Comcast’s recent launch of a 100Mbps business class service for $369.95 per month will provide a great option for small to midsize businesses, at the same time I’m troubled because the continued acceleration of broadband speeds at low prices equals even more Comcast control of our local internet broadband access. What happens when Comcast is the dominant provider in the Twin Cities of both consumer and small to midsize business internet?
I learned of this new Comcast service from my friend and Minnov8 buddy, Tim Elliott, since he’s engaged with Comcast on the marketing side for Comcast Business Services. He and I have had many spirited debates about net neutrality, speed tiers and charging for them, the profit motive, and much more.
While I’m a capitalist and strongly believe Comcast should be rewarded for their efforts delivering so many great services, I also know that they would never have been able to achieve their existing cable infrastructure footprint had it not been for governmental interventions enabling rights-of-way to be gained for Comcast (and other cable companies) back in the 1980’s and 1990’s. Though Comcast’s new rollout is a business class service, the gap between what they’re offering and what telecom companies offer is so large, it’s clear to me that business-centric internet dominance in Minneapolis/St. Paul is a foregone conclusion (unless the telecom companies instantly react with cheap T1 or T3 lines, which I doubt they will).
This speed-for-a-great-price gap will continue to grow in both the consumer and business sectors, solidifying Comcast’s lead which threatens to severely restrict the emerging internet TV marketplace and your choices as a consumer.
WHAT’S THE PROBLEM WITH MORE SPEED?
At my home I have the Comcast 16Mbps/2Mbps service and at our office we have the 50Mbps/10Mbps one. IN BOTH CASES we have NO other alternative for services that come anywhere close to the price/speed of what Comcast offers. Isn’t that the classic definition of a monopoly?
Defining a monopoly and then regulating it is incredibly hard and beyond the scope of this blog. Suffice to say that monopolistic control either slows or can even stifle innovation and this is something we care about deeply at Minnov8.
Several of my strategic concerns have been aired on my own blog, and here on Minnov8, in the posts, “Internet Providers Want Control Over Your TV“, “Sorry, No Internet for You” and “OK. Internet for You….but with CONTROL“. These discuss the level of control Comcast already enjoys and the barriers to competitive entry that are already in place strategically in order to protect their cable TV business from upstart internet TV competitors. The best example of that is their 250GB bandwidth cap which they position as an “extremely large amount of data, much more than a typical residential customer uses on a monthly basis” but a consumption level of 250GB is easy to hit when streaming video at HD resolutions.
While that sort of measurement of bandwidth consumption by consumers is true today, it won’t be for long as more and more of us watch video over the internet and on our HDTVs and the cable providers, Comcast included, are trying their best not to allow that to happen without them staying in the position of control.
STRATEGIC EXTENSIONS OF COMCAST’S MONOPOLISTIC CONTROL
So we have the 250GB cap and something called “authentication“ which is being rolled out in order to make certain you and I will only be able to watch The Colbert Report on Boxee if we already subscribe to Comcast Cable TV service. If we don’t subscribe, we’ll be unable to stream those shows through Boxee, or any other provider, over the Comcast internet service for which we pay.
This move for authentication is all about ensuring that you and I don’t disconnect our cable TV subscription and use the high speed broadband we’re buying from Comcast to watch content on an AppleTV, PC/XBox/Mac media center, or other internet streaming video box.
But what if it goes beyond controlling our internet-based TV watching, and instead sets up Comcast as a “man-in-the-middle” to also get internet TV providers to pay them as well? That’s exactly what I think they’re doing with a move to “cache” movies, TV shows, and internet TV videos in storage and servers that Comcast controls.
Since video streaming has potentially enormous negative impacts on a network infrastructure (including the internet itself), content delivery networks (CDN’s) have arrived in order to deliver media and content all over the world (e.g., Akamai, CacheFly) and minimize latency for viewing it. But those CDN’s deliver to and through Comcast’s network and Comcast has to deal with you and I streaming data to our computers or TV’s over the cable conduits they manage.
At the last Minnesota High Technology Association (MHTA) conference, I asked a question of Comcast Business Services VP, David Diers, in the broadband session in order to understand what they were doing to cache video content since that is THE missing piece in my theory of Comcast trying to wrest significant control of the streaming video marketplace.
So I asked the question of Mr. Diers at the MHTA broadband session about whether or not they were going to offer CDN-like caching services in order to make the consumer TV watching experience better. Listen to his short 1:28 response by hovering over the speaker here (or just downloading the mp3).
He talks about the huge amount of data transferred over their network and the positives of a “national fiber backbone that we control” and that they’re establishing two massive data centers: one in Pittsburgh and one in Denver in order to provide more on-demand content.
BENEFITS TO YOU:
- Faster access to streaming video content
- Potentially stutter free playback of HD content, even through slower tiers of service from Comcast
- More choices for content that Comcast would provide (though that content availability will undoubtedly prioritize Comcast-delivered on-demand programming vs. the hundreds of other options available to you through an internet connection including moves by Hulu, Apple and Google with YouTube)
BENEFITS TO COMCAST:
- Better network management of streaming video content
- The capability to offer more free and paid on-demand movies and TV shows
DOWNSIDES: There are many but to me the top ones are:
- Control over what content is available over your internet connection, which is already in place with the “authentication” scheme described above
- Charging a “pay to play” fee structure for upstart internet TV providers. If you’re one like Revision3, access to your content will likely be slow, stuttered and in lower HD resolutions unless you pay Comcast to cache your shows and/or ensure network availability. If you’re a provider of streaming media content — YouTube, Vimeo, Viddler, WordPress (with WordPress’ video) — then you’re likely to have poorer performance too. This means that if YOU are delivering streaming video content for your organization or yourself, anyone watching your stuff over a Comcast internet pipe will likely have a degraded experience
- Devices from Comcast will continue to offer laughingly poor user experiences. When I compare my Comcast cable TV box user interface, capabilities and DVR functionality, it pales in comparison to a TiVO box, my Mac mini media center (running the open source Boxee and PlexApp) and, especially, to an AppleTV.
Bottom line? If Comcast controls both your internet and TV watching services, there will be significant and tight control over what you can watch. The other is — like the telephone companies who still haven’t innovated with web browser-based management of telephony services, voicemail-to-email or other innovations “upstarts” have provided for years — with that sort of control will come content and devices which will lack innovation while stifling it as well.
It’s clear that Comcast is trying to get ahead of the curve with respect to cable TV unsubscribes as well as all the other providers stomping all over their TV delivery turf. This is one of the reasons that I believe that regulation or splitting the company in two (internet & cable TV) are options the FCC and the Minnesota High Speed Task Force should explore.
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