Michael's Insight

Pew study finds that cable TV is now top source for campaign news

Pew: Cable is Top Source of Campaign News [Multichannel News]

Over the past four elections, cable news has grown in reach and now sits alone as the top source for campaign news for Americans.

According to a Pew Research study, 36% of people regularly tune in to cable news as their source for campaign news. While it's a slight drop from 38% during the 2008 elections, local broadcast TV news has dropped drastically from 40% in 2008 to 32% now.

Pew found that network TV news was the top source for 26% of Americans, with the Internet at closely behind at 25%. Newspapers continue to decline as a source for campaign news. Today, only 20% of Americans cite newspapers as the top source for campaign news. 

I wonder if Jon Stewart and Stephen Colbert count in this.

DSL continues decline in customers

The continued decline of DSL [GigaOM] 

In the early years of broadband Internet, DSL service from companies like Verizon and AT&T were competitive options to cable broadband. However, lately both of those companies have posted significant losses in their number of DSL customers.

During the fourth quarter of 2011, Verizon lost 103,000 total DSL lines and AT&T lost 636,000 lines. In fact, AT&T lost over 1.5 million DSL customers during the last three quarters of 2011.

What's the reason for the mass migration from DSL? The main reason is because cable providers offer a far superior broadband product to the former DSL customers. Just this week, Time Warner Cable announced that during the same period that Ma Bell lost over 600,000 DSL customers, 130,000 customers signed up for cable broaband with TWC. While other cable providers have yet to announce results for the previous quarter, expect similar defections from DSL to cable broadband.

AT&T customers raise concerns regarding broadband usage meter accuracy

AT&T Tweaks Meters [Multichannel News]

Recently AT&T announced they would begin putting usage caps on wireline broadband customers - both DSL and U-Verse. Those caps are set to be launched in fewer than 6 weeks, yet AT&T is still working out the kinks of how to inform its users of the amount of bandwidth being consumed on their networks.

Several users of the AT&T forums on Broadband Reports have commented that AT&T's broadband usage tracker doesn't match usage statistics from other independent tracking methods.

For its part, AT&T says that it's working to improve its tracking tool and to "ensure accuracy."

The caps AT&T intends to impose will be set at 150Gb for regular DSL users and 250Gb for U-verse users. A fee of $10 will be charged for every additional 50Gb used.

AT&T implementing caps and overage charges for landline Internet

Exclusive: AT&T To Impose Caps, Overages [Broadband Reports]

As if being slower than cable broadband wasn't enough, Ma Bell has decided to cap residential DSL and U-Verse Internet starting on May 2. DSL customers will be capped at 150 GB of usage and U-verse customers will be capped at 250 GB for each month. 

In a somewhat similar way to how AT&T prices mobile data plans, customers who go over will incur overage charges. Those overages kick in when a customer exceeds the cap three times at any point during the life of their account. The overage charge will be $10 for every additional 50 GB the customer uses.

According to AT&T, only around 2 percent of customers would reach the usage cap. As high-bandwidth consuming services, like streaming video, continue to gain popularity, more providers are considering usage-based pricing similar to AT&T's plans.

The company intends to notify customers of the new caps and provide additional notification when they use 65 percent, 90 percent and 100 percent of their maximum.

Research firm finds that cord-cutters are less than two-tenths of one percent of all pay-TV customers

Cord-Cutters Just 0.18% Of Pay-TV Subs Worldwide: Study [Multichannel News]

Informa Telecoms & Media, a research firm based out of the United Kingdom, has released a new study that examines the extent of pay-TV cord-cutting across the globe.

According to their report, in 2010, about 1.2 million pay-TV customers cut the cord and moved solely to Internet-based online video. This small number makes up only 0.18 percent of all global pay-TV customers. Only 36 percent of those cord-cutters (roughly 426,000) were in the United States.

Informa projects over the next five years with as many as 2 percent of global pay-TV subscribers will move to Internet video by 2015. However, the research shows that the greatest increases will occur in less developed markets. These markets have greater broadband penetration compared to pay-TV penetration and thus are likely to be more susceptible to cord-cutting.

For example, Internet video is growing rapidly in China, though there are numerous pirated content sites, which are believed to be driving some of that expected increase. In 2015, Informa predicts that Asia and Pacific nations will account for 39 percent of cord-cutters, while North America will only account for 19 percent.

Looking beyond DSL speed hype

Deflating 700-900 Mbps DSL Hype [Broadband Reports]

Some phone companies' hardware vendors have boasted recently about being able to achieve broadband speeds of over 700 Mbps over DSL in a laboratory. But while it might be possible to make several sets of twisted pair copper wires transmit speeds at that level over very, very short distances in a lab, there's no way current phone company infrastructure can get anywhere close to those speeds.

I've written before about DSL's most limiting factor when it comes to faster broadband is the line noise that degrades signals on twisted pair copper phone lines as they travel. The further those signals travel, the slower DSL speeds become due to the noise. Phone companies can add additional twisted pairs or use a noise-limiting technology called vectoring in an attempt to get faster speeds. Both require expensive infrastructure upgrades.

Broadband Reports points to a good analysis by a phone industry analyst that debunks the hype that these infrastructure upgrades have the ability to push DSL beyond 50-100 Mbps in a real-world setting. But even that speed is years away on DSL because it requires multiple twisted pairs and vectoring that currently aren't part of the existing telephone infrastructure. 

The bottom line - 800 Mbps DSL might be possible in a lab, but it's not going to be coming to phone customers anytime soon.  Most people who care about speed stick with cable broadband.  And, as I previously announced, Insight's 50 meg service is just around the corner.

Fox pulls the plug on Cablevision -- Special Saturday report

Fox goes dark on Cablevision [Multichannel News]

In the wee hours of the night, 3 million Cablevision customers in Metro New York lost Fox owned Channels 5 and 9, Fox Business, NatGeo Wild, and Fox Desportes.  The channels were pulled off the cable system by News Corporation, Fox's owner.

This was a completely predictable situation.  Fox is asking Cablevision to double the total fees they pay for their networks. Fox points out that they are only asking Cablevision to pay what others have agreed to pay. 

Why was this so predictable? 

Because of the timing.  The Phillies are playing the Giants tonight in the National League playoffs, on the road to the World Series where New Yorkers hope to see the Yankees.  The National League championship games and the World Series are on Fox this year.  And let's not forget the Fox coverage of the National Conference NFL games -- tomorrow the NY Giants are playing the Detroit Lions.

I wrote earlier this week that having exclusive rights to these types of events results in monopoly power in the marketplace.  In response to that, someone posted the following comment to that article first quoting my post and then, succinctly offering his or her reaction to my view:

"When a single [network] has the exclusive rights to extremely high-demand product, the laws of monopoly come into play."

Doctor, heal thyself."

Many people believe what this person believes -- that cable operators have monopoly power.  But we don't.

In some markets, where there is no wireline competition, there still are alternative suppliers for every service we provide including video, telephone and Broadband services.  You may prefer to purchase them in a package from one company like us, but that does not give us the type of monopoly power that I am talking about.  Having exclusive rights to the World Series and other highly-desired events like the Super Bowl and the Academy Awards is a monopoly in the truest sense. 

Cablevision customers can now choose between DirectTV, Dish, and Verizon as an alternative to Cablevision if they don't like their current distributor.  Even with that exposure, imagine how desperate Cablevision feels about controlling the spiraling cost of programming, particularly sports, which I also have written about many times.

I never like to see the government get involved in commerical activities when the marketplace is working. 

In this case, it's not.

GigaOM: AT&T U-Verse upgrade "underwhelms"

AT&T Underwhelms With U-Verse Upgrade [GigaOM]

The reviews are in on AT&T's recent announcement of an upgrade for it's combination broadband/multichannel video product U-Verse, and according to GigaOM, the upgrade "underwhelms." The upgrade that AT&T plans to perform to its U-Verse product is called pair bonding. Currently, U-Verse customers must be located within 3,000 feet of a piece of field equipment called a video-ready access device or VRAD. Much further away, and the copper twisted pair that carries the U-Verse DSL and video will have too much signal loss to be effective. With pair bonding, AT&T hopes to reduce some of that signal loss to extend U-Verse's range from the VRAD. 

What won't pair bonding accomplish? First of all, it won't increase U-Verse broadband speeds or the amount of channels that U-Verse can carry. It won't increase the number of televisions that can watch HD channels in each U-Verse household - which is currently limited. It merely increases the distance from the VRAD that U-Verse service can travel.

For customers looking for faster broadband speeds, more HD and other product upgrades, pair bonding won't be an upgrade.

AT&T has another significant iPhone-related network congestion event

AT&T's Network Crumbles At Coachella [Broadband Reports]

I love my iPhone, I really do but I can feel the pain as another large gathering of iPhone users resulted in yet another meltdown of AT&T's wireless data network - this time at the Coachella music festival in California. The music festival drew thousands of attendees and even featured its own iPhone application. But when it came to AT&T's network, festival attendees were less than impressed. Broadband Reports indicates AT&T users waited up to 6 hours for text messages to send and receive and wireless data was near non-existent.

AT&T is currently Apple's exclusive wireless provider for the iPhone in the U.S. The company has experienced a myriad of network issues, including another high-profile network congestion problem at last year's South by Southwest conference in Austin, Texas. These issues often result from a lack of bandwidth on AT&T's network to support the data needs of iPhone customers, who typically consume larger amounts of wireless data than other customers.

As a result of these problems, a recent study by CFI Group indicated that half of iPhone users expressed dissatisfaction with AT&T's wireless network and wished to switch providers.

FCC denies petition regarding Comcast-NBC merger review

FCC Denies Petition To Delay Comcast/NBCU Merger Review [Multichannel News]

While it still has several hurdles to clear, the merger of cable provider Comcast and NBC Universal received one green light from the FCC this week. The Commission denied a petition from the Mabuhay Alliance that sought to delay the merger for the purpose of holding hearings on the diversity implications of the deal. The Alliance had sought to have the FCC conduct an inquiry into how the merger would affect media content diversity with regard to Asian Americans and other minorities.

The FCC's ruling on this issue is one in a larger set of considerations the Commission and other federal agencies are reviewing before the merger can take place. However, it doesn't mean NBC will be in the Comcast fold anytime soon.  According to Multichannel News, the government's review of the merger still is expected to take around a year.

In response to the FCC's ruling, Multichannel also reports that Comcast is holding discussions with a number of national diversity organizations about the merger.   

AT&T complains about ad that factually presents U-Verse bandwidth pinch

AT&T Complains About Ads Mocking U-Verse Capacity Crunch [Broadband Reports]

AT&T is complaining about a Time Warner Cable television ad that points out problems with the architecture of AT&T's U-Verse product. The ad, which illustrates the limited capacity of U-Verse to deliver both HD television and Internet over twisted pair copper, is the subject of a complaint filed by AT&T with the National Advertising Division of the Better Business Bureau. In the ad, a football player representing HD channels tackles a smaller player representing Internet speeds. Because the U-Verse product delivers both over limited bandwidth twisted pair, the ad attempts to demonstrate that "those high def TV signals can make mincemeat out of your Internet service - no wonder your Internet can slow down."

Broadband Reports indicates that despite AT&T's complaint about the ad, what Time Warner Cable says about U-Verse is true. The Internet speeds delivered by U-Verse are dependent upon the distance a customer lives from the AT&T equipment that delivers the product. The digital signals degrade as they travel over AT&T's twisted pair copper wire, limiting the distance that the product can be reliably transmitted and the product's Internet speeds. That problem is compounded because U-Verse uses a portion of its already limited bandwidth to transmit the video portion of the product via Internet protocol.

So, regardless of whether AT&T likes it or not, Time Warner Cable's ad is, in my opinion, factually correct.

AT&T aims to prevent network gridlock repeat in Austin, Texas

How AT&T Plans to Keep SXSW From Swamping Its Network [GigaOM]

During last year's South by Southwest convention, a popular destination for social media enthusiasts in Austin, Texas, AT&T's wireless date network was gridlocked by the large number of iPhone users that attended. As a result of the coverage of the failure of AT&T's network on social media and blogs, AT&T is determined that events don't repeat themselves for the conference this year, which starts March 12th.  Good for them!

It may be of little consolation to AT&T customers on other overtaxed cells, at least the company is doing things from adding fiber backhaul in Austin to shipping in temporary cell sites on wheels to improve their reliability for the new-media savvy audience.

With iPhone users around the nation using much more bandwidth than regular users.  As a result, AT&T must work feverishly in order to meet the bandwidth needs of 3G users, as well as their regular cell phone customers.  It's good that AT&T has decided to anticipate the coming demand in Austin.

Maybe they could check out that spot on Central Park West, between West 63rd and 66th Street.  It's a call killer every time.

Hulu could come to Apple iPad as a subscription service

Hulu Wants to Be on the iPad, But Not for Free [Gizmodo]

Apple answered the question of whether its new iPad device would incorporate Adobe Flash and its streaming video capabilities when it announced the product last month. It will not. But that decision apparently hasn't deterred the popular long form video site Hulu, which Gizmodo reports would like to make its content available to iPad users.

Currently, Hulu's content is ad supported and free to viewers. But Gizmodo's post indicates that Hulu wants to create a paid subscription version for the iPad while maintaining the current free version for users watching via their computer. 

There are still many questions to be answered for Hulu and Apple. First, can the companies develop a technical solution for viewing Hulu content on the iPad without Flash? Second, how does Apple deal with the likelihood that Hulu's content would compete with the video content on iTunes? 

Advertising Age predicts Hulu is about to become more like traditional television

TV-Sized Ad Loads Coming to Online Video? [Stop the Cap]

Advertising Age is predicting that long form online video is about to become a lot more like traditional television, charging a subscription fee for access to content and the addition of more commercial advertising. Right now on Hulu, the most popular long form video site, viewers can watch television shows free with a single ad shown during each commercial break. If Advertising Age's predictions were to come to fruition, free viewing could change to a subscription fee and the single advertisement would be replaced with several, much like traditional television.

Without a change to their revenue model, Hulu's current ad-supported content is not sustainable long term with other services like Comcast's Xfinity entering the marketplace. Currently Xfinity is available free of charge to Comcast video and broadband customers, but the company has plans to offer subscription access to broadband customers of other providers.

Another force driving change in the long form online model beyond competition is Nielsen's planned integration of traditional television and online video viewing metrics. In coming months, advertisers will be able to compare ratings for shows on both platforms thanks to the change in the way Nielsen reports this information.  

Could national broadband plan include fiber lease requirement?

AT&T, Verizon May Have to Share Lines Under FCC Plan [Bloomberg News]

A controversial proposal made by one small business network services provider could make it into the FCC's national broadband plan based on a report from Bloomberg News. Cbeyond Inc. has proposed that telephone companies be required to lease their high-speed fiber lines to smaller companies. Bloomberg indicates that an aide to FCC chairman Julius Genchowski says that the commission is giving serious consideration to Cbeyond's idea and that it has "a lot of appeal as part of a national broadband strategy."

As you can imagine, AT&T and Verzion aren't excited about the idea of the government mandating that they lease their infrastructure to their competitors. Both telcos have filed objections with the FCC stating that any lease requirement would have a stifling effect on their willingness to invest capital in building out their fiber networks, not to mention the ongoing capital it takes to bring new bandwidth-consuming future services.

What are the chances that the lease requirement make it into the FCC's broadband plan? Ars Technica points out that previous comments made by the coordinator of the FCC's broadband plan in December were not favorable to the idea. At this point, we'll just have to wait to see what is released in the plan, which is expected next month.

Google announces plans to test being an ISP

Google Set to Showcase Fast Internet [New York Times]

Google has long prided itself on its ability to create products that provide innovative features - recently making strategic decisions to enter markets outside of its core competency in search. Microsoft is looking on as Google attempts to create a cloud-based business productivity product in Google Docs that can compete with Microsoft Office and Google's CEO left Apple's board of directors after it became clear that Google's Android mobile operating system was being groomed to compete directly with the iPhone. Yesterday, Google announced that it is going to enter yet another market with the intent of shaking things up. Google plans to become an ISP.

Google's announcement indicated that it is searching for one or more communities where it plans to build a fiber to the home network to provide 1 Gbps broadband service directly to residential customers. Though Google operates a small scale wi-fi network in its hometown of Mountain View, California, this would be Google's first foray into providing broadband on a large scale. The company plans to roll out a network that will serve between 50,000 and 500,000 customers. 

Calling its plan an "experiment" designed to spur innovation in the U.S. broadband market, Google is seeking communities to nominate themselves for selection as the testbed for Google's network. Speaking of spurring innovation, Light Reading's Jeff Baumgartner has written an interesting post on how Google's plans may create additional investment in the improvement of the cable broadband product -- not that we needed much help as strong wireline and wireless competition are plenty of motivation for that.

Google hasn't revealed how much it plans to invest in this plan, nor is it indicating how much it will cost consumers to connect to the network other than it plans to price its product competitively. It appears that the company plans to move quickly on this project, selecting areas where it plans to build the network within the next few months. 

AT&T's network could be a drag on Apple's new product

AT&T Is an Apple Tablet Dealbreaker [Mashable] 

There's been a lot of excitement building about Apple's planned announcement next week of their "latest creation."  Most speculation about the announcement centers on rumors about a tablet computer that the company may be releasing.

Online electronics retailer Retrevo asked 500 of their customers what their most wanted features would be and which features would prevent them from buying the hypothetical Apple tablet.  

As they say on the old game show, Family Feud, "The survey says!!" --

Second only to long battery life, 40% say 3G is a must.  With that in mind, guess what the second highest drag on the product was...

Sorry AT&T.  Any exclusive association with the wireless giant's network would be a major drag on sales.

Retrevo's survey indicated that fully one-third of customers would not purchase an Apple tablet if it relied exclusively on AT&T for Internet connectivity. Many reports indicate that Apple iPhone users have been very disappointed in AT&T's network reliability. AT&T is the exclusive wireless provider for the iPhone in the U.S, and it appears that it's reputation among many iPhone users is spilling over to Apple's newest product.

Apple will announce their new product next Wednesday in San Francisco.  Can't wait.

Network error plagues AT&T users

Weird AT&T Glitch Allowed Users To Access Other People's Facebook Account [Associated Press/Silicon Alley Insider]

The Associated Press reported over the weekend about a significant problem facing users of AT&T's wireless network. A routing error has caused an unknown number of AT&T customers connecting to other AT&T customers' Facebook pages - rather than their own. If you're accessing Facebook via an AT&T wireless device, there's a chance you will gain access to the Facebook account of a complete stranger. And at the same time, there may be a complete stranger also connected to the AT&T network looking at your Facebook account. 

According to this report, the routing errors appear to be confined to AT&T's mobile network and users attempting to access Facebook. But even though the glitch is currently limited to Facebook, more sensitive web pages could also be potentially be impacted. Imagine the problems that could be caused by the wires crossing on a site containing sensitive financial data.

Essentially, this error is the result of the routing infrastructure at AT&T, connecting a user's requested web page to another user's request. It's a very serious error, and there's little indication in this report about what caused it. For their part, an AT&T spokesman is quoted in the article indicating that the problem was related to an error on AT&T's network and that the error was being fixed.

I'll keep an eye out for additional reporting on this serious network glitch.

Satellite company refuses to participate in cross-platform set-top

DirecTV Says, 'Leave Our Box Out of It' [Multichannel News]

 As the FCC explores a process to determine whether a technical solution can be developed to allow television set-tops to operate on any cable or satellite provider, America's cable companies have joined in that effort, pledging their support in developing a cross-platform set-top. But at least one satellite company has gone on the record to state their opposition to their set-tops being part of the solution.

In comments to the FCC filed on December 15th, DirecTV indicates their unwillingness to allow their set-tops to become part of a cross-platform solution for customers. DirecTV maintains that such a solution would not foster technical innovation.

Todd Spangler writes that if consumers could access any multi-channel video provider from a single box, it would likely prove to be a very popular technology. But, it's only fair if all companies participate in the process. If the FCC develops rules for this technology, they should apply equally and fairly to cable and satellite alike.

AT&T floats metered billing for iPhone

AT&T considers incentives to curb heavy data usage [CNET News]

 Apple iPhone users that are heavy data consumers may be getting some "incentives" to cut down their data use on AT&T's wireless network, according to comments made by the head of AT&T's wireless division recently. AT&T is the sole provider of iPhone service in the U.S., and at a recent investor conference, AT&T wireless head Ralph de la Vega told attendees that 3 percent of smartphone users are consuming 40 percent of the company's wireless bandwidth. Most of the smartphones on AT&T's network are iPhones.

According to CNET, de la Vega indicated that high-bandwidth applications were responsible for the disproportional usage of bandwidth, and that AT&T was developing a plan to cause users to curb their bandwidth use.

"What's driving usage on the network and driving these high usage situations are things like video, or audio that keeps playing around the clock," he said, according to the transcript provided by AT&T. "And so we've got to get to those customers and have them recognize that they need to change their pattern, or there will be other things that they are going to have to do to reduce their usage."

AT&T has suffered from questions about slowing data speeds on their wireless network due to the limited bandwidth, and this announcement appears to be an attempt to solve their limited bandwidth issues. According to CNET, de la Vega indicated that AT&T may bill data usage on a metered basis as an incentive for their iPhone users to consume less data.

Half of iPhone users express dissatisfaction with AT&T's network

Is the iPhone hurting AT&T's brand? [CNET News]

More research points to weaknesses in AT&T's network is having a negative impact in Ma Bell's customer satisfaction among smartphone users. A survey by CFI Group of smartphone users indicates that AT&T scores the worst in customer satisfaction compared to the three other major wireless providers.  Digging into the numbers, it appears that customers site a poor quality of AT&T's network as the driving force in customer dissatisfaction with AT&T.

While 90 percent of iPhone users indicate that they love the device - saying they would recommend it to a friend - half of all iPhone users would like to change providers. AT&T is currently the exclusive provider for the iPhone in the U.S. These numbers would indicate a high level of satisfaction with the iPhone itself, but frustration with how the iPhone performs on AT&T's network.

CNET details the plethora of iPhone users that have complained about dropped calls and slow data speeds because AT&T's 3G network just isn't connecting to their iPhone. I noticed an article from ArsTechnica this week that indicated a dropped call rate of 30 percent isn't unusual for the iPhone on AT&T's network. The anecdotal information firmly supports CFI Group's customer satisfaction research. If the iPhone is cutting off 3 out of every 10 calls a user makes, it isn't surprising that half of all iPhone users want to quit AT&T as their provider.

Three months late, AT&T starting to release MMS

iPhone MMS Dropping Early For Some [Broadband Reports]

When the Apple iPhone 3G S was announced back on June 8th of this year, one of the new features it was set to have was multimedia messaging service (MMS). MMS is basically a way of sending pictures, video and audio via text messaging, a technology that was invented in the 1980's. As it turned out, AT&T, the exclusive provider for the iPhone in this country, wasn't ready to roll out MMS at the time of the iPhone launch so AT&T iPhone users were told that they would just have to wait until AT&T upgraded its network to handle the MMS messaging service.

It's taken over three months since the launch, and it appears that AT&T is slowly making good on its promise to have MMS service. Broadband Reports indicates that some iPhone users now have MMS capability on AT&T's network, ahead of an AT&T announced availability date of September 25th, even though this "early" availability is really three months late.

AT&T's tardiness on the MMS feature availability has spawned a number of lawsuits from disappointed users led to believe that they would have MMS capability when they bought their iPhone.

AT&T's network overloaded by iPhone

iPhones Overload AT&T, Angering Customers [New York Times]

It's another chapter in the classic story of Ma Bell over-promising and under-delivering when it comes to their network. The New York Times has profiled the trouble that U.S. iPhone users face sharing the limited bandwidth of AT&T's wireless network, the iPhone's exclusive carrier in the United States.

Due to the iPhone's popularity - there are around 9 million users in the U.S. - AT&T's wireless network is not able to fully support the bandwidth required by their iPhone customers.  According to the article, many iPhone users are left with "dropped calls, spotty service, delayed text and voice messages and glacial download speeds." Even though the iPhone is a great device, articles like this one can't be inspiring confidence among smartphone buyers looking at making a switch to the iPhone and AT&T's network.

The network congestion problems are worse for customers in urban areas, where there are larger concentrations of iPhone users accessing the same network bandwidth. This article includes reference to the South by Southwest conference in March of this year in Austin, Texas, where a large number of iPhone equipped conference goers managed to slow the AT&T cellular network in Austin nearly to a stop.

AT&T's deal with Apple to be the exclusive iPhone carrier expires at the end of this year, and if Apple opts to offer the phone to other providers, it will allow frustrated AT&T customers to find another, less congested network to handle their data needs.

D.C. Court of Appeals throws out cable ownership cap

Court Throws Out FCC's 30% Cable Subscriber Cap [Multichannel News]

For the third time since Congress passed the 1992 Cable Act, the federal courts have vacated the FCC's rulemaking that limits the number of customers any single cable operator can have. On Friday, the U.S. Court of Appeals for the D.C. Circuit, once again invalidated the FCC rule that limits cable operators from serving more than 30% of cable customers nationwide.  The court continued to find that the FCC didn't properly account for competition that cable operators face from satellite providers and telephone companies.

The FCC implemented the latest version of the ownership cap in 2007, in an attempt to limit a single cable operator's control over the video marketplace. Unfortunately, the federal court found that the Commission didn't justify the rule by providing empirical evidence that demonstrated a lack of competition in the video market.

The ruling really only has immediate impact on Comcast, the nation's largest cable operator, which was the plaintiff in the suit that resulted in the invalidation of the cap. Here's what the Court said:

"[T]he commission has failed to demonstrate that allowing a cable operator to serve more than 30% of all cable subscribers would threaten to reduce either competition or diversity in programming. First, the record is replete with evidence of ever increasing competition among video providers: Satellite and fiber optic video providers have entered the market and grown in market share since the Congress passed the 1992 Act, and particularly in recent years. Cable operators, therefore, no longer have the bottleneck power over programming that concerned the Congress in 1992. Second, over the same period there has been a dramatic increase both in the number of cable networks and in the programming available to subscribers.

"In view of the overwhelming evidence concerning 'the dynamic nature of the communications marketplace,' and the entry of new competitors at both the programming and the distribution levels, it was arbitrary and capricious for the commission to conclude that a cable operator serving more than 30% of the market poses a threat either to competition or to diversity in programming."

The Court was 100% correct when it recognized what the FCC didn't adequately analyze the current market reality. Customers today have a variety of options in today's video marketplace. Satellite and telephone companies both provide service to customers in areas that Insight serves, and believe me, there are lots of extremely talanted people at Insight that work every single day to make sure we're staying ahead of the competition that we face.

Even though the Court didn't take note of online video as an emerging competitor to other video providers, but I noticed this chart over the weekend that indicates that Hulu has more viewers than Time Warner Cable, the nation's second largest cable operator. Both Comcast and Time Warner Cable have begun trials of their own online video services to address this emerging competitive video market.

This ruling reinforces the point that a light regulatory touch can actually encourage competition, rather than stifling it. If the FCC decides to readdress this issue, I'd encourage them to take a look at the light regulatory touch that preceded the nation's communications revolution in the 1990's.

FCC asks questions about rejection of Google Voice for iPhone

FCC Launches Investigation Of Apple's Rejection Of Google Voice App [Silicon Alley Insider]

After Google revealed last week that Apple had rejected its Google Voice application for the iPhone Apps Store, on Friday several reports surfaced indicating that the FCC has sent letters to Google, Apple and AT&T (the iPhone's exclusive U.S. carrier) requesting "a more complete understanding of the situation."

The Google Voice application provides call routing, enhanced voicemail and free text messaging for its users. As I indicated last week, Apple's rejection of the application created questions about AT&T's role in the decision, which, according to the New York Times, is the focus of the FCC's inquiry into the matter.

This article indicates that observers have questioned whether the free text messaging available with the Google Voice application raised concerns about the potential loss of iPhone text messaging revenue at AT&T, resulting in the rejection of the application. By the way, the Google Voice application is available for AT&T's BlackBerry products, but AT&T does not have the ability to block the installation of applications on BlackBerrys in the same way that Apple can reject iPhone applications.

And, as I've noted here several times before, this isn't the first time that Apple has rejected or placed limitations an iPhone application that has the potential of competing with existing AT&T services. Three months ago, Apple limited the SlingPlayer application by prohibiting it from streaming video via AT&T's wireless network, while allowing other applications to stream video via the AT&T network. It's not a secret that many SlingPlayer users are streaming cable programming, which competes with AT&T's own video product in many locales.

The FCC wants to examine AT&T's role in determining which applications are rejected from the iTunes Apps Store, and what role that AT&T had in the rejection of Google Voice, based on questions they ask of Apple in their letter to that company. It will be interesting to see the results of the FCC's examination of these issues.