Written By November/December 2010 : Page 49

Written by Charles B. Slocum Dumb Pipes, Open Platforms, Consumers’ Right to Choose Four Public Policy Questions that will shape the future of TV and the Internet 1: Open Pipes and the Consumers deserve dumb pipes. It works for the telephone, and it is the only way to enable market competition for video via the Internet. Internet Freedom is the most funda-mental, enabling condition at issue in our current policy debates. Opponents to Internet Freedom offer protection-ist anticompetitive hopes cloaked in language about their freedom. But that puts the question in sharp relief: Are we protecting the freedom of the cable companies and telecoms to strangle the Internet so they can make a profit, or are we protecting the freedom of citizen-consumers to get to any video content they choose, via any provider they choose? The phone company can’t tell you who you can call or set higher prices for calling some people over others. The cable company, on the other hand, can absolutely dictate which channels you can receive. That cable company power was based on the technical limi-tations of the cable television wires. The Internet is built like the phone system—with a network of infinite ca-pacity—and it ought to be treated just like the phone system, with no ability of the company providing the wire to restrict or tax your use of the wire. If the providers of Internet con-nectivity want to profit from content, they can buy content companies. As it happens, Comcast is trying to do just that. They’ll profit the same whether the greater value is attached to the con-tent or to the delivery of the content. The citizen-consumer, and our democ-racy, however, only benefit if the free exchange of ideas protected by the First Amendment flourishes. without any significant competitors. Not since the trust-busting more than a century ago have entrenched oligopo-lists seen such a sweet target as captive Internet rights, nor such a powerful threat to their incumbency as the de-linking of cable TV and Internet rights. The skirmishes over Internet Freedom will look like schoolyard bullying when this issue gets joined. That is, if the issue is joined. The cable companies and telecoms, so far, have kept this a private contractual matter. But the public interest in com-petition for delivery of television con-tent has fierce advocates as well. This debate will test the mettle of both. 3 television Channel Bundling 2 Cable/Online rights exclusivity Linkage This is the most political of the policy issues. Telecom and cable TV compa-nies see the easiest, noncompetitive path to the future in perpetuating their existing oligopoly. If they can trap the Internet rights to the content they cur-rently pay for, they can go forward The journey to the promised land of Internet-delivered video starts where we are, which is with an industry that uses channel bundling to overcharge consumers and to eliminate competi-tors offering new cable channels. This should be eliminated in cable, but it must be prevented as video migrates to the Internet. If Comcast delivers cable to your home, should they be the only one al-lowed to deliver that content via the In-ternet? They want to be. The companies that own the cable channels cooperate with this because Comcast lets them fill up empty channels with placeholders that block new competitors. This bundling is technically illegal, 2010 WGA W Written By NOVEMBER/DECEMBER iSTOckpHOTO • 49

Dumb Pipes, Open Platforms, And The Consumers’ Right To Choose

Charles B. Slocum

<b>1: Open Pipes</b><br /> <br /> Consumers deserve dumb pipes. It works for the telephone, and it is the only way to enable market competition for video via the Internet.<br /> <br /> Internet Freedom is the most fundamental, enabling condition at issue in our current policy debates. Opponents to Internet Freedom offer protectionist anticompetitive hopes cloaked in language about their freedom. But that puts the question in sharp relief: Are we protecting the freedom of the cable companies and telecoms to strangle the Internet so they can make a profit, or are we protecting the freedom of citizen-consumers to get to any video content they choose, via any provider they choose?<br /> <br /> The phone company can’t tell you who you can call or set higher prices for calling some people over others.<br /> <br /> The cable company, on the other hand, can absolutely dictate which channels you can receive. That cable company power was based on the technical limitations of the cable television wires.<br /> <br /> The Internet is built like the phone system—with a network of infinite capacity— and it ought to be treated just like the phone system, with no ability of the company providing the wire to restrict or tax your use of the wire.<br /> <br /> If the providers of Internet connectivity want to profit from content, they can buy content companies. As it happens, Comcast is trying to do just That. They’ll profit the same whether the greater value is attached to the content or to the delivery of the content.<br /> <br /> The citizen-consumer, and our democracy, however, only benefit if the free exchange of ideas protected by the First Amendment flourishes.<br /> <br /> <b>2 Cable/Online rights exclusivity Linkage</b><br /> <br /> This is the most political of the policy issues. Telecom and cable TV companies see the easiest, noncompetitive path to the future in perpetuating their existing oligopoly. If they can trap the Internet rights to the content they currently pay for, they can go forward Without any significant competitors.<br /> <br /> Not since the trust-busting more than a century ago have entrenched oligopolists seen such a sweet target as captive Internet rights, nor such a powerful threat to their incumbency as the delinking of cable TV and Internet rights.<br /> <br /> The skirmishes over Internet Freedom will look like schoolyard bullying when this issue gets joined.<br /> <br /> That is, if the issue is joined. The cable companies and telecoms, so far, have kept this a private contractual matter. But the public interest in competition for delivery of television content has fierce advocates as well. This debate will test the mettle of both.<br /> <br /> <b>3 television Channel Bundling</b><br /> <br /> The journey to the promised land of Internet-delivered video starts where we are, which is with an industry that uses channel bundling to overcharge consumers and to eliminate competitors offering new cable channels. This should be eliminated in cable, but it must be prevented as video migrates to the Internet.<br /> <br /> If Comcast delivers cable to your home, should they be the only one allowed to deliver that content via the Internet?<br /> <br /> They want to be. The companies that own the cable channels cooperate with this because Comcast lets them fill up empty channels with placeholders that block new competitors.<br /> <br /> This bundling is technically illegal,But pricing and carriage requirements are used to achieve it by another means.<br /> <br /> Content Access rules have long been established to prevent cable operators from withholding content from satellite providers. These should be extended to Internet competitors and should extend to unbundling as well as access.<br /> <br /> <b>4 Cable tV Set-top Box and internet Video interoperability</b><br /> <br /> Delivering the Internet to the television set requires a box of some sort to connect the two. The boxes installed in 90 percent of homes are provided by the cable companies, which have no plans to be cooperative in this transition, since it means lost revenue to them.<br /> <br /> The success that the cable companies have had is demonstrated by the existence of exactly one successful provider of consumer-provided set-top boxes: TiVo. Yet the ability of consumers to buy their own set-top box has been a government mandate for more than a decade.<br /> <br /> The primary purveyor of speedbumps to frustrate consumer adoption of the required access is called Cable- Labs. This is a cable-industry group accepted by the FCC as the gatekeeper for compatibility. Set-top boxes have to confirm that a subscriber has paid their cable bill, of course. The approved method for third-party boxes to authenticate The consumer’s account status is called the CableCard. Even if you buy your own TiVo, you have to rent a CableCard from the cable company.<br /> <br /> Insert it into a slot on the back of the box and you get authenticated.<br /> <br /> On top of this, a new technology to offer a greater number of channels called Switched-Digital-Video requires the use of a Tuning Adapter for Ti- Vos to access the additional channels.<br /> <br /> Both of these technologies are finicky enough that they frustrate more attempts to replace the cable company Set-top box than they enable.<br /> <br /> Recent FCC action is designed to fix the loopholes that the cable industry trucks have been rolling through, but these are band-aids at best. There are new rules under consideration that would require cable set-top boxes to integrate the Internet, known as the Internet/Video gateway. This policy would require that all set-top boxes, whether supplied by a cable company or the consumer, integrate both cable channels and Internet-delivered video.<br /> <br /> This, and the replacement of the CableCard technology with something that truly enables cable channels to be accessed by a consumer-provided settop box, could unleash the innovation dozens of companies seek to pursue.<br /> <br /> Comcast, Time Warner, Verizon, AT&T, and their incumbent cable television colleagues are lobbying hard to prevent this. No arguments—from public safety and national security, to the principles of capitalism and freedom— are spared. Comcast alone has more than 400 lobbyists working the 100 U.S. Senators and 435 U.S. Congressional Representatives.<br /> <br /> The problem is that a natural oligopoly exists in the provision of television and Internet services via a cable to the home. The cable company and the telephone company have run wires from their offices to your home or of-Fice and no one else can afford to do that now that they have. Traditionally, the market power that comes with this kind of economic barrier to entry for new competitors is held at bay by government regulation.<br /> <br /> We’ve gotten so infatuated by capitalist ideas, however, and so convinced that what’s good for big businesses is good for citizens, that the oligopolists who provide cable TV and telecom video services have seized the opportunity to argue that they must be allowed to exclude new competitors rather than be required to let consumers have a choice. Only government policy requiring an open standard will restore choice to consumers.<br /> <br /> Lower long-distance phone prices and the choice of telephone equipment seems routine now, but it was government regulation that forced AT&T to accept consumer’s choosing a different long-distance provider or buying their own phone. With regulation, services got better and prices went down with open access counterbalancing the monopoly power that AT&T had. True consumer-chosen television-Internet interoperability, without cable industry obstacles, must be required by law before consumers will have real choice when they hold their remote control.<br /> <br /> The immediate opportunity for all These policies to gain a foothold is in the Comcast/NBCU merger. All these policies should start as conditions limiting Comcast/NBCU and proceed to become enacted policies in their own right. In the end, the achievement of the much-sought integration of television and the Internet—providing consumers with access to the video content they want, when they want, from whom they want to buy it—will be a political achievement, not a technical nor business one. The incumbent video providers are working hard to prevent this from happening, spending their profits taken from their customers to fight against Internet Freedom. So far, they’re succeeding.<br /> <br />

Previous Page  Next Page


Publication List
 

Loading