As mentioned previously, each week on the front page of NCTA’s website, we highlight a relevant statistic. This week’s is worth taking note of.

With the five largest cable operators having reported results for the first quarter of 2008, there are now 16.2 million customers receiving phone service from the cable industry…

…and counting.

This is incredible growth if you look back over the past decade.

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Insight Communications CEO Michael Wilner recently launched a new blog discussing his company’s take on telecom policy. In the time the blog has been up, he has tackled issues from cable investment in wireless technology to customer service, and from a la carte to network management.

Yesterday’s post, titled Confessions of a Network Manager (Part I) takes a look at the consumer friendly reasons for network management practices. It’s a good read, and like much of his writing is a candid look at why operators manage their networks, why that’s good for you, and even a frank discussion of why companies would not want to talk openly about specific practices.

Network management is not your enemy — it is your friend, even if you’re a P2P enthusiast. Without network management, everyone’s online experience would melt down to a completely useless exercise. It would reduce the Internet to a chaotic free-for-all as if you built a 10-lane superhighway and didn’t have any traffic laws in place to keep the traffic moving.

The fact is, network management is absolutely necessary throughout the Internet, from the ISP’s all the way through to backbone providers. It happens everywhere on the Internet. And it’s a good thing that it does.

Bandwidth, throughout the Internet, is a shared asset. Accordingly, we all have to learn to live with one other as good neighbors. You don’t go to Joe’s Barbecue, an all-you-can-eat buffet restaurant, and proceed to eat all the food. The goodies are affordable because they are offered under law of averages and a shared economic model. If my brother-in-law, Norman, and a few of his buddies showed up every night, Joe would either have to raise the price for everyone or start charging by the pound.

I guess, to some extent, we created this debate ourselves. Many of us, myself included, didn’t really want to talk about how we managed our networks to keep the traffic flowing smoothly. We simply did it. Frankly, I believed that if we were totally transparent about it, certain people would figure out ways to defeat the rules of the road, making our management practices harder and more intrusive than we were wanting them to be.

Much of his writing is similarly inviting and personal. If you’re not reading it, you should take a look.

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It’s been expected for a while that a city might serve as a test case for the coming Digital Television Transition (scheduled for Feb. 17 next year). It’s now been announced that Wilmington, NC will be that test market.

From this morning’s L.A. Times:

The Federal Communications Commission plans to announce today that broadcasters in the coastal city of about 96,000 — the nation’s 135th-largest media market — will turn off their analog signals permanently on Sept. 8. That is about five months before the government-mandated switch-over in the rest of the country Feb. 18.

“We think it’s going to be a good thing for the community and it will pave the way for the rest of the country,” said Wilmington Mayor Bill Saffo.

FCC Commissioner Michael J. Copps had proposed a test market so officials could work out technical glitches and outreach problems with the digital transition, which will render older TVs that use antennas useless unless they’re outfitted with special signal converter boxes.

“It’s just nonsensical to think you can go into a transition like this and pull the lever one time for the entire country and not expect to have real consumer confusion,” Copps said Wednesday. “Even Broadway plays open on the road and you get the kinks out.”

The FCC confirmed the announcement today.

We issued a statement this afternoon from our President & CEO Kyle McSlarrow:

NCTA has previously indicated our support for the concept of a test market, and the cable industry has been working closely with broadcasters and other stakeholders to ensure that the February 2009 transition is seamless for television viewers. We applaud Commissioner Copps for proposing the concept of a market trial, and we look forward to working closely with the FCC so that local cable operators are able to help make the Wilmington test pilot – and the full February 2009 broadcast transition – a good experience for consumers.

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Today, NCTA President & CEO Kyle McSlarrow testified before the House Committee on Energy and Commerce hearing on “H.R. 5353, the Internet Freedom Preservation Act of 2008.” Two weeks ago, he testified before the Senate Committee.

He spoke of his time at an Internet start-up in the late Nineties, in a dial-up world. From his position, he said he was cheering on the cable industry to roll out broadband. He mentioned “open access,” the previous version of the network neutrality debate, which bears striking similarities to the current discussion. Over the last 14 years, as cable modems have taken off and increased the available bandwidth and over that time, McSlarrow noted, cable’s broadband service has never been regulated.

 

 Kyle McSlarrow Testimony on "H.R. 5353, the Internet Freedom Preservation Act of 2008": Play Now | Play in Popup | Download

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The Subcommittee on Telecommunications and the Internet will hold a hearing tomorrow, May 6, at 9:30 a.m to cover “H.R. 5353, the Internet Freedom Preservation Act of 2008.” Witnesses will discuss the proposed legislation, which would direct the Federal Communications Commission (FCC) to assess competition, consumer protection, and consumer choice issues relating to broadband Internet access services, including network neutrality. The bill was introduced by Reps. Edward Markey (D-MA), Chairman of the Subcommittee on Telecommunications and the Internet, and Chip Pickering (R-MS).

NCTA’s Kyle McSlarrow will testify as will Mitch Bainwol of RIAA, Walter McCormick of US Telecom, and several others. Look for Kyle to make many of the same points he made in testimony before the Senate Commerce Committee on April 22, and in his post on network management here.

The efforts of broadband network providers to build larger and faster networks have helped ensure the success of countless numbers of new Internet businesses and applications. Despite concerns about alleged limited access to broadband, use of Internet video on demand has grown at the most dramatic rate. In February 2008, nearly 135 million U.S. Internet users spent an average of 204 minutes viewing 10.1 billion online videos. YouTube represented 34% of those online videos, or nearly 3.5 billion.

For years, net neutrality proponents have argued that without government intervention, broadband providers would stifle competing services and content providers; Internet development and usage would stagnate; and consumers would be unable to use their broadband connections to download video or access other emerging applications. In fact, cable’s investment in broadband has driven innovation and investment in new content and applications at the edge — the exact opposite of what was predicted by advocates of net regulation. …

Far from being “neutral,” a network that is not managed simply allows those who want to demand all the bandwidth for themselves to do so unchecked. …

Under the guise of preventing discrimination, “net neutrality” proponents would have the government determine which network management techniques are permissible. Putting every network management strategy up for debate before regulators would severely hamper the ability of network providers to ensure high-quality and reliable Internet access for their subscribers. Depriving network operators of certain bandwidth management tools only makes the network less efficient for everyone. Adept network optimization techniques are fundamental to creating and preserving the stable “ecosystem” for online service providers that ensures an optimal customer experience.

Misplaced concerns over legitimate and reasonable network management practices do not justify the enactment of open-ended regulation of the Internet, particularly where the costs of such regulation are foreseeable and substantial. Given the growth of broadband competition and the breathtaking pace of technological change, government intervention is unwarranted. As the Federal Trade Commission has warned, regulation of Internet access at this stage of market development could have “potentially adverse and unintended effects,” including reduced product and service innovation.

Congress should resist calls to interfere with broadband providers’ freedom to manage their respective networks in order to satisfy the evolving needs of American consumers. The disaster scenarios voiced by network neutrality proponents for many years have never happened. In fact, the opposite has happened — the Internet is booming without regulation. There is quite simply no problem requiring a government solution.

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For about a year now, NCTA has been shining a light on the DOCSIS 3.0 specification. Thanks to channel bonding, cable operators will be able to offer wideband service to consumers, with speeds exceeding 100 Mbps downstream. About a month ago, we noted the first deployment of DOCSIS 3.0 in the U.S.

A new article in CED Magazine (”DOCSIS 3.0 arrives“) takes a look at deployments by Videotron and Comcast.

After a year-long trial, [Canadian operator] Videotron is serving up two tiers of the wideband service with speeds of 30 Mbps and 50 Mbps. The slower “Ultimate Speed” costs $64.95 a month while the faster speed checks in at $79.95 a month.

Currently, Videotron’s Ultimate Speed services are available to 112,000 homes in Quebec, with the goal of offering the service to Videotron’s entire footprint of 933,000 homes by next year.

The article notes that, although Videotron didn’t need to do so, some operators may need to use Switched Digital Bandwidth to free up additional DOCSIS channels.

Comcast also picked a system where it wouldn’t need to clear room for more spectrum when it unveiled its first wideband deployment last month in the Minneapolis/St. Paul area with speeds of 50 Mbps on the downstream and 5 Mbps on the upstream.

The service is available to residential customers for $149.95 a month while small to medium-sized businesses can get the increased speeds for $199.95 a month.

Some operators are apparently planning on deployment in 2009.

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In our very first post, we promised to bring you guest commentary. I’m pleased to present our first contributor: David Broberg, Vice President of Consumer Video Technology for CableLabs.

“Honey (or Dad) will you fix the network again?” That’s the kind of greeting I’ve been getting far too frequently when I come home from work lately. Have you heard that one yet? Clouds are often used graphically to represent the network connections and it seems my personal cloud (home network) has been suffering some growing pains lately. This growth has required far more attention from the local IT-guy (me).

A few months ago, I attended CES in Las Vegas and this was one of the greetings waiting for me when I returned home from my travels. At the show I saw dozens of new products that will connect to your home network and it frightens me to think these problems are likely to get worse before they get better. I recently took an inventory of the number of IP devices on my personal home network and here is what I found: Up to 8 PCs at any given time; two webcams, two NAS drives, two IP printers, one Xbox360, one DVR, two Nintendo DS units, one Windows Mobile Phone with WiFi access and a Chumby! All of these asking my router for an IP address - that’s 20 devices!

I traced what seemed to be most of the problems to the fact that most of these devices were using dynamic IP assignments and a few were fixed IP addresses; many with the dynamic-IP assignments would store their IP address when they were in power-saving mode, yet act as if they were disconnected from the network. If the router got rebooted for any reason while any of those devices was asleep, the device that just woke up would most likely find an IP address conflict because another device was now assigned to its original IP address. Another reboot of the router only pushed the problem down to the next device that was temporarily off-line. As a fix, I went around the house and reassigned fixed IP addresses to all 20 devices – so far this strategy seems to be helping but it wasn’t easy. Perhaps there is another way to avoid this problem, but that’s not really the point.

One of the trends from this year’s CES was for more and more consumer IP devices for your home. Soon, many of the flat panel TVs and STBs are likely to have IP connections, BluRay players with network enhanced features are coming too. Many mobile phones already connect to WiFi, soon this may be a standard feature on all cell phones. The sales of Xbox360s and PS3s are skyrocketing – they need a network too. There are more IP-connected devices coming including robots, music players, Internet radios, media center extenders, cameras, picture frames, flash-memory, lights, thermostats, sprinkler timers, beds – a few years ago there was an Internet-capable refrigerator and I’ve even got an Internet-connected wristwatch (thankfully it doesn’t need its own IP address since it goes through the PC connection.) If you like gadgets like I do, your home will become its own cloud over the next few years.

To make matters worse, another trend at CES was for far more fragmentation in this home networking market, not more uniformity. My house was prewired with structured wiring and has Ethernet available (at one socket) in every room. I’ve added two WiFi access points at opposite corners of the house (one up, one down) to provide good wireless coverage with 802.11b/g and I also added an original HomePlug powerline modem to connect the IP webcam in the garden shed. That accounts for three separate physical layers (one wired, one powerline and one wireless) and more are coming.

On the wireless forefront, many routers are moving to 802.11n or “pre-N” since the standards aren’t quite finalized. It promises faster rates and better coverage, but with all the “pre-standardized” units, interoperability is in question. There were also product introductions for portable TV based on WiMax technology from Motorola and something called a femto cell providing CDMA access inside your home from Samsung. For shorter ranges (3M), there are high speed and low speed choices including the new 480 Mbps wireless USB standard and the popular Bluetooth technology (3 Mbps) which just released version-2.1+EDR. Wireless mesh networks are also growing in popularity and innovation, with competing solutions from ZigBee Alliance and Z-Wave Alliance, both are low-speed technologies aimed primarily at home control and automation.

Networks connected through power-lines also saw innovation and chaos at this year’s CES. There were at least two updated competing power-line networking technologies that offer faster speeds capable of sending HD video with better noise immunity and more reliability. One was from Panasonic called HD-PLC (190 Mbps) the other system is called HomePlug AV (200 Mbps). Some of these technologies are being built into flat-panel DTVs to eliminate the need for the unsightly video/audio cables.

The third physical layer in the home is the coax network. This is usually what is used to connect the TVs in your house. Recently a number of companies have introduced technology to use this cabling for home networking connections too. It offers many advantages because of its shielding and design for high frequencies. There were many innovations described at CES this year including demonstrations of HDMI over coax, 1394 over coax, Ethernet over coax, one that combines 1394 and GigE over coax and a popular system called MoCa which is now introducing components that support the latest version 1.1.

There are other groups working to standardize the home network connections too. CableLabs has published home networking extensions to the OpenCable Host & OCAP specifications and has approved content protection systems for IP-based home network connectivity. The 1394 trade association was demonstrating technologies and devices that can bridge 1394 protocols to coax, fiber and other new physical layers. The Hana Alliance was demonstrating whole-home high-definition video networking solutions also based on 1394 technology at CES and released their Hana 2.0 design guidelines. Meanwhile CEA’s own R7 Home Network Committee maintains a variety of home networking standards as well as active projects to define future remote user interface protocols.

A recent market study from MultiMedia Intelligence reported that shipments of Internet-Protocol (IP)-enabled consumer electronic products reached 64 Million units in 2007. They say this represents a nearly 73% growth. They also report that semiconductor revenues from technology that enables these interfaces will exceed $2 Billion by 2012. Clearly we are just at the beginning of a growth of home networking technology as this trend extends to more and more homes. This growth will impact some homes earlier than others. Those with pre-teens or young teens at home now, are likely to see the most significant growth over the next 5 years. Others will be impacted more gradually. If you still haven’t been asked to fix the network yet, you soon will be.

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We created this blog to tell cable’s story. The cable industry has spent $130 billion on our network since the 1996 Telecommunications Act was passed. That investment of private capital has spurred fundamental change in how we work, play, communicate, and entertain ourselves.

Today a friend sent a link to a video that illustrates that point beautifully. It’s a spoof of the Fox series 24. Allegedly the ‘long lost’ original pilot made in 1994, the video clearly shows the changes in technology we’ve seen over the period of time that we were building our network. Take a look.

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NCTA President & CEO Kyle McSlarrow testified today at the Senate Committee on Energy and Commerce hearing “The Future of the Internet.” You can hear an MP3 of his delivered remarks and, earlier today, we featured a post that summarized his remarks.

 

 Standard Podcast: Play Now | Play in Popup | Download

I particularly note his remarks at 2:22, when he said:

Every single person here has a blog or a website or has content that has distribution and has enabled consumers, millions of them around this country, to [access] that content and no one is blocking it… We want as much content, we want as many applications to succeed as possible. That’s what makes our broadband service attractive to consumers. And if we ever engaged in conduct that consumers were outraged about, they do have a choice. They can go somewhere else.

He said that while we can have a discussion on what is the most appropriate method of network management, “…there is zero evidence that any operator is engaging in anticompetitive conduct.”

However, despite the paucity of evidence of such behavior, Professor Lawrence Lessig, a big proponent of net neutrality, said that some might argue that we should wait until we see discrimination before we do something about it - which strikes me as a sensible approach to legislation - but that hi-tech investments are made today based on what investors think the network will look like in the future. He says there is such extraordinary uncertainty about what the future holds that it threatens innovation. Threats about what might happen without net neutrality have been around for five years, back to Columbia Law Professor Tim Wu’s 2003 paper Network Neutrality, Broadband Discrimination. I wouldn’t say that investors are shying away from promising broadband applications.

There was also a great deal of talk about what one person referred to as the United States’ “precipitous freefall” in terms of our global broadband ranking. I refer you back to our series on the problems with the OECD rankings, especially this post: The Truth About Japanese Broadband.

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The cable industry has consistently demonstrated its commitment to policies that ensure all Americans have access to affordable broadband. This includes:

• Proposals to create a fund tailored to expanding broadband into unserved areas.
• The Broadband Data Improvement Act which would improve federal data collection regarding where broadband services have been deployed in the United States to achieve the goal of ubiquitous broadband availability for all Americans.
• Tax credits or other tax incentives to providers that build out in rural areas that are unserved by an existing broadband provider.
• Reform of the RUS broadband loan program so that funding is targeted specifically to unserved areas.
• Expansion of the FCC’s Lifeline and Link-Up Programs to help ensure that broadband access is extended to low-income households.
• Public-private partnerships to provide broadband in unserved areas.

We recognize that the government can play an important role in making certain that the economic and social benefits of broadband connectivity are extended to all areas of this country. While broadband deployment to every community in America merits the full attention of policymakers, legislation calling for “network neutrality” or government intervention into the operation of networks would undermine the goals of broadband deployment and adoption.

The government’s consistent light regulatory touch since the introduction of broadband has worked. Only that continued regulatory freedom is likely to spur the investment and innovation that consumers have come to expect.

The cable industry is on the verge of making the leap — from “broadband” to “wideband” — with a technology which can enable dramatically higher download and upload speeds. Several weeks ago, for example, Comcast launched a “wideband” service in Minneapolis-St. Paul that offers speeds of 50 Megabits per second. Comcast expects to have wideband available to 20% of its systems by year-end 2008 and to all homes passed by mid 2010.

The efforts of broadband network providers to build larger and faster networks have helped ensure the success of countless numbers of new Internet businesses and applications. Despite concerns about alleged limited access to broadband, use of Internet video on demand has grown at the most dramatic rate. In February 2008, nearly 135 million U.S. Internet users spent an average of 204 minutes viewing 10.1 billion online videos. YouTube represented 34% of those online videos, or nearly 3.5 billion.

For years, net neutrality proponents have argued that without government intervention, broadband providers would stifle competing services and content providers; Internet development and usage would stagnate; and consumers would be unable to use their broadband connections to download video or access other emerging applications. In fact, cable’s investment in broadband has driven innovation and investment in new content and applications at the edge — the exact opposite of what was predicted by advocates of net regulation.

Read the rest of this entry »

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