Category: Sunday Thought

Just Not True: Cable Rates Not Falling in Texas

Here’s something to think about:

Competition has not led to lower basic cable-rates in Texas. (MultiChannel News)

That’s the long and the short of it according to a study by the Texas chapter of NATOA.

Two years ago Texas’ Telephone companies (basically SBC (now AT&T) and Verizon) used the Texas legislature’s famous penchant for failed deregulation to initiate a national push to move control of cable franchise from local communities to the state. The phone companies’ purpose was to avoid the demand that cable companies serve the entire community—and not just the most profitable part–if the companies wanted to use the right-of-way property owned by the community to turn a profit on the people living there. Local counties and municipalities consistently insisted on this principle….and the new state “regulators” (deregulators) do not. Louisiana dodged a bullet last year when Governor Blanco vetoed a similar bill approved by our legislators.

The Texas legislators were promised that they’d see “competition” and dramatic reductions in prices in exchange for removing local government’s ability to determine what is done with local property. And as the phone company juggernaut rolled through state legislatures they promised state after state the same — and told them it had worked in Texas, the first state in the union to enact such a law. They told that story about the success of competition in the halls of Congress as well. It was easy to believe; after all everyone knows that competition brings lower prices.

Except it hadn’t worked. And it still isn’t working….

You can take a look at the data gathered by the Texas chapter of NATAO. What is clearly shown is that the cable companies are not lowering their rates to compete with Verizon and SBC/BS/AT&T’s very limited rollout.

This is very similar to the disappointment that has accompanied the fashionable deregulation of electricity in a number of states. The data shows that the electricity is cheaper in the regulated states–and the gap is growing.

What’s wrong with picture? Why hasn’t “competition” worked? Legislators across the nation have endorsed the politically correct argument raised by the monopoly corporations that owned the electrical and telecom wires and bet their citizen’s money on the faith that deregulation would lead to falling prices. They, and their constituents, have lost that bet. And a whole lot of people are trying to make sure that the public does not notice.

Here is a hard truth: The blind faith that “deregulation” leads to true price competition is a false faith. In natural monopoly markets regulation–or public ownership–is the only real way to establish fair prices. Utility markets are monopoly markets…and giving the monopolists free reign won’t lower prices–quite the contrary. Utility deregulation is a failed experiment.

It is something the country as a whole ought to be thinking through rationally. The honest solution is to reinstitute real regulation where markets don’t work. Most places don’t have the resources to resist the drain on community wealth that private energy utilities and private telecommunications utilities represent. But a few communities, like Lafayette, can choose to opt out of the mistakes that the rest of the country is making. Lafayette has done so and will have its own locally-regulated power and telecom utilities.

Lafayette made the right choice on July 16th two years ago.

Joost

We are in the final days…of TV1.0. The signs are everywhere. Most recently, I received an invite (thanks to a sympathetic reader) to beta test Joost–a combo software client and web-based content library that allows the user to demonstrate for themselves that the old way of doing things is numbered.

TV1.0 is the familiar old broadcast model of one broadcaster sending to many, passive “receivers.” TV stations send their signal out and we sit and watch it. Defined by limited spectrum, there were only a few channels, shows appeared in their set time slot, for the defined number of minutes less the minutes devoted to the ubiquitous ads. Shows are designed to appeal to the broadest number of people and offend the fewest. Cable changed very little except that it gave you more channels. PBS introduced the idea of voluntary subscription support–but remains in other ways locked into the broadcast model as well.

There’s lots to hate about this model of video. (And I’ve been happy to jump in; see “Die TV. Die! Die! Die!” or “Why You Want Real Bandwidth”.) I’ve called the emerging model “DV” for Downloadable Video. The basic idea is that when bandwidth is no longer scarce (e.g. when we have fiber to the home) and we can download video to our hearts content, then the reasons for the old, annoying way of getting video will go away and new forms will emerge that cater to our obvious interest in watching shows whenever we want to, unlimited by advertiser-defined time slots, and uninterrupted by ads. Shows can be designed to appeal to the passionate viewer and world-wide, cheap, direct-to-consumer distribution can be counted on to provide an audience to support even the most specialized shows.

Joost plays in to this because it has become the most credible contender for long-show, commercially-produced content king. (YouTube has the short piece, self-produced end of the DV market pretty much sown up–and in some ways is even further into a DV1.0 world.) Joost first hit the news as the brainchild of the same guys who brought you the telephony-disrupting Skype and terrified the music and video businesses with Kazaa. The trick in all these enterprises was leveraging the unused bandwidth of customers using an idea described as peer-to-peer aka P2P. In return for the downloaded service you get you let the network use your spare uploading capacity.

Joost uses this technology as well and so holds down their main operating costs…but the real splash came when they began to sign up real, long-form content and supported it with in-video advertising. That gave them both content credibility and a visible business plan–something no similar competitor has. The jury is still out on whether long-form content has to be supported by advertising that is embedded in the download or whether, like YouTube, advertising can be on the supporting web page or whether, like iTunes, a pay-per-view model is possible.

Part of what is interesting about Joost is that they are setting up to be a very social site. They’ve got chat, you can invite friends, and there is an API for new widgets that could further extend the ability to hook into IP services and RSS feeds. This opens doors. Conceivably one could invite friends from all over the country to watch the same show or sporting event and chat online while it was playing. No doubt “clubs” will arise focused around particular shows and scheduled meetings. RSS will allow for further amalgamation and integration with other services and video feeds.

But the proof is in the pudding; or in this case, the viewing. I recently sat down, played around with the (very slick) interface and actually settled in to watch a commercial TV/now DV show. It played at full screen on my laptop–there was noticeable blockiness but no actual hesitations even though the feed was being relayed over my wifi. Cox had provided me access to the first real, commercial television show I’ve streamed down and watched in its entirety over the internet instead of watching it when it was scheduled to be on cable. It’s a sign. We’re in the final days of TV1.0.

——————–

(Like the idea and have found by clicking through that Joost is still in beta and requires an invite from a user? Happy days: GigaOm’s influential NewTeeVee blog has the pull to get a simple sign-in sheet for its readers. You can use it too.)

Incidently, there are other, less high-profile startups trying to do something similar. The Joost page on Wikipedia points to several. I’d particularly recommend the Democracy site and player.

Learning & Teaching—and the Library

Here’s something that is a short, fun, watch but deserves a longer, contemplative, consideration.

It’s a roller coaster ride done in a classic Atari program. Go try it, noting the long, long rise at the end where you get to look down on the roller coaster below you.

Go on, this is fun and the rest won’t make sense unless you’ve actually tried it: YouTube – Real Estate Roller Coaster

…………………………………………………………………………………….
…………………………………………………………………………………….
…………………………………………………………………………………….

OK, now the not-so-fun part. That is a video that maps the cost-adjusted price of housing stock since 1890. (Here’s what that looks like in a NYTimes graph–you’ll recognize the “ride.”) Before you cry “boring–the worst of social studies” let me hasten to say that while I do not find the content boring (after all I was a social studies teacher in another life–and own my home) that is not why I’ve posted this for your lazy Sunday consideration.

I’m more interested in the context of this blog in the very interesting fact that you can learn something from this video that you can’t learn in more standard ways. We learn most usefully from “experience.” Educators mean something pretty specific when they use that term and it doesn’t preclude learning that takes place in schools. It includes things like this video which give you the experience of change over time. This is pretty different from the all -at-once time-abstracted image you get from the graph.

Long story short: this is a fine learning/teaching tool.

What makes that interesting here is that it was made by a “regular person” using the cheapest of hardware and software to help folks understand something which is otherwise difficult to put across about a very special interest of his or her own. That sort of individually localized “production” of sophisticated material is new…and very encouraging.

If we want more of this sort of thing we should do a couple of things: 1) Supply big, cheap, upload bandwidth–so that people can do video uploads or serve a few videos effectively from their own server. 2) Provide access to sophisticated and flexible software…this video required mating graphs with a 3D game program.

We’ll soon enough have #1 covered in Lafayette, and with the amazing bandwidth that will make available, at least on the local intranet, we’ll have the potential to use increasing sophisticated programs located on the net that will help with #2. If we choose, we can buy access to amazingly sophisticated programs and offer fast access to them through a local “library” organization. The library here has some technically sophisticated folks; librarians caught on to the value of communications technology early. I see no reason that the Lafayette Public Library couldn’t offer such a “loan” program and occasional classes on the software. (They already offer more basic computer/net classes.)

It is worth really thinking about how we can set the stage for our community to have access to the creative tools they might need to create really interesting products.

An on-net software library might be an way to exploit the utility of our fast intranet and the power of the pooled resource of the community library for everyone’s benefit.