Michael's Insight

FCC releases milestones toward a national broadband plan

FCC broadband roadmap aims to bring order to stimulus chaos [ArsTechnica]

Last Thursday, the Federal Communications Commission (FCC), released a set of milestones that it plans to accomplish before next year's deadline for its national broadband plan. In the economic stimulus bill that Congress passed earlier this year, it designated the FCC as the agency responsible for creating a national plan for broadband deployment and adoption and requested that the plan be delivered to Congress by February 17, 2010.

Under the leadership of new FCC Chairman Julius Genachowski, the agency has announced several key dates for the broadband plan. On July 21, the period for public comments on the broadband plan closes. If you wish to submit your thoughts to the policy makers responsible for developing the plan, you can submit them through the FCC's web site here.

Starting this month, the process for awarding the broadband stimulus funds in the economic stimulus bill will begin, with the first checks being delivered around November 7. As this article notes, the awarding of several billion dollars for broadband infrastructure deployment will make writing a national broadband plan a bit of a moving target, but the Commission is expected to weigh in on the plan by December, after several months of public meetings on the plan. After the plan if finalized, expect it to be delivered to Congress by the February 17 deadline.

After the report is released, it will be up to the nation's policy makers to take note of the recommendations that the FCC makes with regard to our broadband infrastructure, deciding which policy measures will best increase Americans' access to and adoption of broadband.

Obama FCC Takes Shape

Genachowski Confirmed as FCC Chairman [Multichannel News] 

Yesterday was a huge news day with the tragic and sudden passing of Michael Jackson and the sad end of a courageous battle against cancer by Farrah Fawcett.  In Washington regulatory circles, it also was a big day.  The Senate unceremoniously approved, by unanimous consent, the appointment of Julius Genachowski as Chairman of the Federal Communications Commission.  It also approved the reappointment of Commissioner Robert McDowell to his first full, five-year term.  He was previously serving the conclusion of former Chairman Michael Powell's term when he resigned the Commission. 

In addition to these approvals, President Obama officially nominated Meredeth Attwell Baker to the other Republican seat and Mignon Clyburn to the final Democratic chair who, if approved will join Genachowski, McDowell, and Michael Copps to form the five-member board.

Genachowski brings to the job an impressive mix of legal, business, regulatory and political experience.  A classmate of the President's at Harvard Law, he has worked in political campaigns, was a staff member for Senator Chuck Schumer, clerked for Supreme Court justices David Souter and William Brennan, worked for Barry Diller at his media company, IAC/InterActiveCorp, and served on the boards of Expedia, Hotels.com, and Ticketmaster.

Baker and Clyburn will go through the approval process, in a hearing by the Commerce Committee, yet to be scheduled.  Baker is the former acting head of National Telecommunications and Information Administration where she is credited for stepping in and repairing the botched-up Federal coupon program that had run out of money during the digital transition.  Clyburn is a South Carolina Public Service Commissioner.

Telcos battle over special access rates

Fighting AT&T, Verizon's chokehold on "middle mile" [ArsTechnica]

Several wireline telcos and a few consumer groups have banded together to encourage policy makers to investigate the pricing that Ma Bell - AT&T and Verizon in this case - are charging for special access lines to the Internet. Yesterday, the coalition, which calls itself the No Choke Points Coalition, held a press conference in Washington D.C. to announce that they're fed up with the prices that AT&T and Verizon are charging them to connect their customers to the Internet.

Sprint, T-Mobile, TW-Telecom, Clearwire, cbeyond, and several other telephone companies joined with Public Knowledge, Media Access Project, and New America to create the coalition, which has launched a web site explaining the issue at nochokepoints.org. On Friday, the group sent a letter to interim FCC Chairman Michael Copps that read in part:

"We urge you to act now, in 2009, to provide relief from this high-capacity broadband chokepoint (referred to as 'special access' in the FCC’s rules)," they concluded. "The inflated rates many are forced to pay the entities that control this market are taking dollars away from already-struggling consumers, companies working hard to save jobs, and innovators that want to expand broadband service across America."

As this article explains, the roots of this issue run back to the 1996 Telecommunications Act and the deregulation of price caps for access to Internet middle mile connections in certain urban areas. According to the coalition pushing FCC intervention, in areas without the price caps, AT&T and Verizon are earning rates of return that are exorbitant in comparison to their costs from the companies that pay for access, who are in-turn passing higher Internet access rates on to their customers.

AT&T argues that the coalition is simply attempting to re-regulate the market to relieve some "short-term financial and business pressures," and isn't really interested in aiding consumers in achieving lower Internet access rates.

FCC Chairman-desingate indicates government should focus on unserved

Genachowksi: Focus On The Unserved [Multichannel News]

FCC Chairman-designate Julius Genachowsk is inching closer to confirmation as his nomination was given the thumbs-up in the Senate Commerce Committee last week.  He is expected to get quick approval from the entire Senate fairly soon. During his testimony to the committee Genachowski talked about the FCC's national broadband plan and how he would like to see the agency advise the federal agencies responsible for the broadband stimulus grants. Genachowski displayed a strong dose of common sense when he indicated a preference that the FCC focus on getting broadband service to those in unserved areas - those without access to any broadband Internet service.

Though the guidelines for the federal broadband stimulus haven't been released yet, the economic stimulus act contemplates grants being awarded to "underserved areas" in addition to unserved areas. While its easy to define what unserved means, "underserved" has a much more nebulous definition. I completely agree with Chairman-designate Genachowski who sees the wisdom in focusing spending the broadband stimulous money first for those without access to broadband service. Like the electrification of rural America nearly 100 years ago,money will be well spent in areas where there isn't a business case for broadband providers, where there is a natural role for the federal government to play in getting every American connected to the Internet via a fast connection.

The FCC is set to release a national broadband plan next February under Genachowski's leadership.

Congress holds hearings on behavioral based advertising

Congress Questions How Web Sites Use Personal Data [NYT Bits Blog]

Chairman Henry Waxman's (D-CA) Energy and Commerce Committee is conducting an ongoing investigation into behavioral based advertising and how web sites use personal information to serve advertising. Two subcommittees held a joint hearing yesterday to find out about how Google, Facebook and Yahoo track user data on their customers. The hearing involved the members of the Subcommittee on Commerce, Trade, and Consumer Protection and the Subcommittee on Communications, Technology, and the Internet.

Several members of Congress are concerned about users' privacy as the surf the Internet, having information about their surfing habits retained and used to determine the most relevant online advertising to display to them. Each of the companies that testified indicated that they have procedures that protect the privacy of their users and make efforts to inform users about the data that is retained about them. In their presentations to the subcommittees, all three argued for a level of self-regulation in this space.

Contrary to some of its detractors' opinions, behavioral advertising isn't all bad. Whether on the television or on the web, advertising generally helps to keep direct consumer costs for cable and broadband lower.  And behavioral advertising provides great efficiencies to advertisers. It helps to filter out unwanted ads for TV viewers and web surfers by using computer intellegence to provide information on products that are more likely to be of interest to the consumer. Congress should carefully weigh the pros and cons of the concept. Protecting privacy is absolutely essential and should be reviewed by lawmakers and regulators but an outright prohibition of the practice, as suggested by some, is not the answer.

Rep. Eric Massa introduces bill to regualate metered billing

Massa Bill Would Review ISPs' Volume Usage Service Plans [Multichannel News]

Yesterday, U.S. Representative Eric Massa (D-New York) introduced a bill designed to create federal regulations for Internet providers who look to create new broadband pricing structures that charge customers based on their broadband usage. Massa's bill, a reaction to the metered billing trials announced but never carried out by Time Warner Cable earlier this year, would require Federal Trade Commission (FTC) approval for any Internet provider with more than 2 million customers that decides to create a metered billing system.

While several providers, including Time Warner and AT&T, have experimented in test markets with broadband billing systems designed to charge based on consumption, Rep. Massa's bill is designed to chill any provider's plan to attempt a similar experiment. The bill would require ISPs to submit any usage based billing proposal to the FTC for review and approval that the practice isn't "unfair and unconscionable." The FTC would consult with the FCC to make that determination. Only when both agencies green-lighted the test, could it proceed, should Rep. Massa's bill pass.

As I've said here before, ten years ago, when flat rate billing was decided upon, no one anticipated that video and other big bandwidth consumer apps (not to mention the insatiable appetite for bandwidth of high definition video) would become so prevalent on the Internet.  I know, in this day and age, it's fashionable to mistrust corporate America making it easier to accept the Federal government regulating almost everything that moves. But this level of regulation in a business that is changing so dynamically runs a huge risk of stifling innovation and investment by ISPs. 

I know I'm not popular with some people in my support of these experiments but I deeply understand the economic drivers of Time Warner's and AT&T's previously announced tests.  Unfortunately, the biggest mistake that occurred when they announced them was that no one made it extremely clear that their plans would also result in some customers paying less.  Instead, the only discussion was centered around huge bandwidth consumers who will likely pay more.

I call upon Congress to move with great care when they decide to plunge deeply into regulating industries that are functioning well.  Let's not forget that broadband has gone from serving virtually no one to nearly two-thirds of the population in a handful of years.  If we don't keep up with the changing nature of its usage, an obsoleted economic model inevitably will slow innovation and strangle critical new investment. 

And that's not good for anyone.

The Pirate Bay attempts to circumvent copyright law

The Pirate Bay Launches Ipredator VPN [NewTeeVee]

Having lost a civil and criminal copyright infringement trial and looking to avoid enforcement of Sweden's newly strengthened copyright laws, The Pirate Bay, the web's most notorious BitTorrent tracker, is introducing a new "service" to its users. The site, which is based in Sweden, has announced Ipredator - a new virtual private networking (VPN) service designed to provide anonymity to its users.

Sweden's, and the European Union's, new copyright protection laws provide for ISP's to turn over IP addresses of copyright infringers to content owners. This provision would allow the content owners to protect their rights to the material that P2Pers are trading online. Since the notion that content creators should be paid for their work offends The Pirate Bay, they've created this VPN service to mask the IP addresses of the P2Pers using its site. If the individual IP addresses cannot be traced back to a user, then there is no way for ISPs to reliably determine which users are trading copyrighted content. For this service, The Pirate Bay plans to charge $7 per month.

The Pirate Bay's new VPN service is one more move in the cat and mouse game that content owners, governments around the world and pirates are engaged in. While this may be a "victory" for The Pirate Bay, it's likely to be short lived. Without a business model that compensates content producers, content won't continue to be produced for the pirates to steal.

Nation experiences a smooth transition to DTV

The day after the DTV transition [CNET News]

I woke up this morning to find that my niece in California was among those who lost her television on Friday night.  Prominently posted on her Facebook page, she announce that she was "among the 20 million Americans" without television.  I promptly posted onto her wall the following message.

From your loving uncle, the Cable Guy -- If 20 million American homes really were left without television, the protests on our streets would make the demonstrations in Iran look like a frat party. The number is actually around 2 million.

So, here are the facts.  Fielding over 300,000 phone calls to their DTV hotline and 3.1 million page views at www.dtv.gov on Friday, the FCC set new records for call center volume during Friday's transition of 971 broadcast stations to digital signals. Though there are still isolated DTV issues around the country, it appears that the transition was largely successful without any widespread television disruption.

The FCC fielded consumer calls with an operator staff of 4,000 that worked around the clock to ensure that the average wait time for DTV assistance was around 4.6 minutes. Around 30 percent of calls to the DTV hotline involved issues with digital converter boxes, with most of those calls resolved by requesting users to rescan for new digital channels that came online on Friday. Another 20 percent of calls involved reception issues. Digital television signals behave differently than their analog counterparts, and many viewers in rural areas are dealing with the so-callled DTV cliff effect that in some cases reduces the number of digital television channels that can be received.

The FCC, cable operators, broadcasters and television viewers are still working through a number of isolated issues that have resulted from the nation's switch to digital television, but the reports continue to be largely positive on the nation's preparedness for the transition. The National Cable and Telecommunications Association (NCTA) continues to monitor transition issues, and individual cable operators are working to help consumers like my niece who were unprepared on Friday get connected to broadcast channels.

DTV: 22 years in the making

Markey: Push For Digital Standard Was Game-Changer [Multichannel News]

How long have we been working toward a digital conversion of all television broadcasts? According to Representative Ed Markey (D-MA), he's been pushing the idea since 1987. And he's absolutely right.  I personally have testified around a half dozen times about the transition over the last decade urging the Congress to move ahead with the transition.  This country's policy makers have been working for over twenty years to achieve today's digital transition deadline.

In this Multichannel News article, Representative Markey reminded us that he held the first hearing on HDTV in 1987, as then-chairman of the House Telecommunication Subcommittee, and has played a leadership role, along with Congressman Fred Upton, (R-MI), in the effort to bring today about ever since.

Markey says that "I never imagined that it would take almost 22 years to reach this moment [the DTV transition]." In 1990, Markey's efforts convinced the FCC to begin pursuing a digital standard for television broadcasts, a critical step in the process.

It wasn't until after 9-11 that the political determination to force this transition solidified.  Shocked by the troubled communications between the different emergency services in New York and Washington, members of Congress committed to using some of the freed-up analog spectrum for emergency agency communications.

It's been a long time coming but the end is finally upon us. 

Make sure you're DTV ready so you don't miss out on the Stanley Cup

DTV: The Puck Could Stop Here For Red Wings-Penguins [Multichannel News]

In other DTV preparedness news, Representative John Dingell of Michigan is warning his constituents, many of whom are fans of the Detroit Red Wings, that they need to prepare today for the digital transition. Otherwise they might not get to watch the deciding Game Seven of the Stanley Cup Finals between the Red Wings and the Pittsburgh Penguins.

In an email to his constituents, Representative Dingell said:

"Tomorrow night, the Red Wings will try to make history playing for another Stanley Cup. It will be a tremendous game, but some fans will not be able to watch the game because just a few hours before the first face off, their TVs will become obsolete without a converter box. Over the next 36 hours, many local affiliates that have not switched from an analog signal to a digital signal must do so, rendering televisions that are not digital or are without a digital converter box useless."

While the original February 17th transition deadline was scheduled to avoid major television events like the Stanley Cup, today's revised deadline falls right in the middle of the NHL Championship as well as the NBA Finals. If you're a sports fan, there's a lot of incentive to make sure you're prepared for DTV so you don't miss out on some great games.

FCC leading the way in final push to DTV deadline

FCC Marshalls DTV Transition Forces With Drumbeats, Bootheels [Multichannel News]

We're nine days away and counting from the June 12th digital television transition, and the Federal Communications Commission (FCC) is planning to use the final hours before the transition to mobilize volunteers across the country to get every television viewing household ready for digital broadcasts. Yesterday, the FCC announced that AmeriCorps volunteers along with firefighters in cooperation with the International Association of Fire Chiefs will be available to provide in-home assistance on DTV issues to the approximately three million households that still haven't prepared for the transition.

Here's what FCC Chairman Michael Copps had to say about the agency's DTV mobilization plans:

“There is no doubt we’ve made significant progress in reducing the number of consumers unprepared for the transition, but our work is far from over. For many people, free, over-the-air television is their primary source of news, information and emergency alerts – not to mention entertainment. We will continue to do all that we can to find and assist these consumers in the final days before June 12.”

In addition to the DTV volunteers, the FCC is initiating a communications plan that involves daily messaging on the transition each day between now and the 12th. Those communications will serve as a final effort to get the word out to television viewers that they need to take steps to prepare for the transition, if they haven't already done so.

Under Chairman Copps, the FCC certainly is taking a leadership role in the final push to get every American ready for digital television.

If you're a regular reader of my blog, then you're well aware my standard DTV statement by now. As long as all the televisions in your home are connected to cable, then you're ready for the digital transition. If not, give us a call so that we can help you finish your preparations for digital television broadcasts.  But hurry up!  Time is running out quickly.

President Obama announces position to head cybersecurity efforts

Obama on cybersecurity: We're not that prepared [CNET News]

On Friday, President Obama announced the creation of a new cybersecurity director for the nation, to be charged with providing the leadership of America's digital infrastructure's protection. Though the president did not immediately name an appointee to the position, he announced the release of a report by the federal government that reviewed the threats posed to the nation's cybersecurity and made recommendations for combating those threats. That report stresses the need for the nation to have systems to detect and prevent intrusions by hackers and warning systems that would be activated in the event of intrusions. A major theme of the report: cyberthreats should be addressed by the government working in collaboration with private industry, rather than the creation of additional regulation. The report also focuses on maintaining the privacy of individuals using the Internet, while providing for network security, two principles that are potentially at odds with each other.

We learned an interesting tidbit during his Friday announcement when the President noted that his own campaign and Senator McCain's were the targets of hackers last year. Earlier this year, the plans for a new presidential helicopter were compromised by a peer-to-peer application on a military contractor's computer. Even though he's been in office for less than six months, the first President to carry a Blackberry is already dealing seriously with the potential threat of cyberattacks.  He rightly recognizes the need for a comprehensive approach to the nation's security when it comes to the amount of critical infrastructure that is at risk from hackers who intend to do serious harm.

FCC issues report on rural broadband

FCC: Openness, Video Access, Important To Rural Broadband [Multichannel News]

As part of the 2008 Farm Bill, the Congress had directed the Federal Communications Commission (FCC) to report on broadband in rural America. Yesterday, acting FCC Chairman Michael Copps released the FCC's findings. The report indicated that it would be a building block in the larger national broadband strategy that the FCC is currently working on, and that Congress has directed that the FCC report on next February.

The report details the current state of broadband infrastructure in rural areas of the country and outlines a number of issues that the Commission believes are critical to building out that infrastructure to serve more areas that are currently unserved and to increase the adoption of broadband by customers across rural America.

Chairman Copps' report stresses the need for network openness and the adoption of a fifth "network nondiscrimination principle." He would add this to the four principles announced four years ago.  They were:

(1) consumers are entitled to access the lawful Internet content of their choice;

(2) consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;

(3) consumers are entitled to connect their choice of legal devices that do not harm the network; and

(4) consumers are entitled to competition among network providers, application and service providers, and content providers.

Copps cited the fact that many rural broadband users have the choice of only one provider, thus increasing the need for net neutrality, in his view. The fifth network nondiscrimination principle policy has been a goal of Copps for some time. It would add to the enforcement powers of the FCC when it comes to the existing four net neutrality principles that the Commission has already adopted.

The report also stressed the delivery of video services along with broadband as a key factor in rural broadband deployment and adoption. Providers have an incentive to build out their network further into rural areas when they can provide services in addition to broadband, like video and phone. And customers are more likely to subscribe to broadband if it is packaged with video service.

According to the report, the Commission believes that the $7.2 billion that the Obama administration and Congress allocated toward broadband deployment in the economic stimulus act is a down-payment on the larger Commission goal of universal access to broadband across America. The report indicates that the larger national broadband policy report that the FCC will issue next year will further address this issue.

Obama administration plans a national cybersecurity strategy

Washington Readies Cybersecurity Battle Plan [Reuters]

Protecting our nation's important network infrastructure from attack and preventing the theft of data is surfacing as a high priority of the Obama administration. On Friday, the federal government will release an assessment of the government's current cybersecurity efforts, with an eye toward improving the government's ability to respond to a variety of online threats.

President Obama ordered the cybersecurity report in February of this year. The report was completed last month, but remains under review by various federal agencies responsible for the nation's cybersecurity until the end of this week. The Washington Post reports that the president plans to name a senior official to develop the nation's response to the threats posed by online networks as a result of the cybersecurity report. The official would be responsible for creating policy that would secure the nation's government and private networks from attack, and would become part of the National Security Council.

It should be very interesting reading.  The report President Obama has commissioned outlines the threats and the plan proposed to mitigate and eliminate these threats. With the explosive increase in our dependence on online communications, creating a national strategy aimed at comprehensively addressing cyber threats is an idea whose time has come.

DTV call center volume increases during testing

Early Cut-Off Returns: FCC Receives 27,000-plus Calls [Multichannel News]

Yesterday, I wrote about broadcast television stations' plans to perform simulated tests of the digital television transition in preparation for the June 12th DTV deadline. Those tests showed viewers a number to call if they needed assistance in preparing for the digital transition, the FCC's DTV call center number. Today, we're getting a better picture of the calls that were generated as a result of the DTV testing.

According to this article, at 3pm Eastern time yesterday, the FCC's call center had received just over 27,000 phone calls. That's nearly double the average daily call volume of 15,000, and doesn't count the calls received as a result of the DTV tests conducted during the evening news. Just over half the calls regarded the federal government's DTV converter box coupon program. While it doesn't take as long these days for the government to process these requests, they still take around nine days, so there's only so much time left the coupons can be shipped out prior to the transition.

As I said yesterday, if all of your televisions are connected to cable, then you're already prepared for DTV. If not, give us a call so that we can help you finish your preparations for digital television broadcasts.

Data.gov aims to put raw government data in the hands of citizens

White House Launches Data.gov and Seeks Advice on Transparency [Wired: Threat Level]

In a move that confirms the new President's commitment to an online world, one of the Obama administration's key government transparency initiatives hit the web yesterday. Still in its infancy, Data.gov, is set to serve as a portal to digital copies of government agencies' raw data. Want to download the U.S. Census tables for your hometown or find the location of all the copper smelters across the globe, Data.gov has the data sets for free download.

Right now, there are only around 100 different data sets on the site, but that number is expected to grow rapidly over the next few weeks. Data can be grouped by different variables, including the file type of the data. Data.gov has data in XML, CSV, ESRI geo-spacial files and more. The site contains data mining gadgets that promise to help users ferret out the data that they are seeking.

The Federal Government's agencies spend quite a bit of time and money compiling data on a number of issues. I think it's a great idea that this information is being made available in an easy-to-use portal in a standard format, and I'll be waiting to see the additional data that will be posted on Data.gov over time.

Building fiber alongside road projects

If Legislators Have Their Way, Broadband Will Be A Highway [Multichannel News]

U.S. Representative Anna Eshoo (D-CA) has introduced the Broadband Conduit Deployment Act that aims to integrate the construction of new broadband infrastructure with the construction of federally-funded transportation projects. Representative Eshoo's bill would require new federal highway projects to include conduits for fiber optic lines, eliminating the need to dig ditches to install new broadband infrastructure once the road is completed. Here's what Congresswoman Eshoo says about the bill:

“According to industry experts, more than half of the cost of new broadband deployment is attributable to the expense of tearing up and repaving roads. By putting the broadband conduit in place while the ground beneath the roadways is exposed, we will enable any authorized communications provider to come in later and install fiber-optic cable at far less cost.”

Looks like a terrific idea to me. Congress already has appropriated over $7 billion for broadband infrastructure in the economic stimulus bill. Instead of tearing up roadways to lay the fiber conduit necessary to build out broadband networks in the future, why not integrate them with existing transportation projects for huge cost savings?  The bill allows for multiple providers to take advantage of the conduits, so it supports competition.  And Representative Eshoo, who is an uncommonly practical member of Congress, wrote into the bill the ability for the Department of Transportation to waive the conduit requirement, without much hoopla, if they determine it just isn't feasible. 

DTV cliff effect prompts legislation in the U.S. Senate

DTV Cliff Effect Assistance Act Introduced In Senate [Broadcasting and Cable]

We're less than a month away from the deadline for the nation's transition from analog broadcasting to digital. And at least two U.S. Senator are now focused on aiding homes that will continue watching over the air television from encountering the "cliff effect" of digital broadcasts. Simply put, the cliff effect is what happens when a home is out of range of a digital television signal. With analog broadcasts, the picture gradually becomes fuzzier but still watchable the further the TV is from the transmission tower.  With digital broadcasts, the signal is all-or-nothing, and would likely be nothing for the home that received a slightly snowy version of the analog broadcast. Digital television signals are also more susceptible to degradation by surrounding landforms and buildings, meaning that a mountain might have more of a blocking effect on a digital signal than it has on the older analog transmission.

Senators Olympia Snowe and Susan Collins, both Maine Republicans, have introduced a piece of legislation entitled the DTV Cliff Effect Assistance Act, which would allocated $125 million for the construction of digital repeaters and translator towers to push digital broadcast signals further out to homes in more rural and isolated areas. The bill would also double as a broadband stimulus bill for wireless Internet providers because the senators stipulate that the towers be made available for that purpose as well.

The legislation would not impact next month's DTV deadline, regardless of whether it is passed within the next thirty days. Remember, if you're one of those who remain unprepared for the digital transition, give us a call. Insight already has worked with thousands of customers to make sure all of their televisions are ready for DTV. We'd be glad to do the same for you.  But don't wait until the last minute or you might find yourself at the end of the cue that formed with other holdouts.

Broadband stimulus aims to provide broadband Internet to the unserved

The $7.2 Billion Question [Multichannel News]

Part of the $787 billion federal economic stimulus enacted by Congress and signed by President Obama this year was specifically earmarked for the expansion of broadband into areas that are currently unserved or underserved. The Broadband Technologies Opportunity Program provides for $7.2 billion in government grants to map and expand broadband. Multichannel News' cover article yesterday asked the several mid-sized cable operators about their take on the broadband stimulus.

Some of the operators interviewed for the article expressed concerns about the strings attached to applying to the federal government for capital to expand their networks. Others questioned whether grants would be offered to entities that could use the funds to build networks in "underserved" areas that would compete with existing providers.  The problem is whether government money should be spent in "underserved" areas and, if so, what is the definition of "underserved." 

The questions are tough enough about how to serve the truly unserved areas - those in areas where the density of homes is so low that there's not a sustainable investment return model to justify building and maintaining network infrastructure. Will the broadband stimulus funds be able to be directed only at those low density unserved areas, or are the costs to maintain and service a network in those areas make it non-economic no matter how much money the federal government pushes out to subsidize the building of network infrastructure?  Great question.

Multichannel's article also focuses on the broadband take-up rate in rural areas.  Specifically, a report from the Pew Research Center's that raises questions about whether there are other barriers to rural broadband adoption other than simply availability. On the other side of that argument is a group of rural ISPs that recently gathered at the National Press Club, and told an ArsTechnica reporter that the Pew study's conclusions were wrong and the demand for broadband in rural communities actually is very high.

The Obama administration aims to move the broadband stimulus funds out to grantees as quickly as possible to serve the purpose of the overall economic stimulus bill - to create good jobs with the goal of pulling the national economy out of its funk. We'll soon be reading about the innovative pitches that broadband providers and others will be making to the federal government for the use of these funds. 

However, we must be careful that we don't expend billions in areas already served by broadband before we bring the essential service to areas that remain unserved.  Unserved areas should be the priority in the stimulus as it will not only bring broadband to those who otherwise would never get it, but it will also create network construction jobs quickly and efficiently -- the primary goal of the stimulus package.

House subcommittee holding hearing on addressable advertising privacy

Canoe Ventures Part Of House Hearing On Online Privacy, Targeted Marketing [Multichannel News]

The U.S. House Communications, Technology & Internet Subcommittee is holding hearings today focused on Internet and television viewers' privacy rights, specifically privacy when it comes to addressable advertising. With the advent of products like Google's behavioral-based AdWords web ads and the cable industry's Canoe venture, which aims to provide relevant, addressable advertising to cable television viewers. Testifying at today's hearing on behalf of the cable industry is NCTA President and CEO Kyle McSlarrow.

Its important to note that Canoe doesn't track usage habits to determine which ads are most relevant to display (like Google's AdWords). Canoe's addressable advertising technology delivers ads to groups of households based on third-party market research data. Here's Canoe's response to the congressional inquiry about user privacy.

"Community addressable messaging does not use deep packet inspection, personally identifiable information, nor set-top box data," said the company. "Cable subscribers already are notified about the general use of third-party demographic data via cable operator privacy notices. As we build a common foundation for advanced advertising capabilities that TV networks can use to make ads more relevant, useful and engaging for customers, all of our products are being developed with consumer privacy protection at the forefront."

It's important that in creating and implementing new technologies to deliver more relevant ads for users, that those users' privacy of personal information is respected. Canoe's ad-serving technology plans involve a process that is transparent to users and protects their private data.

Time Warner places consumption-based billing test on hold

Time Warner Cable announced late last week that they would postpone their test of consumption-based billing for broadband service.  Flat-rate proponents may be reveling in the belief that they won the mother of all battles and if this was a permanent nail in the coffin of consumption-based billing, I'd say that might be true.  But Time Warner announced a postponement, not a cancellation, in order to hear more from customers.

Here's part of what CEO, Glenn Britt said in announcing the delay.

"...we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met," Britt continued. "While we continue to believe that consumption-based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process."

Unfortunately many broadband customers, both in the Time Warner Cable test markets and elsewhere, have only heard the misguided arguments of opponents of metered broadband. In an attempt to communicate the other side of the issue, let me explain, in bullet-point form, why consumption-based billing is actually pro-consumer.

• Networks would be more aggressively upgraded for new and advanced services
• ISPs could stop or reduce managing their networks during peak periods
• Online video would be more available and deliverable on upgraded networks
• Legal P2P services would be faster and more available
• Only a small percentage of customers would pay more (those who use the most bandwidth)
• Light users would pay less
• Most would see no change in their bill at all

Ironically, America's second-largest cable operator got into this situation partially because they were being totally transparent about their plans at a very early stage of their thinking.  Perhaps it was too early because their plans hadn't be finalized. Indeed, they were still listening to consumers as they were developing the program.  They also were totally unprepared for the onslaught of misinformation and misunderstanding that would swirl up around their plan.

Even without starting their test, I think the folks at Time Warner already have learned a lot.  Unfortunately, it has nothing to do with the fairness, accuracy or acceptability of usage-based billing.  The only way to answer those critical questions is by going forward with the very test Time Warner delayed. 

Customers have become accustomed to paying a monthly bill for unlimited broadband and if ISPs are going to change that paradigm, it's incumbent upon them to explain the benefits to customers.  Time Warner did learn some things though -- that ISPs have to be much clearer on what they are planning, and carefully and must simply explain why it would be beneficial to consumers. ISP's also need to be much clearer about who would pay more, who would pay less and who would pay the same when considering such a change.  

If this emotion-charged issue results in a prohibition of usage-based billing, an ISP's ability to aggressively keep up with demand will be financially compromised.  That will limit the speed of important upgrades thus limit the expansion of new bandwidth-consuming new services.  At the end of the day, everyone ultimately will pay more for extremely heavy usage by a small minority of customers.   

Also AWOL from this conversation -- consumption-based billing creates an environment that encourages consumers to become responsible self-regulators of network resources.  That's a really good thing because it means that ISPs won't need to manage consumption for their customers.  I've previously written that 5% of our customers would use over 80% of our network resources if the network was left unmanaged.  Indeed, some of the leading critics of Time Warner's plan previously endorsed metered billing as a solution to the need to manage Internet traffic. 

I suppose there's also a bigger thing going on here.  Americans are sick and tired of the recession and they blame big business for it.  Although there is plenty of blame to go around, there also is plenty of evidence to suggest that a lot of industries, particularly financial institutions, were terribly out of control, leading up to our economic woes.  A new era of regulation is both popular and probably necessary. 

But let's not go crazy either.  Broadband is dynamic, job-creating and increasingly a central part of the future of communications and entertainment. 

And it's very competitive.  Fact is, if customers didn't like Time Warner's billing policies, they could call up Verizon, AT&T or anyone else that competes against them in their markets. 

So, let's not knee-jerk react to regulating everything that moves.  History consistently has proven that real innovation is born out of entrepreneurship and free markets. 

This issue will take a rest for a while.  But it's important that we keep talking about it.  Time Warner was not looking to gouge their customers without regard for their ability or desire to pay.  They simply were  seeking an answer about how to cope with the rapidly changing nature of broadband services that are being launched today.  We either have to be flexible or we will seriously lag the rest of the world in broadband acceptance for years to come. 

And that's not good for anyone.

Congress investigating potential shortage of DTV converter boxes

Congressmen Want To Take Stock Of Converter Boxes [Multichannel News]

Members of the U.S. House of Representatives providing oversight to the federal government's DTV converter box coupon program are concerned that the demand for converter boxes prior to the June 12th DTV deadline may outstrip the supply available from manufacturers. To that end, House Energy and Commerce Committee Chairman Henry Waxman and Communications, Technology and Internet Subcommittee Chairman Rick Boucher have sent a letter to manufacturers and retailers of the converter boxes seeking information about how many boxes they currently have available, the maximum number of boxes that could be made available to customers and other questions.  The chairmen are attempting to determine whether there will be enough boxes for customers who wait to the last minute to prepare for the digital transition.

Gary Shapiro, who testified on behalf of the Consumer Electronics Association in an earlier oversight hearing on DTV, estimated that 4.2 million converter boxes would be needed before June 12th. Chairman Boucher believes that the number of boxes needed could be as high as 5.5 million, basing his estimate on the number of active DTV coupons. The letter seeks to determine whether manufacturers and retailers are prepared to meet that additional estimated need for converter boxes.

Rather than relying on the government to determine whether or not there are enough coupons or converter boxes, consumers can prepare for the digital transition simply by giving their local cable provider a call. All televisions connected to cable are ready for the transition, regardless of the availability of DTV coupons or converter boxes.

Cable Show Highlights (Well, maybe not exactly)

The NCTA's Cable Show was a big success by almost all accounts.  More than 12,000 people attended the confab in Washington, DC, 2,000 more than expected and slightly in excess of last year's tally.  Well over 100 members of Congress and 300 regulators, administrators and staffers visited the show, particularly Broadband Nation, the impressive display of futuristic broadband services.

A few highlights...

• Who said a roomful of techies can't be nimble?  Some of the industry's best known technical strategists proved their impressive ability to dodge a tough question.  Jim Chiddix, Time Warner's former tech guru moderated a panel and asked the current crop of chief geeks about whether they would cancel their pending deliveries of set-top DVR's if Cablevision wins its appeal to allow them to deploy network DVR's.  Since other operators have been waiting on the sidelines before declaring whether they support the technology until the Supreme Court rules, here's how they responded..."Mike?" Chiddix asked, looking at Mike LaJoie, his successor at Time Warner.  "You must mean Mike Lee," LaJoie answered, throwing the hot potato to the Rogers top strategist.  I agree with Mike," answered Lee.  And in an apparent desire to have total clarity, Tony Warner, Comcast's CTO weighed in too.  "Ditto."

• Rupert Murdoch believes the recession will last until the end of next year.  He also announced he will sell his Long Island house because the local taxes are going from $3,000 to $7,000 per year.

• On what it's like to compete against Verizon, Cablevision's Tom Rutledge said that, because Cablevision continues to grow their customers despite the competition, "it annoys them (Verizon).  They're a bit like a Sumo wrestler.  They like to throw their belly out."

• Even the current FCC Commissioners are celebrating the change of regime in the Chairman's office.  Jonathan Adelstein, who soon will leave the agency to take the reigns at Rural Utilities Service, expressed relief that staffers were now allowed to answer questions posed to them by the commissioners.  Fellow commish, Robert McDowell said it was nice to see people in the elevators no longer, "looking at their shoes."  He added that one of the first things Chairman Copps did was to remove the sign that said, "The beatings shall continue until morale improves."  He added, "morale improved."

Rachel Maddow at the Cable Positive Power Awards

Yesterday I had the pleasure of participating in Cable Positive's Power Awards ceremony, where Rainbow Media Holdings CEO Josh Sapan was recognized with the Joel A. Berger Memorial World for his outstanding work in the fight against HIV/AIDS and Charter Communications CEO Neil Smit received the Cable Positive Corporate Leadership Award. Cable Positive is the cable industry's public service organization dedicated to raising HIV/AIDS awareness, supporting HIV/AIDS education, prevention and care, and ending the stigma surrounding the disease. Each year America's cable operators provide millions of free air time for public service announcements produced by Cable Positive.

This year's awards had a special guest that I was privileged to introduce. Rachel Maddow, host of MSNBC's "The Rachel Maddow Show" presented the Cable Positive Power awards to Josh and Neil. She shared her own experiences as an HIV/AIDS activist with the audience that gathered at Cable Positive's booth on the exhibit floor here at the Cable Show.

Here's some video of my introduction and Rachel's remarks prior to recognizing Josh and Neil for their and their companies' important contributions to the work of Cable Positive.

A shot across the bow at the Cable Show

Disney warns cable on restrictive Web TV [The Washington Post]

I mentioned yesterday that I was going to fill-in on a panel here at The Cable Show. The Washington Post has posted an article about the panel's discussion on several issues, including the convergence of television and the Internet when it comes to video content. It's a debate that I've written about in previous posts .

Prior to my panel, I was honored to introduce Disney CEO Bob Iger for the keynote speech.  I spoke from the heart when I said that he has proven to be a guy who "gets it."  That he is a true innovator. 

But I was confused when he warned cable distributors to think twice about making plans to create subscriber-only portals.  He was specifically directing his comments toward Comcast's announced plan to launch Online On Demand and Time Warner's TV Anywhere.  Both portals are being designed to extend the viewing options of their current customers to include online capability.  Sounds pretty user-friendly to me.

Here's what Bob said:

"Preventing people from watching any shows online, unless they subscribe to some multichannel service, could be viewed as both anti-consumer and anti-technology, and would be something we would find difficult to embrace."

Why was I confused? 

Because Disney, which owns ESPN, created and operates a major subscriber-only portal, ESPN360.  Although ESPN360 is available to all Insightbb customers because we have a deal with Disney, it is not available to millions of Broadband customers whose ISP does not have a deal for distribution. 

Perhaps Disney thinks of their service because they don't bill customers directly -- they require the ISP to pay.  But I don't accept that differentiation.  Why don't I?   Because, in the real world, it simply means that consumers indirectly pay Disney, through their ISP. 

This morning, as I was writing this post, I tried to access ESPN360 from my hotel room and here's what I got, in the form of a big red pop-up:

ESPN360.com is available at no charge to fans who receive their high-speed internet connection from an ESPN360.com affiliated internet service provider. ESPN360.com is also available to fans that access the internet from U.S. college campuses and U.S. military bases.

Your current computer network falls outside of these categories. Here’s how you can get access to ESPN360.com....

Isn't this a double standard? 

Don't get me wrong.  I fully approve of the concept of ESPN360.  During the panel discussion that followed his speech, we spoke specifically about how important it is for programmers and distributors to embrace new technology, including the use of the Internet to deliver video.  But I also cautioned that there has to be a business model that won't destroy the economics of content creation which could pile on to the woes of the economy.  ESPN360 offers a viable solution to my concern. 

What's really in play here is not whether it's good or bad to offer content over the Internet on a subscription basis.  I guess I'm just troubled by the use of this issue to wage a fight over who gets to aggregate that content.