Cox’s Video “On Demand”— Cable’s IPTV

This week Cox peppered the mailboxes of local subscribers with the announcement of its new “On Demand” service. This is Cox’s version of an IP-based video networking service. It allows you to buy, or in some cases stream for free, online videos and movies without waiting for the item to come up in A time slot. Also included is the ability to pause, rewind, and fast forward. It is a walled-garden variant of the internet video that is an increasingly large share of the open internet’s usage.

No less than Microsoft’s Bill Gates recently said that he thinks that Internet Television is the coming thing:

In the years ahead, more and more viewers will hanker after the flexibility offered by online video and abandon conventional broadcast television, with its fixed program slots and advertisements that interrupt shows…

(Ironically, Microsoft’s major effort in the direction of IP video has been to supply the software that allows the phone companies to eliminate theses advantages and make their IP product mimic conventional cable offerings disadvantages.)

Things are changing so fast in this area that it is hard to figure out just who is playing and what they are offering that is different from their competitors. A partial list would have to include YouTube and its copycats, Netflix’s innovative variant, iTunes, legal download services, gray P2P download agents like LimeWire, and the phone companies’ “we are just like standard cable (not legally though!) version–like AT&T’s U-verse which is not available in places like Lafayette. Some are ad-supported. Some are subscription models. Others are a purchase–temporary or not. Some let you watch as the video downloads. Among other interesting innovations Netflix’s subscription model doesn’t worry about any unit but time. Watch bits of 4o films for 120 minutes or watch one 2 hour movie–its all the same to Netflix.

I’ve touted what I call DV (Downloadable Video) as the final resting place of all such turmoil. For my money we’re headed for a place where consumers have total control and all intermediaries–such as cable companies and various distribution networks get themselves “disintermediated”–that is, cut out of loop when people buy their video content direct from the source and download it over the net. Ad-supported streaming will likely find a stable place in the mix, I’d guess. This will be a good thing

And it will be a good thing for the long-term stability of LUS’ eagerly awaited fiber-optic network. Bandwidth will be king and LUS will have bandwidth to burn and will be in a position to set the price in the local market.

With the deployment of “On Demand” services (no “Acadiana” link yet) in Baton Rouge and Lafayette this month (its been available in larger cities for a year or two according to the Baton Rouge Business Report) Cox serves notice that it intends to compete in this potentially bandwidth-demanding arena. The On Demand service is interesting and, I think, valuable to Cox customers. It should build an appetite for more flexible television viewing. What Cox has to hope is that it can stop that appetite from growing into the demand for the real thing: the absolutely unconstrained “on demand” world of the internet and DV. Cox falls short of the real thing in that it is presenting you with a classic “walled garden” (also) in which Cox decides what your choices are–and it only chooses those things which lend it visible profit. AOL’s experience with limiting the content available on the internet in a bid to profitably control its subscribers has shown that to be a doubtful strategy in the long haul. As long as consumers experience this new service as an improvement over regular cable TV (and it is) and not as constraint on their choice (which it also is) they will likely be happy with the new service.

There’s plenty to be happy with: You can watch the shows offered whenever you want. That’s probably “good thing” one through five. You can also pause, rewind, and fast forward. You are essentially accessing an online DVR. Rewinding is pretty addictive too. TiVo users and other DVR users have learned that you can rewind to find out what a character actually muttered at a crucial moment or settle arguments over what happened in the background of a shot. If you’ve never had the capacity before it may sound minor–but if you’ve grown used to it at home you’ll find it hard to tolerate TV’s that are “broken.” There are some awkward pauses in the process; after all you are communicating with an upstream server, not a local device. And the interface–well the delay is emphasized by a screen design that requires multiple directional clicks to accomplish the simplest navigational task. (Lovers of TiVo’s slick interface will find themselves continuously irritated.)

But the awkwardly implemented online DVR is still an online DVR–a good thing compared to standard cable.

If you’ve got Cox you can navigate to channel one and play around using your Cox remote. You really should try it–I have to say I think you will find it intriguing and useful.

Best of all the DVR is chock full of pretty good or at least intriguing stuff. It’s a place where Cox is trying all the models for making a buck. There are subscription sections, ad-supported free bits, and pay per view models. There are all sorts of content from YouTubish video to online personals, to movies, to exercise videos, to episodes of some series, to…you get the drift. A little of everything that could possibly be sold.

There is a largish “free zone” which covers a hodgepodge of short content and current episodes from some of the non-premium channels like Nickolodean and the Cartoon Network. Some of it looks to compete with YouTube. Some of it is preceded by an ad. (Incidentally, nobody has bothered to change the interface on this “free” section. You have to “buy now” a $0.00 cost item. Ignore the mess and realize that providing anything for free is not a part of the way the system designers think.)

Of course you can rent movies–fairly recent ones are included and they appear to be available for 24 hours after purchase. (You’ll notice that you’ll have fewer “channels” of pay-per-view movies. Apparently that was where at least some of the bandwidth to run this service came from.)

If you subscribe to a premium movie channel it looks like you can watch at least some of the current set of movies through this service at no additional charge. That could be very convenient, especially if you don’t already own or rent a DVR. (If so you should definitely try it out for a taste of what the DVR noise is all about.)

Don’t miss at least the idea behind the anime “channel.” There you can download episodes from some of Japan’s most popular animation series. You have to subscribe to the channel just like it was a premium channel. But the anime channel is never available on the regular cable lineup. It’s easy to see the potential here to serve small but passionate audiences. Surely there is a group that would eagerly pay to see an international soccer channel or an all-cycling channel. Or a dozen other passions. If you’ve got the bandwidth to serve it this could be a way to catch a lot of people a few at a time.

But bandwidth is the issue around which this all revolves. I’ve tinkered with the service this morning and I’ve been unable to get in twice (Network Unavailable) and stopped 4 or 5 times (Network Busy 01 and 03). Sometimes the stop matures into a full-scale failure as you get timed-out off the service and thrown back into regular cable. No doubt Cox is trying to work the kinks out. The network will improve. But I assume that they thought they had it under control before the mail advertisements were sent out. No doubt what is happening today is due to the load on their servers–or on local bandwidth constraints in my neighborhood–being more than they anticipated. People are trying it out–and the system is not responding well. The more popular this service proves the more bandwidth they will have to feed it. Cox has already had to cannibalize the Pay-Per-View area. Were I their engineers I’d worry that the designers and marketers would be too successful–that people with HBO and Cinemax would start choosing to watch more of those movies simply because they are now easier to fit into the public’s schedule–and that they’d watch all of them on the bandwidth-devouring “On Demand” portion of my network. (Local users will recall that when Cox brought in VOIP many users complained that their internet connections slowed way down. I’d be interesting to hear from any users that have noticed slow-downs in their net connections over the last month as Cox brought this network on line–and any slowdowns you notice as people begin to use it. The bandwidth has to come from somewhere and the temptation to occasionally steal a bit off the “unused” portion of already IP-ready bandwidth used to supply net users would be strong. After all you are only guaranteed “up to” your bandwidth.)

All in all “On Demand” is a good thing for local consumers’ quality of life and something that will both drive bandwidth demands upward and give people a taste for how things could be if we had enough bandwidth to go the full route, get out of Cox’s walled garden, and download any video we desired to our TV, mobile, or laptop. The final act will be fiber to the home. That day is coming.

“Local governments: FCC not playing fair”

BusinessWeek (yes, Business Week!) carries a story that at least admits that local governments have reason to be peeved at the tag team game being played on them by the FCC and the big phone companies. It’s germane to yesterday’s call to write Senator Vitter about corporate attempts to federalize the video franchise issue. Take a look for as good a background on the story as I’ve yet seen in the mainstream media.

Why should you care? To repeat a bit from yesterday’s post: “At stake for you: millions of dollars in local revenues, access to truly local channels like AOC, protection against your neighborhood being “redlined” out of new technologies if it’s not rich enough, and the principle of local control of locally-owned resources.”

A taste of the BusinessWeek article:

…opponents of the FCC’s action say the new rules amount to a “federalization” of the cable franchising process. They contend the change will mean a loss of local oversight, fewer dollars for public and government access channels and the possibility of “cherry picking” by companies that choose to serve only the richest neighborhoods.

Much of the article is occupied tracing out a Florida local franchise negotiation used by the FCC to (unfairly) tar local communities as making outlandish demands. Local communities have reacted with outrage to such reports, claiming that the FCC uncritically accepts what are at best decptive claims by the corporations while ignoring contrary evidence from local communities. While the reporter fastidiously avoids drawing its moral the retelling of the story makes it clear that, in that case at least, the FCC accepted and promoted a lie when it confidently asseted that a demand to provide “math lesson” had been made of Verizon. No “demand” that the phone company supply math lessons was ever made. A video setup for recording such was in a list of possible benefits from the contract. Interpreting a state-required “wish list” as a demand merely indicates that phone company doesn’t competently understand what Florida law requires in local franchise negotiations. No (video cameras for) math lessons were ever mentioned during actual negotiations. The Verizion report that such a demand was made was at best incompetent and misleading. The FCC chair’s repetition of it is, at best, willfully ignorant. (When asked whether they check such stuff the answer was “No” followed by excuses.) And the Verizon representative’s willingness to affirm the FCC’s mistake is craven.

This sort of confident, self-congratulatory, mutual backscratching between regulators and the regulated at the expense of local communities is precisely why you don’t want to Federalize local matters.

Action Item: Vitter, the FCC, and Video Franchising

Lafayette folks and sympathizers; here’s an opportunity to engage in a little responsible citizenship by writing Congress. The FCC is slated to get a grilling from the Senate Commerce Committee this Thursday and Louisiana has a Senator, Vitter, that sits on the committee. Write him; tell him you want real questions asked; tell him you’d rather see him and his colleagues set public policy instead of the bureaucrats at the FCC (and that in ANY case you’ll hold him responsible–no buck-passing to shadowy bureaucrats).

While LPF is a proudly local blog, some issues that effect us are inescapably national–and some are decidedly not national but are in danger of being nationalized. The video franchise “issue” is one such issue. We’ve covered this ad infinitum (e.g.: 1, 2, 3) on this blog so I’ll be mercifully brief today: this is a local issue–at its root, self-serving rationales scraped aside and ignored, there is one basic story: large corporations like AT&T/BellSouth want to enlist the power of the national government (and failing that the states) to seize the value of local ownership of rights of way and force these local owners (YOU) to give the use of that property to the incumbent telecomm corporations on terms dictated by those corporations. At stake for you: millions of dollars in local revenues, access to truly local channels like AOC, protection against your neighborhood being “redlined” out of new technologies if it’s not rich enough, and the principle of local control of locally-owned resources.

It is dead easy to be against this usurption and so-called conservatives like Vitter ought to be in the forefront. He, like too many national Republicans, hasn’t had to choose between the principles he claims to be committed to and the immense corporate support the telecomm industry throws their way. What’s missing in this equation is YOU. Call him on it. Telecomm policy at the national level is rapidly evolving into a partisan issue and it need not and should not be that way. National competitiveness, Local Control of local resources, and responsible oversight of semi-monopoly industries have historically been at least as strongly supported by Republicans as Democrats. But without the public calling them to task the temptation to take the money and ignore the issue — and the principles involved — is apparently too hard to resist.

If you’re interested here is a little context for the hearing: The FCC is chartered to protect the consumer and to responsibly manage the use of the public airwaves. It has turned into a bureau that has ceded property rights to mere license holders and has abandoned princples like “equal time” and the idea that licenses are granted not for money alone but for the promise that the holder will serve the public good. Congress needs to demand that the FCC reassert public ownership of the public airwaves. Congress needs to reassert itself as well as the body that makes public policy. Congresscritters should be outraged (and some are) that the FCC has taken it upon itself to put forth a rule about a national video franchise that Congress itself could not pass when telecomm’s allies were in the majority.

The last time I saw hearings on the video franchise issue Vitter sat silently. We need to encourage him to ask real questions. And to be willing to vote in our favor.

You can piggyback on SaveAccess‘ tools to express yourself, or, arguably more usefully, do it yourself by getting in touch as a constituent:

David Vitter
Email Form

Food For Thought: LUS’ Wireless RFP

A little more than a week ago I posted a piece about LUS’ Wireless RFP (request for proposals) and asked a few questions. Since no one else answered them I decided to go down to City Hall and pick up a copy for myself.

For those who might have missed the story, LUS put out a call for proposals to supply what was described as a wireless network for LUS and city use. No mention of public access was made, though locals familiar with the way that the LUS fiber project evolved from purely utility purposes are reasonably hopeful that a wireless network will evolve in the same way.

The RFP itself is pretty simple as such things go and you have to think that bidders will need to request further specifications. But there is enough there take a stab at answer the questions I asked earlier.

Note: this is an 802.11 “WiFi” mesh network. That’s the same architecture that is being used in metro wireless installations from Philadelphia to San Francisco. For the technically inclined: the hardware standard described involves two radios operating in two different bands. Specifically, the equivalent of Tropos’ most advanced access points, and its software, is specified. (Tropos is the market leader in metro WiFi.)

1. Does it include a very strong backbone “supply” element?

  • Yes, It is hung directly off LUS’s current fiber ring. –It will not be crippled by running off a wireline supply source that has less capacity than it is able to use. (The expense of providing for adequate “backhaul”–and sometimes the ability to find such at any price has been a major limiting factor in most public muni WiFi efforts.)

2. Are upgrade “hooks” part of the proposed deal?

  • Yes, the request makes it clear that there will be at least a “phase 2” (official protestations aside) and that proposal should take into account the networks eventual expansion to full coverage of the 45 square miles of the city. The access point model specified is the first of a new generation from its maker and future models in the family are promised to be interoperable with these and to support emerging technology and standards like MIMO and WiMax and older standards like public safety.

3. Does it assume ubiquitous fiber?

  • Hmmn…well maybe or at least implicitly. Nothing beyond the first layer, “phase 1” is specified. But assuming that what is described for phase 1 sets the pattern for the future it looks like the plan is to make full use of the fiber. Wireless mesh networks are built around ratios between aggregation access points that are connected to backhaul networks and simple mesh network which are only connected to other access points via wireless. Common acceptable ratios are 5 or 6 mesh nodes per aggregation point. All too many systems are using larger ratios and putting up with the resulting performance issues. A gold-plated system would use a slightly smaller number. The ratio LUS is suggesting for phase 1 is 1:1.3. That is astonishingly low and only makes sense where the wireless owner also owns the backhaul network (in our case fiber). Other users would have to pay per drop for their microwave, WiMax, T1, fiber link, or the like and such per drop costs would run up the expenses very quickly. Maintaining such a low ratio would mean deploying a system of pretty astonishing capacity. While policy might limit the bandwidth allowed, nothing in the network itself limit network speeds. They could conceivably run at near the rated speed of 802.11 protocols that underpin it–currently about 54 megs.

4. Does it use owned spectrum for local backhaul? Or open? Or fiber?

  • Fiber. This is certifiably yummy. See above.

5. Does it use open spectrum for the final connection?

  • Yes. This is a “good thing,” for it means that a multitude of low-cost hardware will be able to access the network. Proprietary spectrum has some advantages for local governments and, generally, some is available to it for various safety functions but such networks cannot be practically be opened for public use.

6. What technologies are specified….WiFi, WiMax, etc…?

  • WiFi is specified. The suggested hardware is software upgradeable.

7. What applications are supported; either explicitly or through the specification of indicative standards?

  • Support for a wide range of applications including surveillance video, voice, data, mobile communications-seamless roaming, VPN, and meter reading are in the specs.

Long story short: There is nothing here that would impede using this as the core of a very capable public wireless network. Caveat: there is no particular reason for me to assume that it will be — beyond sheer desire and my own belief that a wireless component will be necessary in the coming competition with AT&T/BS and Cox.

“Cable Confronts Bandwidth Crunch”

Light Reading reports that cable’s technical guys are beginning to get antsy about bandwidth. This is news since cable in the US has had such a clear technical advantage in the bandwidth arena over their phone fella competitors that bandwidth has been something cable guys crow over–not something they worry about.

Shaking off two years of disbelief and dismay, the cable industry has finally started dealing with the prospect of an impending bandwidth shortage.
Cable operators and equipment suppliers, alarmed by an explosion in bandwidth use by cable subscribers over the last couple of years, are now drawing up plans to boost capacity at both the headend and plant levels. Instead of debating whether the coming bandwidth crisis is genuine, they’re looking at ways to confront the crisis…

Verizon’s running fiber to the home has changed that equation that gave cable unquestioned superiority, giving one phone fella the clear advantage in potential bandwidth over all cable. And, more importantly the customer is changing. Usually all you get from industry reps and executives is the party line. What’s nice about this story is that the author talks to the tech guys at the SCTE conference. The upside is that you don’t hear the usual pablum. The downside, of course, is that just because the tech guys think there is a problem don’t mean the marketing ones do…and proverbially, its’ the marketing types that end up running the company. While the tech guys tend to worry about how to meet a demand they see growing, the marketers have to ask if there is any reason to do so.

And in markets that confront Verizon’s fiber–or homegrown alternatives like Lafayette’s Fiber for the Future or Utah’s Utopia–they do.

The issue seems to be video, video, and yet more video. HDTV takes more bandwidth than standard TV, Video on demand eats bandwidth, IPTV demands upgrades, and Downloaded Video (DV!) turns out to consume bandwidth pretty wildly. Tellingly, the tech guys don’t try and make scapegoats out of point to point technologies like the spokesfolks do. The real issue is the enormous size of video files and the bandwidth expense of providing them on a one-to-one basis instead of “broadcasting” them in streams. And the only solution is more bandwith. Even including the ultimate solution:

They’re even weighing such previously unthinkable moves as building fiber-to-the-home (FTTH) networks and adopting PON architecture, just like some of the big phone companies.

That’s news, but that’s also distant…while technicians instinctively go to the best, most permanent solution the cable guys know that they’ve got plenty of alternatives short of that. The cable plant is capable of adapting to the need in several ways but the question is, always, at what capital cost and at what cost to altering the basic business plan.

The issue of the cable’s underlying and, frankly, outdated, business plan is a real one. Cable inherits and depends on a model born in the old network period of television–a time of three networks, half hour shows, rigid schedules, and free-to-the-viewer advertising support. Cable has been instrumental in destroying the rationale for such a model — and has never ceased to benefit from presumed scarcity it assumes. They managed to get folks to accept that they’d see advertising on 200 channels of mediocre media they paid for but did not choose (a tough sell!) but it remains to be seen whether they can similarly contain the contradiction of offering a rigidly packaged product that they profit from multiple times (cable TV) beside a product that potentially cuts them out of content cash flow (the data flow of the internet).

I’ve made the claim that you ought to prefer DV (downloadable video) and this story provides a piece of evidence that the hoped for transition may be occurring—and that for cable companies the experience will be painful.

Knorr, whose cable system serves a major college town, said he’s already seeing early signs that younger consumers are opting for Internet video downloads over traditional cable video service. In Lawrence, home to the University of Kansas, 5,000 of the cable system’s 40,000 subscribers only take high-speed data service. These subscribers account for a sizable 20 percent of the system’s cable modem customers.
“Customers are using the Internet more hours per day,” he said. “There’s an absolute risk of people dropping basic video service for Internet video.”

Since selling video service is THE business that cable companies are in and its profitability accounts for cable’s comfortable position in the business world the idea that they’d have to trade that cushy, near-monopoly business for selling easily commodified bandwidth. There’s much less room for profit, and much more competitive uncertainty in that market. If you check out Knorr’s site, Sunflower Cable, you’ll find that the small cableco is “courting” this problem by offering very affordable 1o meg downloads in a student town! (At the same price point, more or less as expanded basic cable.) Locally, Cox doesn’t even offer a 10 meg alternative and the only other cablecos that do, to my knowledge, are in the northeast corridor where they compete with Verizion.

Pretty clearly, at 10 megs sophisticated users will perceive that they have a choice…and if they decide to invest in internet services instead of another 100 channels of cable the cablecos bottom line — and their business model — will suffer.


But all that is a general analysis; what does the video wave mean for a local place like Lafayette? Well there are parallels: LUS is our local equivalent of Verizon; it is willing to offer serious competition that will technically out-class the cable competition. It will have video bandwidth to spare as DV becomes the dominant force and the market starts to reform around assumptions that favor download and hence bandwidth. (If content providers, or LUS, choose to locate servers on-system users will be able to download at 100 megs, magnifying its advantage.)

Cox’s system can probably stay in the game–if it is willing to make local upgrades in response and run Lafayette’s system on a business model that imitates LUS’s advantages. But that would be a different model from the one that it uses everywhere else. That strategy would put them playing catch-up with a leader whose network resources are superior but with the advantages of being the video incumbent to slow down its market erosion. To draw even in capacity would require FTTH. I personally doubt Cox is willing or capable of making those local adaptations. I was surprised when they joined Baton Rouge and Lafayette regional systems, coordinating channels, pricing, and network architectures. That move makes adapting to a very different competitive environment in Lafayette unwieldy or even impossible without a re-separation. (Note: Cox Baton Rouge also faces local fiber in the guise of East Ascension parish’s EATel. But that local phone company does not yet threaten to overbuild into prime Cox territory the way that LUS does.) Cox is also heavily in debt through a combination of expensive acquisitions and an even more exhausting expense of taking itself private. It seems unlikely to have the free capital to do really expensive network upgrades at this time. Cox is lucky that its footprint most often overlaps that of AT&T/BS–a company with a similar debt burden.

AT&T nee BellSouth will be the also-ran here, struggling to offer a pale imitation of the two leaders’ vide products with a less capable network, me-too content, and not enough bandwidth to offer new, differentiating product categories. A purely local response to LUS is even less likely than with Cox and they are similarly weighed down with debt.

The video wave that the cable guys see coming boils down pretty simply to bandwidth. The full competitive situation, both nationally and locally will involve a plethora of other issues, including the power of incumbency, local trust, and the ability and willingness to integrate new wireless services. The outcome won’t be determined solely by technical prowess.

We live in interesting times.

‘LITE glowing nicely…’

Kevin Blanchard of the Advocate tracks the progress of the LITE center today—and it seems considerable. A sample:

Already LITE has reached agreements with several clients, including technology companies, movie production and oil and gas-related companies, Cruz said.

Because of commercial privacy concerns, Cruz briefed the commission on a few potential targets who are in negotiations with LITE for potential contracts — including an engineering firm, a telecommunications company and another oil and gas company.

If tech Lafayette is a focus of yours, reading the article will be worth the gander for the hints at what might be in the pipeline for the project and the city.

Also worthy of note:

LITE will also be opening its doors to the public every first Wednesday of the month for 30-minute tours. For information or reservations, call (337) 735-LITE (5483).

I’ve missed two perfectly good chances to make a tour. Those I know who weren’t so foolish tell me it is exciting. (3D? You ain’t seen 3D. Wide Screen? Try Immersive) Your next chance is February 7th.

BellSouth Officials Gone

A brief in the Atlanta Journal reveals that the merger of AT&T and BellSouth doesn’t include a merger of their top managers…BellSouth’s former leaders have been shown the door or are seeking their own exit.

It looks like no BellSouth veteran at the top was offered a step up or even the chance to remain at the same, national, level that they occupied in the old BellSouth.

What does AT&T know that we don’t?

BellSouth slammed by former officer

As the ads begin to run in local media trumpeting the absorption of BellSouth by AT&T folks may wonder just what is going on when one of the region’s commercial crown jewels goes on the block.

In an opinion piece titled: “BellSouth dithered and dallied, so good riddance to its memory” former VP Dick Yarbrough expresses contempt for his former company and lays out his thoughts on the takeover.

It is interesting to note that most of BellSouth’s top management was not invited to be a part of the new company. I guess the new AT&T didn’t want to run the risk of one day being subject to a takeover from Dairy Queen…

BellSouth’s life should not have ended so ignominiously. At the time of divestiture from the “old” AT&T just 23 years ago, the corporation consisted of two very strong telephone companies, Southern Bell and South Central Bell, and a game plan to compete vigorously in whatever unregulated businesses we thought would best fit our future, including the nascent cell phone business, later to be known as “wireless.”

We were located in the fastest-growing territory in the country. We had the best customers, the most dedicated employees, and the strongest financial position of the seven original Regional Bell Operating Companies. Wall Street analysts described us as “the Right Company in the Right Place at the Right Time,” and we were.

It’s true that BellSouth was once the fair-haired child of the Baby Bells. Wondering what the hell happened to the one who had all the advantages is worthwhile. But what Yarbourgh ignores is that none of the children are doing very well. Criticizing his former colleagues for failing to saddle shareholders and customers with enormous take-over debt buying into companies whose core business continues to shrink doesn’t sound all that dumb. (All the telephone companies continue to loose lines every year.)

While Yarbourgh’s criticisms have to sting, the analysis of what went wrong with BellSouth is a matter of what went wrong with the whole industry. BellSouth, as the strongest of the original clan, is simply the last to fall to consolidation as they all continue to falter. The industry’s problem was that it was and is unable to construct an adequate response to its central problem: its core business in telephony was failing. The phone companies all chose to adapt by combining two simple (and simplistic) strategies in various amounts: they bought their cell phone competition and they bought their competitors…the latter strategy purchased them false growth and the former brought real profits but missed the coming network age that offered the real opportunities.

BellSouth, as the strongest of the original groups, could have tended its garden, strengthened its network by actually building fiber back when the telecos started promising to do so, endured a few years of plummeting stock prices and emerged with a fiber-based network second to none in the world.

This would not have necessarily been a happy outcome for consumers, understand, but BellSouth would not have been a sick man in an ill industry; instead it would have been the visionary leader that built a new business context. Of course, at that time no one would have believed that the FCC and the Justice Department would have allowed the monopoly regional provider the vertical integration of services that the present administration ignores. They would have been left to offer common carriage to other users who would have provided us with video, and other new services.

Of course that is precisely what the phone people, raised on a steady diet of easy monopoly phone service income, found unacceptable — and that is why none of them ever built the promised fiber network. Their demise is sad and unnecessary. But BellSouth failed not because they didn’t buy out other failures; it failed because it didn’t have the good sense to give up a business model that had already had its day.

The Superbowl in HD?

The Ind drums up a little panic about the Superbowl. With all good Saints fans sure that this is the year the team will go to the Superbowl the yearlong dispute between KLFY and Cox concerning CBS’ HDTV signal takes on a sudden signficance: unless a deal is cut Cox won’t be carrying the game in High Definition.

In New Orleans a similar conflict between its CBS affiliate and Cox has gotten even nastier: the city might be blacked out altogether.

Before you roll over and decide that the fates just plain have it in for Louisiana you should know that you can truck down to the hardware store and get an antenna for that fancy HDTV you bought for Christmas and watch it over the air–for free–just like gramps usta do. Or you could (horrors) just watch it in analog.

As much as I enjoyed the second half of the recent Philidelphia/Saints game and suspect that, my tongue in check aside, not seeing the Superbowl in HD will really be a painful issue for some loyal fans this is not the sort of question this blog usually focuses on. But it is a useful example of how the regulatory system–meant to protect local consumers–has been captured instead by almost purely corporate interests.

In a rational world we’d expect that since the FCC exists specifically to protect local consumers and communities from the predations of corporate giants that cable companies would simply be required to carry significant local programing–and not to relegate it to second-best levels of service. The basis for judgment would have been “the public good” and what the FCC said met that criteria would have usually been done. Not so long ago something like this–a question of local carriage of important local content–would simply have been dealt with on a uniform national basis and there’d be no question about KLFY’s best signal being available to all.

Obviously, that’s not the way it is working out.

To understand why we need to look at a little FCC history.


This whole mess is the product of a regulatory system gone awry. The FCC is probably the purest case of the Reaganomics doctrine that the best, indeed only, conceivable solution to any public problem involving a commercial interest is “deregulation.” Examining the consequences of putting that idea into practice in this area is instructive.

From back in 1934 till 1984 the clear basis for making decisions about the public airways was “the public interest.” Licenses were granted and regulations promulgated based on that principle. No one believed that the public interest was anything like the same as “commercial interests” and real consideration was given to purposes that were not basically motivated by greed–for instance at the beginning it looked like 25% of the airways might be allocated to “public” stations dedicated to educational purposes. Vigorous industry opposition resulted in a compromise that lead to commercial stations carrying a set number of hours of “public interest” programming. In 1940 the FCC calmly required the breakup of NBC on the grounds that having a single dominant television network wasn’t good country. The creation of ABC and the survival of CBS was a consequence of this regulation and most sizeable markets acquired three competing stations. “The public interest” was a vibrant and enforced principle for most of the FCC’s history.

But in 1984 this basic presumption was changed when the framework for controlling access to the public airways was shifted from the idea that holding a license was earned by consistent public service to the idea that the spectrum was held as a property right granted to the highest bidder. Public auctions replaced public interest hearings and were a symptom of a new order in which a scarce, publicly owned resource was recreated as valuable private property. That ideology radically undercuts the public purpose of the FCC and its history since then has been one of retreat. Monopoly regulation has basically ceased and the requirement to present public interest programming was dropped. Even the “fairness doctrine”–which required coverage controversial issues of public importance, and required broadcast stations to present such issues in an honest, equal and balanced manner was banished. That requirement had been part of licenses since before the creation of the FCC and was based on the law that created the commission itself. But the FCC abolished it 1987. A law passed by Congress to reassert the traditional interpretation of the fairness doctrine was vetoed by Reagan in that same year.

So? So what does all this social history have to do with our (not) seeing the Saints play in the Superbowl in HD?

Patience Grasshopper….

Once we had recreated the airwaves as private property and dismissed the common good along came technology to reveal how thoroughly we’d mucked things up.

Digital happened. Digital technologies turned out to be more efficient at using the airwaves than the older analog methods and suddenly huge swaths of the airwaves were clearly, unmistakably wasted. The FCC still took its mandate to allocate the spectrum wisely seriously in the narrow sense that just not using valuable commercial property was considered a bad thing. So it set about trying to reallocate spectrum.

You’d think that’d be easy. If the spectrum is public property well, then, just allocate enough of the spectrum to accommodate the stations at digital HDTV amounts of bandwidth and take the rest back for other worthy public purposes. Oh yeah, HD technology had also arrived to muck with us more. (Note that “other worthy public purposes,” we’ll get back to it.)

But now that spectrum was effectively “owned” by its licenses and no longer owned by the public and loaned to profit-making entities in return for good behavior the FCC had conceptual troubles moving squatters off “their own” property.

The upshot was a mess of shoddy and conceptually inconsistent transition rules which allowed local television stations to choose between one HDTV or four Standard Definition TV (SDTV) digital stations. In the interim they can have both HDTV and SDTV since the FCC has gifted them with an extra channel slot so that they can run both analog and digital signals during the extended transition tine. A hard date for the transition has been set for 2009 — so stations will no longer have the luxury of broadcasting both an HD and an analog SD station. So the current conflict over dual carriage on Cox can’t last beyond that point–the 2009 superbowl will be broadcast only in digital.

At that point the station will have to choose between and HDTV signal and four standard definition (but still digital) channels. KLFY is clearly at least considering the four channel alternative and wants to lock a contract in place with Cox that will obligate Cox to carry whatever they decide to offer. (Probably more than a majority of KLFY viewers get their signal over cable. Not being carried by cable would kill advertising revenue.) Cox has demurred.

But KLFY, if it must, can force Cox to carry it by invoking the “must carry” rule. That rule requires Cox to carry every major local broadcaster’s main signal–but ONLY their one, main station. And KLFY, in order to invoke the must carry rule, has to agree not to charge anything for its station. As matters now stand KLFY would really pretty much have to choose to offer only the one, main station in HDTV. To do otherwise would put their product at a competitive disadvantage: the secondary channels, would both carry lightweight material and wouldn’t be on local cable. The main channel would be broadcasting an inferior picture to its competitors. Neither situation would sit well with advertisers who are the station’s source of income.

So…the threat of a Saints’ superbowl blackout on HD in Lafayette (likely IMHO) and the threat of a total blackout in New Orleans is all part a tangled mess of regulations that make events like the superbowl pawns in a chess game between huge corporations with both sides seeking to advance their profits and preserve their future choices. NOBODY, nobody in this equasion any longer has to worry much about the “public good” since the FCC has decided that things like public service no longer count in the regulatory game.

It’s not your airwaves. It’s their property.

Any Saints’ blackout will be due to that mistake…both local actors are just playing by the (stupid) rules made by an FCC whose ideology isn’t in align with reality. The error lies there.

(Oh yeah…Go Saints! The Chicago game is at 2:00. Don’t miss it. Light a candle, pray, send vibes, work a little voodon…whatever is necessary.)

PS: I promised to get back to “other worthy public purposes” for the airwaves. You’ll recall that this entire digital mess is motivated by the desire to reallocate the airwaves more efficiently since digital delivery used less of the airwaves to accomplish the same purposes. The newly available airwaves which will be made available will be valuable, prime real estate. (Some spectrum, like the wifi spectrum is considered trash spectrum since it is so subject to interference from little things like rain and leaves.) What will the FCC do with all that prime public property? No one doubts that they will do anything but sell it off to the highest bidder, once again creating rare, extremely valuable private property out of what days before belonged to us all.

What else could be done with it?

Oh, lots of things besides handing our property over to rich and demonstrably greedy telecom corporations in return for a one-shot cash influx destined to disappear into the federal government. They could make a real difference if they chose to think of it as a matter of the “public interest.”

For instance, they could split that spectrum between two uses:

1) Make half of it “open” like the wifi portions of the spectrum. Let anybody use it. It’s pretty clear to all with eyes that that small, trash spectrum, being left open has made it hugely valuable to public. Much more valuable to the people than any “owned spectrum.” And arguably much more valuable to the economy than any similar slice of the commercial spectrum.

2) Dedicate half of it to local units of government for use as a competing publicly-owned data network for public use. Most of the reason that wireless networks dont’ have the punch to scale up to large networks lies in the scarcity of bandwidth. This might not solve the whole problem but it would create real competition for the incumbents–something that would save the public more money and put more money to the local economy than is easy to imagine. (And would provide for a publicly-owned last mile alternative that would make “bad” net neutrality moves by the corporations practically impossible since their monopoly on the last mile would be broken.)

But nobody thinks things like this are likely to be seriously considered since the ideology of private property finds these things abhorrent. It could be different–if we cared enough to assert that the public airwaves are, indeed, public. And should be used in the public’s best interest.