Archives for April 2009

It’s refreshing (and validating) to have a prestigious news organization like the United Kingdom-based Economist, write an article that supports the position I (and many others) have taken that ISP bandwidth caps and authentication are nothing but control measures to protect Cable TV revenues.

This past week, the Economist published this article about what’s happening in the United States as it pertains to the explosion in internet video viewing and the threat this poses to cable companies and started off like this:

“IN THE land of free enterprise and the home of discount shopping, there can sometimes be an appalling lack of competition. High-speed access to the internet is one. Cable television is another. The reason is that in America cable-television companies, which provide a lot of the high-speed access, do not want their customers to cancel their contracts and watch television over the internet instead. (SB: my emphasis).”

The article goes on to discuss what’s happening, how the cable companies sell bundles — sometimes with 100 channels or more — though the average consumer watches only 15. Now that we have an unprecedented ability to watch online TV, movies, video podcasts, and rent from Netflix or iTunes, many of us are asking a fundamental question: why do we want to continue to pay for what we don’t need or want?

The author does, in fact, cut to the chase and get to the essence of what’s happening (which I explained at length in previous posts):

“Consumers’ new-found freedom to choose has struck fear into the hearts of the cable companies. They have been trying to slow internet television’s steady march into the living room by rolling out DOCSIS 3 at a snail’s pace and then stinging customers for its services. Another favourite trick has been to cap the amount of data that can be downloaded, or to charge extortionately by the megabyte.”

PUT DOWN THAT REMOTE FOR JUST A MOMENT and connect NOW with the Minnesota Ultra High Speed Task Force members and let them know why and how this issue matters to you.

The Task Force needs to hear from you. They’ll be making their recommendations to the State Legislature this Fall and key portions of those recommendations are being formulated as you read this post. If they don’t hear from you and soon, they’ll never know an open, unfettered internet matters as much as we online participants do.

Minnesota Ultra High Speed Task Force Member Emails (full contact info here). Task Force chair, Rick King, has asked that all email correspondence be directed to Diane Wells (email) as she’s compiling them and releasing a daily digest to the members.

Having information and facts at-your-fingertips about the internet and web is absolutely critical whether you’re a startup needing content for your pitch, a marketer needing to understand a 40,000 foot view of trends, a corporate user needing to understand mobile access to the ‘net or international usage, or if you’re just someone like me: an info-junkie who needs a constant data fix in order to constantly track what’s hot and what’s not.

This report is put out by the Progress and Freedom Foundation, an organization that is a “…market-oriented think tank that studies the digital revolution and its implications for public policy. Its mission is to educate policymakers, opinion leaders, and the public about issues associated with technological change, based on a philosophy of limited government, free markets, and individual sovereignty.”

“PFF’s research combines academic analysis with a practical understanding of how public policy is made. Its senior fellows and other scholars are leading experts in their fields, with distinguished careers in government, business, academia and public policy. Its research is substantive, scholarly, and unbiased.”

Covered in the report are these key areas:

1. The Growth of the Internet
2. The Hardware Sector
3. The Communications Sector
4. Digital Media
5. Electronic Commerce
6. Threats to the Digital Economy
7. The Worldwide Digital Economy

One of the best parts are the active links in each chapter’s EndNotes which allow you to drill down into many areas covered within this report.

Here is the download page and a direct link (PDF).

Are you enjoying the ability to watch TV shows and movies streamed through the internet to your computer or media center with the likes of Hulu, Joost and all the others? If the cable companies and other network providers have their way, your connection will need to be “authenticated” — verifying that the location of your internet connection also subscribes to cableTV — before you’d be able to watch video through your internet connection.

Like most strategic moves, this ‘authentication’ one seems benign on the surface. One provider, Comcast, is positioning the use of authentication only for their Hulu knockoff, Fancast, rather than for the competitive sites like Hulu itself. The way that authentication would work is that you’d start streaming a cableTV subscriber-only show or movie to your computer or media center, but then find that it would only be accessible to you if you also had a cableTV subscription!

How benign is this strategic and likely anti-competitive move? In my view, it’s not benign at all but rather setting the stage for the next phase of video delivery — already begun through the internet and accelerating rapidly — and for those who already control your internet connection to be in charge of what content can be delivered and whom can deliver it.

GigaOm‘s Chris Albrecht wrote a solid article here for BusinessWeek and Will Richmond dug a little deeper in this one on VideoNuze. Albrecht pointed out the following which I immediately saw as the most likley rationale for cable companies and others to move forward with authentication as one of the first control measures for video delivery over the internet:

Multi system operators (e.g. cable companies) pay networks big fees to carry programming, and as such are unhappy that networks are turning around and putting that content online for free. The result? Cable and media companies like Comcast (CMCSA) and Time Warner (TWX) are developing plans that require viewers to prove they have a subscription to an MSO before they can watch video online. Comcast is calling its plan “On Demand Online” and Time Warner’s is dubbed “TV Everywhere.”

So why am I concerned about the possibility that the MSO’s are trying to muscle their way in to internet delivery of video? How about the fact that my new Mac mini media center has exploded our use of streaming video and opened my eyes to the dizzying array of video channels, new offerings from services like NetFlix ($8.99 to stream hundreds of movies instantly), and amazing, innovative and quality tech channels like Revision3?  Also, why does this strengthen my belief that the Minnesota Ultra High Speed Broadband Task Force must recommend regulations for all MSO’s to our State Legislature this fall?  …  [Read More…]