[opendtv] Re: Wheeler Makes It Official: It's Title II for ISPs | Multichannel

From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
Date: Wed, 11 Feb 2015 13:35:02 -0500
> On Feb 10, 2015, at 9:42 PM, Manfredi, Albert E 
> <albert.e.manfredi@xxxxxxxxxx> wrote:

> The truth is, regulation did not address the reasons why prices could keep 
> climbing uncontrollably.

It certainly did. The regulation addresses the average cost per channel; the 
rate of increase for the “average” is regulated. 

The problem is that the way the law is written, prices can be increased if new 
channels are added to the bundles offered. SO the number of channels keeps 
increasing driving up total cost, even as the cost per channel remains 
relatively constant.


> The reason was lack of any credible competition among the service providers. 

One can argue that there is no competition, although almost every home has the 
choice of three providers, and some have access to four. 

The problem is that every service wants the core channels of popular networks, 
both broadcast and non-broadcast - they cannot compete without them.

The real reason for the lack of competitive differences is the tactics used by 
the content owners. They require every MVPD to license the entire package of 
channels offered by each content owner in order to carry the popular channels. 
This is well documented and happens every time the license agreements come up 
for renewal.


> What the FCC might have done, perhaps, is regulate the prices as local 
> governments do for power. I already showed you how that keeps the cost of 
> power down. The FCC could also have mandated connection standards and so on. 
> But really, more competition would solve these problems naturally.

Rates are regulated by the local franchise authorities. The FCC rules just 
establish the limits set by the 1992 cable act. Much of this was covered in the 
FCC rules I linked to several days ago.

> 
> But competition among broadband providers is still not in the cards, not 
> until maybe 5G cellular.

Time will tell. It remains to be seen what impact the new FCC rules will have 
on investment in infrastructure.

> Not at all. The Internet for the masses became successful *only* thanks to 
> Title II phone lines, yes. But that didn't begin until 1991. Before that, the 
> Internet was already being used by DoD and by universities. So it was neutral 
> then, simply because there were no commercial conflicting interests involved.

You are correct that the early Internet was mostly limited to DARPA and 
academics. The early ‘90s were mostly about e-mail and proprietary services 
from CompuServe, AOL, Prodigy and Genie. 

Mass adoption of the Internet really started after Netscape Navigator was 
commercialized and the OPEN Internet gave businesses and individuals the 
ability to create web sites. 

It is perhaps a bit ironic that Title II provided the early connections, but 
the content was ANYTHING but neutral. In essence you could choose among several 
walled gardens that did not connect to one another. 

The conflicting commercial interests lost the war to the open standards you 
love so much.
> 
> With broadband, of course it becomes even better than it was with dialup, 
> because it carries that much more varied traffic effectively.

The variety resulted from improved connection speeds offered by broadband. This 
enabled the sharing of music and still images, and eventually video. While 
improved connection speeds were important, the ability to create new and 
innovative businesses is what won the day.
> 
> The problem now is that those few broadband providers that can credibly exist 
> have a conflict of interest, which only seriously emerged in the past handful 
> of years, so they threaten neutrality to favor their own non-neutral 
> services. And quite honestly, they did this to themselves. That Comcast vs 
> Netflix debacle was one really dumb move, if you take the longer view. It got 
> people all wound up.

The Comcast/Netflix move was a non issue. The congestion was being caused by 
Cogent, the Netflix CDC. The problem was resolved by the deal between Netflix 
and Comcast, which was nothing more than a direct interconnection agreement 
rather than using a third party CDC that could not keep up with demand. I 
posted a story about this, which you blew off because it was an opinion piece 
from Fox News <http://news.com/>.
> 
>> The MVPDs are going forward, moving their services to the
>> Internet,
> 
> Some are, like Dish. Others, like TVE, are trying to put old constraints on 
> the Internet unnecessarily.

TVE IS NOT a MVPD service. It is a strategy to make the content of many of the 
networks that are carried by the MVPDs available to subscribers via the 
Internet. It does not put any constraints on the Internet. Rather, it allows 
the consumers who are paying for this content to access it in new ways. 

Does Amazon Prime or iTunes place constraints on the Internet?


> Tell me when you can subscribe to Comcast TVE, Craig.

You cannot subscribe to TVE Bert. These sites are available to subscribers of a 
MVPD service - they are not operated by the MVPDs. 

Comcast does not host TVE sites. The content owners control the TVE sites - if 
a Comcast subscriber tries to access Watch ESPN or HBO Go, the servers check 
with a server at Comcast to verify that the consumer trying to access the site 
is indeed a valid subscriber to the service. 

When I, as a Cox Cable customer, access the Watch ESPN site I am accessing the 
same server as the Comcast customers - a site built and operated by ESPN. -I 
can’t access HBO Go because I do not subscribe to the HBO premium service.  

> And when you can, I'll bet you that the bundles they offer won't resemble any 
> of the traditional ones.

Comcast has not announced a VMVPD service like Dish. They have focused their 
energy on a proprietary enhancement to traditional MVPD service called Xfinity. 
Comcast hosts a very large library of TV content for VOD consumption - this is 
not an Internet service, it is delivered via the MPEG-TS side of the house. 

With the introduction of Dish Sling, it is clear that the content owners are 
now willing to offer popular channels without requiring all the other crap. 
They are doing this because they want to reach young viewers who have either 
cut the cord or are cord never. 

What I can’t understand is why you care?  

Other than Amazon Prime, do you pay for any other TV service? Are you going to 
subscribe to Sling?

Regards
Craig
References:
- [opendtv] Re: Wheeler Makes It Official: It's Title II for ISPs | Multichannel
  - From: Manfredi, Albert E
[opendtv] Re: Wheeler Makes It Official: It's Title II for ISPs | Multichannel

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