off the summer rating the streaming video performance of some of America’s largest ISPs, and the results deliver only a few surprises.

Google Fiber is the runaway leader, but Verizon FiOS — also a fiber-based network — is lagging behind several cable operators, notably Charter Cable and Suddenlink.

In mid-June, GigaOM reported Verizon was engaged in a battle with Cogent — a bandwidth provider Netflix depends on to help it reach Verizon customers.

Cogent promptly blamed Verizon for the slowdown:

Cogent and Verizon peer to each other at about ten locations and they exchange traffic through several ports. These ports typically send and receive data at speeds of around 10 gigabit per second. When the ports start to fill up (usually at 50 percent of their capacity), the internet companies add more ports. In this case, through, Verizon is allowing the ports that connect to Cogent to get crammed. ”They are allowing the peer connections to degrade,” said Dave Schaeffer, chief executive officer of Cogent said in an interview. “Today some of the ports are at 100 percent capacity.”

“Think of it as the on-ramp to the freeway being log-jammed,” Schaeffer said. And that means your Netflix content, especially content sent by Netflix’s content delivery network, slows down, and you get pixelated pictures and buffering.

Verizon just as quickly shot back at GigaOm and Cogent:

Cogent is not compliant with one of the basic and long-standing requirements for most settlement-free peering arrangements: that traffic between the providers be roughly in balance. When the traffic loads are not symmetric, the provider with the heavier load typically pays the other for transit (see our ex parte filing [PDF] from the 2010 Comcast/Level 3 spat for more info on peering and transit agreements). This isn’t a story about Netflix, or about Verizon “letting” anybody’s traffic deteriorate. This is a fairly boring story about a bandwidth provider that is unhappy that they are out of balance and will have to make alternative arrangements for capacity enhancements, just like any other interconnecting ISP.

Customers don’t care. They just know their efforts to watch Arrested Development are being stymied, and Netflix’s June ISP results illustrate the degraded performance customers are getting.

Cablevision, the top performing cable operator, can likely thank its recent investments in network upgrades for improved performance, not its participation in Netflix’s OpenConnect Content Delivery Network, designed to improve streaming performance for participating ISPs. Cablevision is a member, but so are Frontier Communications (#14) and Clearwire (#17 and dead last).

OpenConnect couldn’t help Frontier DSL or Clearwire wireless customers achieve good results — the technology in use and the upstream connections both companies maintain with the Internet backbone mattered much more.

In general, fiber performs best when everyone is getting along, cable comes in second, DSL third, and wireless last.

But if you want the best performance possible, and Google Fiber is not in your neighborhood, your best bet is to move to Sweden, where the top-six providers all outperformed every American cable, DSL, and wireless provider. In Finland, the top-four beat everyone but Google Fiber. The nine best-rated ISPs in Denmark also outclassed their American counterparts, while in Norway a half-dozen providers did better.

But many ISPs in the United States can still be proud: the top eight beat Mexico. Mediacom, AT&T U-verse & DSL, Bright House, CenturyLink, Windstream, Frontier, Verizon DSL and Clearwire have some work to do… if they want to keep up with those speed mavens in Guadalajara.

Moffett

A consolidated cable industry envisioned by Dr. John Malone, currently bidding for a merger between Charter Communications and Time Warner Cable, would feature widespread usage caps and usage billing and could obliterate competition from over-the-top online video providers, predicts a cable industry analyst.

Craig Moffett, now out on his own as co-head of independent Wall Street research firm MoffettNathanson, says broadband usage pricing is the sleeper issue of the last five years.

“I’ve written for years that [usage based pricing] is the single most important issue in all [the telecom sector],” Moffett said in an interview last week. “I’ve always been amazed by how little attention people have always paid to the issue.”

The Street reports that a unified cable cartel limiting consumer access to the Internet or more importantly monetizing that access would immediately devastate streaming video competitors including Netflix, Amazon, YouTube and Hulu.

If usage based pricing were implemented across the cable industry tomorrow, Moffett believes Netflix’s subscriber base would immediately fall from 30 million to 10 million. Nascent video players like Intel and Apple would likely find their business plans untenable, and some analysts believe the sweeping price changes would probably end the shift towards integrating streaming technology into large flat panel television sets.

Consumer backlash

Moffett says the impact would be broadly felt. Other analysts predict it could cause a national consumer uprising, especially at a time when other countries are swiftly moving to get rid of usage limits and consumption-based billing that have never been popular with customers.

“I think it will become clear that over the summer the window may have already closed for the cable operators to move to a usage based pricing theme,” Moffett said.

The Federal Communications Commission has done almost nothing about the issue of usage caps and usage pricing. Former FCC chairman Julius Genachowski even applauded the unpopular price scheme, calling it an important innovation.

Customers call it something else, and an uproar from consumers and competitors alike could overshadow the broadband successes of the Obama Administration. It would represent “a laughable setback for the nation’s communications infrastructure,” predict increasingly pessimistic Wall Street analysts concerned about the inevitable backlash.

The Street:

In a new broadband pricing regime, regulators would have to condone what consumers and competitors would immediately recognize as anti-competitive. Meanwhile, immensely popular content providers such as Netflix, Amazon Prime, Hulu, YouTube and the like would have to lose a Washington lobbying battle to the interests of cable monopolies, their arcane billing and off shored customer service.

Hollywood and broadcast networks would lose marginal new content buyers such as Netflix. Tablet makers such as Apple, Google, Samsung and Amazon would see the value of their fastest growing products put at risk.

Most importantly, it would be an affront to one of the few clear consumer victories for the Department of Justice in the Obama administration.

Again with the domination and control thing.

Dr. John Malone is wasting no time reacquainting the cable industry with the kinds of classic power plays he used while running Tele-Communications, Inc. (TCI), then America’s largest and most powerful cable operator. Malone’s latest salvo: proposing new broadband pricing schemes that run afoul of Net Neutrality by charging consumers higher broadband prices if they watch online video services like Netflix.

Malone, increasing his influence over Charter Communications before launching the next wave of cable company consolidation, implied the industry is hurting from the lack of power and dominance it used to enjoy when it had an unfettered, territorial monopoly back in the 1980s. Malone told an audience at the annual shareholder meeting of Liberty Global he advocates getting the industry’s mojo back by returning to “value creation” pricing models — code language for new ways to charge customers higher prices or add-on fees.

Malone sees raising prices for Internet service key to bringing the industry back to the golden profits it used to enjoy selling television subscriptions, even as customers faced massive rate increases that doubled, tripled, or even quintupled rates for certain services.

Malone’s assessment of the eight current largest cable operators wiring the country: Snow White (Comcast) and the Seven Dwarfs (Everyone Else). The disorganized agendas of various cable operators are troublesome to Malone, who wants the industry to act in lock step with a unified, cooperating voice. Consumer groups call this kind of friendly cooperation “collusion.”

Malone also thinks it is time to discard reliance on cable television to bring home the revenue and profits Wall Street expects. The industry should instead turn its earning attention to broadband, a product few Americans can live without. Malone believes the cable industry is not only positioned to control content distributed on its TV Everywhere online video platform for authenticated cable subscribers, but also have a say in competing content from Netflix, among others, which are totally reliant on the broadband pipes provided by ISPs.

With Netflix consuming a growing percentage of cable broadband resources, and possibly contributing to cable TV cord cutting, Malone does not advocate crushing its competition. Instead, he wants a piece of the action. How? By demanding online video providers pay for using cable broadband infrastructure. Consumers also face surcharges on their broadband accounts if they watch online video services like Netflix, Amazon, YouTube and other over-the-top-video. Malone also advocates the implementation of Internet Overcharging schemes like consumption billing and usage caps.

Malone’s “world of the future,” is, in reality, not much different from AT&T’s 2005 proclamation that use of AT&T’s broadband pipes should come at a cost to content producers.

Then-CEO Ed Whitacre’s public statements fueled support for Net Neutrality, which forbids broadband providers from traffic discrimination techniques like charging extra for certain content or artificially degrading service for producers who refuse to pay.

Malone’s incendiary ideas may be letting too much of the cat out of the bag, say some observers worried Malone’s rhetoric will remind people he was once labeled “the Darth Vader of Cable.” His statements could attract unnecessary attention that could be used to organize opposition.

Last week, the Wall Street Journal reported that broadband providers and content producers were already secretly cutting deals to exchange bandwidth for money without the public scrutiny Malone’s comments will generate.

The newspaper reports some of the biggest Net Neutrality proponents around, particularly Google, are quietly paying millions to large cable companies to guarantee their content reaches customers as quickly and smoothly as possible.

Among the top recipients: Comcast, which collects $25-30 million a year and Time Warner Cable, which nets “tens of millions of dollars” from Google, Microsoft, and Facebook.

The payments are buried in the murky world of “interconnection agreements” governing the backbone pipes carrying huge amounts of web traffic from popular websites and those owned by large telecom providers. Originally, content and broadband providers agreed to peering arrangements that would trade traffic without payment to each other. But as bandwidth-heavy online video began to turn those shared connections into lopsided floods of movies and TV shows headed into subscriber homes against a trickle of content coming back from broadband customers, the cable and phone companies began crying foul.

Netflix has so far navigated around paying Internet Service Providers directly to support their video content. Instead, it is building its own specialized content distribution network intended for ISPs to more effectively and efficiently deliver high bandwidth video. Connections to the Netflix network are free of charge to participating providers, but many ISPs are demanding to be paid.

Some content providers are fearful if they don’t pay, the free “peering” links will become hopelessly overcongested and slow web pages and services to a crawl.

For Verizon customers, that may have already happened as Netflix streams began stuttering and buffering earlier this month.

Cogent, which supplies Verizon with a considerable amount of Netflix traffic, immediately pointed the finger at the phone company for artificially degrading the Netflix viewing experience. Verizon promptly shot back:

Cogent is not compliant with one of the basic and long-standing requirements for most settlement-free peering arrangements: that traffic between the providers be roughly in balance. When the traffic loads are not symmetric, the provider with the heavier load typically pays the other for transit. This isn’t a story about Netflix, or about Verizon “letting” anybody’s traffic deteriorate. This is a fairly boring story about a bandwidth provider that is unhappy that they are out of balance and will have to make alternative arrangements for capacity enhancements, just like any other interconnecting ISP.

Cable giants like Malone see the battle as one the cable industry will have a hard time losing, because it is the only technology present in most communities that can handle the traffic and the growing demand for faster speeds.

Cable operators think content companies have a license to print money, especially since their success is built partly on broadband networks they don’t own or pay for delivering content to customers. At the same time, content companies fear they could be forced out of business if the cable industry decides to give itself preferential treatment.

[flv width=”504″ height=”300″]http://www.phillipdampier.com/video/WSJ Paying ISPs to Move Content 6-20-13.flv[/flv]

Reporters from The Wall Street Journal discuss the secret payment arrangements between content producers and some of America’s largest ISPs. (4 minutes)