Behind the 8 ball.

Intel’s plan to launch a competing virtual cable television operation delivering programming over existing broadband connections is dead and the cable industry has tentative plans to bury the technology overseas.

OnCue was to feature dozens of popular cable networks and a large library of on-demand content using hardware that combined live, on-demand, and streaming video. The service was supposed to be up and running this year, but despite months of talks, Intel was unable to announce any significant carriage agreements with major cable networks. Cable programmers were reportedly fearful of alienating their biggest customers — large incumbent cable, telco and satellite companies — potentially leaving networks exposed to retaliation during contract renewal talks.

The cable industry has repeatedly warned that reselling programming to streaming providers dilutes the value of those networks. The clear implication: sell to our competitors and we will demand significantly discounted rates when our contracts come up for renewal.

Intel has reportedly been shopping the remnants of the service to new buyers. A late October rumor that Verizon Communications was a likely buyer has gone unconfirmed. Today, Bloomberg News reports Dr. John Malone’s Liberty Media has shown an interest (since denied by Liberty) in acquiring the service. Other media accounts suggest Verizon and Liberty could jointly buy the service, but Malone is loyal to the cable industry and is reportedly uncomfortable doing business with a telephone company.

Should Liberty Media acquire the technology, cable companies in the United States can stop worrying about OnCue as an online competitor. Liberty Media would only deploy the technology as an advanced set-top box offered through its owned and operated European cable systems.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Is Intel Abandoning Web-TV Project 10-30-13.flv[/flv]

Bloomberg senior West Coast correspondent Jon Erlichman reports that Intel may be turning over its web-TV project to Verizon and looks at possible reasons why the company may be abandoning the project and what it could mean for Verizon. He speaks on Bloomberg Television’s “Bloomberg West.” (2:28)

With snow on the ground in parts of southern Ontario this morning, seeing beautiful beaches and bathing suits on Grand Cayman, Puerto Plata, Holguin and St. Maarten isn’t necessarily a bad thing. Devoting a cable channel to covering one Canadian airline’s ground crews might be.

Rogers Cable this week announced the takeoff of WestJetChannel, a 24/7 network capturing baggage handlers tossing luggage into the airline’s fleet of Boeing 737 aircraft. If that isn’t enough, watch gripping live coverage of airplane wranglers with light sticks pushing a plane away from the terminal.

“This is an amazing opportunity to pull back the curtain and show people what we do and how we do it,” said David Soyka, WestJet’s director of marketing. “We’re looking forward to taking viewers behind the scenes at our airports as well as to some of our most spectacular destinations, without ever having to leave the comfort of their couch. We’re always in the air — and now we’re on the air, too.”

It’s another example of “Slow TV” Rogers has embraced with open arms, adding “real-time” coverage of mundane things to your cable TV lineup.

An early example of American “Slow TV”

If WestJetChannel doesn’t fly, viewers can sink or swim with the Aquarium Channel, showing nothing but tropical fish. If that is all wet, dry off by the fire — Swiss Chalet’s Rotisserie Channel, featuring slowly roasting chickens. Unable to get away on holiday? Rogers customers could instead spend quality time with The Cottage Channel. Now they can watch WestJet take other people to the places they wish to see, but can’t afford to visit after paying the cable bill.

Rogers isn’t responsible for inventing “Slow TV.” WPIX-TV’s “Yule Log” was one of the earliest examples, treating apartment-bound New Yorkers to a roaring fire at Gracie Mansion beginning Christmas Eve, 1966. The original three-hour program was actually a 17-second 16mm film loop accompanied by a simulcast of WPIX-FM, which provided accompanying traditional Christmas music. In 1970, the original worn-out film was replaced with a 7-minute 35mm film loop shot in California and still seen today.

Norsk rikskringkasting, the Norwegian Broadcasting Company has made “Slow TV” their own, much to the delight of Scandinavian viewers.

In 2011, NRK broadcast 134 hours non-stop of a cruise ship going up the Norwegian coast to the Arctic, winning the world record for the longest continuous TV program. Millions of Norwegians tuned in. In February, it aired a 12-hour show on firewood, featuring discussions about stacking and chopping and a debate on whether the bark should face up or down. At least 20% of Norwegians watched the event.

Last Friday, Norway’s biggest broadcaster aired 12 hours of knitting, complete with needle tips and a how-to on knitting a cover for a Harley Davidson motorbike. The event started with  sheep shearing in the studios of NRK2 followed by teams furiously trying to break the world record for the fastest knitted sweater.

“You can argue that the national knitting night is the feminine response to the firewood show,” said NRK spokeswoman Sidsel Mundal.

“We’ll dive deep into the world of knitting, then from midnight, we’ll turn down the pace, if that’s even possible,” said producer Rune Moeklebust. “We’ll watch the arm of a sweater get longer and longer; it will be fascinating, but pretty strange TV.”

Who needs 5-Hour Energy when you can watch that.

The National Knitting Evening turned out to be such a ratings smash, rights for the concept have been sold to U.S.-based LMNO Productions for reconceptualization.

Norwegians celebrate “Slow TV” partly as a backlash to artificial drama generated by the reality-TV craze that has swept across Europe and North America.

Flying until Feb. 2, 2014, WestJetChannel can be found on Ch. 206 on Rogers Cable in Ontario, New Brunswick, and Newfoundland.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WestJetChannel Promo 11-12-13.mp4[/flv]

A promo for WestJetChannel, now on your Rogers Cable lineup. (0:42)

More drive-by reporting on Comcast’s usage caps.

When the media covers Internet Overcharging schemes like usage caps and consumption billing, it is often much easier to take the provider’s word for it instead of actually investigating whether subscribers actually need their Internet usage limited.

Comcast’s planned reintroduction of its usage caps on South Carolina customers begins Friday. Instead of the now-retired 250GB limit, Comcast is graciously throwing another 50GB of usage allowance to customers, five years after defining 250GB as more than generous.

The Post & Courier never bothered to investigate if Comcast’s new 300GB usage cap was warranted or if Charleston-area customers wanted it. It was so much easier to just print Comcast’s point of view and throw in a quote or two from an industry analyst.

In fact, the reporter even tried to suggest the Internet Overcharging scheme was an improvement for customers.

The newspaper reported Comcast was the first large Internet provider in the region to allow customers to pay even more for broadband service by extending their allowance in 50GB increments at $10 a pop. (Actually, AT&T beat Comcast to the bank on that idea, but has avoided dropping that hammer on customers who already have to be persuaded to switch to AT&T U-verse broadband that tops out at around 24Mbps for most customers.)

Since 2008, the company’s monthly limit has been capped at 250 GB per household. When customers exceeded that threshold, Comcast didn’t have a firm mechanism for bringing them back in line, other than to issue warnings or threaten to cut off service.

“People didn’t like that static cap. They felt that if they wanted to extend their usage, then they should be allowed to do that,” said Charlie Douglas, a senior director with Comcast.

Charleston is the latest in a series of trial markets the cable giant has used to test the new Internet usage policy in the past year. As with any test period, the company can modify or discontinue the plan at any time.

During the trial period in Charleston, customers will get an extra 50 GB of monthly data than they’re used to having. If they exceed 300 GB, they can pay for more.

“300 GB is well beyond what any typical household is ever going to consume in a month,” Douglas said. “In all of the other trial markets with this (limit), it really doesn’t impact the overwhelming super-majority of customers.”

The average Internet user with Comcast service uses about 16 to 18 GB of data per month, Douglas said.

Customers who use less than five GB per month will start seeing a $5 discount on their bills.

“We think this approach is fair because we’re giving consumers who want to use more data a way to do so, and for consumers who use less, they can pay less,” Douglas said.

Data caps are designed to stop content piracy?

The Charleston reporter asserts, without any evidence, “data-capping is a trend many Internet service providers are expected to follow in the next few years as the industry aims to reduce network congestion and to find safeguards against online piracy.”

Suggesting data caps are about piracy immediately rings alarm bells. Comcast and other Internet Service Providers fought long and hard against being held accountable for their customers’ actions. The industry wants nothing to do with monitoring online activities lest the government hold them accountable for not actively stopping criminal activity.

“It’s not about piracy, per se,” said Douglas. “We don’t look at what people are doing. The purpose is really a matter of fairness. If people are using a disproportionate amount of data, then they should pay more.”

Comcast’s concern for fairness and disproportionate behavior does not extend to the rapacious pricing and enormous profit it earns selling broadband, flat rate or not.

MIT Technology Review’s David Talbot found “Time Warner Cable and Comcast are already making a 97 percent margin on their ‘almost comically profitable’ Internet services.” That figure was repeated by Craig Moffett, one of the most enthusiastic, well-respected cable industry analysts. That percentage refers to “gross margin,” which is effectively gravy on largely paid off cable plant/infrastructure that last saw a major wholesale upgrade in the 1990s to accommodate the advent of digital cable television and the 500-channel universe. Broadband was introduced in the late 1990s as a cheap-to-deploy but highly profitable, unregulated ancillary service.

How things have changed.

Just follow the money….

Customers used to being gouged for cable television are now willing to say goodbye to Comcast’s television package in growing numbers. Today’s must-have service is broadband and Comcast has a high-priced plan for you! But earning up to 97 percent profit from $50+ broadband isn’t enough.

A 300GB limit isn’t designed to control congestion either. In fact, had she investigated that claim, she would have discovered the cable industry itself disavowed that notion earlier this year.

In fact, it’s all about the money.

Michael Powell, the head of the cable industry’s top lobbying group admitted the theory that data caps are designed to control network congestion was wrong.

“Our principal purpose is how to fairly monetize a high fixed cost,” said Powell.

Powell mentioned costs like digging up streets, laying cable and operational expenses. Except the cable industry long ago stopped aggressive buildouts and now maintains a tight Return On Investment formula that keeps cable broadband out of rural areas indefinitely. Operational expenses for broadband have also declined, despite increases in traffic and the number of customers subscribing.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

Don’t take our word for it. Consider the views of Suddenlink Cable CEO Jerry Kent, interviewed in 2010 on CNBC. (8 minutes)

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” said Suddenlink CEO Jerry Kent. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Unfortunately, Charleston residents don’t have the benefit of reporting that takes a skeptical view of a company press release and the spokesperson readily willing to underline it.

If Comcast seeks to be the arbiter of ‘fairness,’ then one must ask what concept of fairness allows for a usage cap almost no customers want for a service already grossly overpriced.

More than 5,000 residents and businesses living on the island Bailiwick of Jersey now have a choice of two Internet Service Providers – both supplying gigabit fiber optic broadband.

Jersey Telecom, a government-owned provider, has been removing obsolete copper wiring and replacing it with fiber to the home service that should reach the entire island by 2015. The fiber network is open to all competitors. JT charges £59.99 ($97.25) per month for gigabit speeds, but now caps usage at just 100GB a month. Overlimit fees are around 50c per GB between the hours of 8am-midnight. Usage is unlimited during off-peak hours.

In addition to JT, Jersey customers who live on the remote Channel Island, a British Crown Dependency off the coast of France, can now also choose Sure Jersey, a privately owned ISP that offers unlimited use plans.

The fiber optic network is spreading to other Channel Islands, with significantly populated parts of Guernsey set to receive a fiber upgrade next.

Using traditional Return On Investment standards, Jersey would barely qualify for basic DSL service. The island has a population of just 100,000 residents, some spread far and wide in remote locations. Basic DSL service was supplied to customers in more densely populated communities, but speeds were often slow and congestion became a major problem, especially at night.

The local government determined Jersey’s broadband needs could best be met by upgrading to government-owned infrastructure that private businesses could lease to sell service. Much like public roads benefit private companies that use them to transport goods, JT’s fiber network is designed to help bolster the island’s digital economy.

Since the introduction of gigabit fiber, new digital startups have launched on the island and others have moved their digital businesses to the fiber-enabled island. FeelUnique, launched from Jersey, has now become Europe’s largest online beauty retailer, employing over 150. Other businesses on the island have launched software ventures for the health care and education markets, banking/investment products and services, and 3D printing ventures. Having a wide broadband pipe has helped anchor digital businesses to the island because moving elsewhere leaves many with little better than substandard DSL or an enormous price tag for a customized new fiber build.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/JT Fiber Has Arrived 2013.mp4[/flv]

Residents of Jersey talk about how fiber broadband has changed their online experience. (2 minutes)

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Digital Jersey Limited – Vision 2014 from Digital Jersey.mp4[/flv]

Digital Jersey released this video showing the group’s vision on how to leverage gigabit fiber broadband to boost the island’s digital economy in 2014. (3 minutes)

FiOS Have’s and Have-Nots

Despite complaints earlier this month from Boston Mayor Thomas Menino that Verizon’s latest ad for FiOS was filmed in Boston — a city that lacks the fiber optic service, not every Massachusetts community is so unlucky.

Stop the Cap! reader John C. wrote to alert us that the town of Raynham will get Verizon FiOS service despite Verizon’s long-standing intention not to further expand the fiber service outside of areas already committed.

It turns out Verizon’s partial buildout of fiber optics in the area was reason enough for Verizon to complete wiring Raynham with fiber and seek a formal franchise agreement from the town’s board of selectman. Phil Santoro, a Verizon spokesman, noted the company did the same thing a year earlier in Medford.

Raynham residents will be able to buy voice, data, and television service from Verizon, in direct competition with Comcast.

Verizon plans to offer residents FiOS TV service, FiOS Internet service and the FiOS Digital Voice unlimited calling plan starting at $89.99 a month, with a two-year contract.

Meanwhile, the city council of Quincy is desperately seeking cable television competition after hearing complaints from senior citizens they can no longer afford Comcast’s prices.

The city council has repeatedly reached out to Verizon in hopes the company will bring FiOS to town, but to no avail.

Comcast is in the seventh year of its 10-year franchise agreement in Quincy and is unlikely to change much when it requests a renewal.

City Solicitor James Timmins believes the reason Verizon isn’t interested is the fact “it costs the company about $1,500 to hook up each home.” Timmins also claimed “Verizon knows that in a few years FiOS (TV) is going to be obsolete.”