There’s no denying that the Digital Television Transition is a complicated issue. Even those of us who work on it all the time sometimes have difficulty keeping all of the technical details straight. Some people seem confused over whether a box is always necessary to keep watching TV.

Here’s one example. Earlier this week, on a Public Radio program dealing with current technology issues, that subject of the coming DTV transition was discussed:

Host: How do I make sure that my TV doesn’t go blank on February 17?

Guest: What you have to do is look at how TV gets to your TV. If you subscribe to satellite or you subscribe to cable, and in either case you have a box, some kind of tuner or digital video recorder connected to your TV, you don’t have to do anything. Any digital conversion that is necessary is done in that box. At worst, your cable or satellite company will ship you a new box at some point. The tricky issue is people who either…

Host: Have cable without a box.

Guest: Yes. They have a cable ready TV and they just subscribe to basic or expanded basic so that they’re used to the joy of watching TV with only remote control on the coffee table. They may need to get a box where they didn’t have one before because the cable companies - and this is actually separate from the digital transition in a certain sense - they only have to keep providing a very basic set of channels in an unencrypted analog form that you can get with your cable ready TV.

Here’s another example: In the latest edition of the Bose newsletter, there’s the same error. It says that you’ll need to do nothing for the transition if “You subscribe to digital cable TV.” Further down, it states that it is a “Myth” that cable subscribers are ready for the changeover, suggesting that cable subscribers who receive analog service will be left out.

The source of the confusion seems to be that two topics are combined. It’s important to remember that this DTV Transition is only for the over-the-air broadcast industry. Cable is going through its own “digital transition.” Because of that word “digital,” the two often get confused.

What will cable subscribers need to do in preparation for the DTV Transition next February? The current information is that cable customers - whether or not they have a set-top box - will still be able to watch television after Feb. 17, 2009. At the same time, the cable industry has been moving towards a digital platform; as part of that, sometimes operators will move channels from the analog tier to the digital tier, which then needs a digital set-top box for reception.

Bottom line: If you have cable service, you should be fine, with the set-top box as an irrelevant factor. However, if you want to get access to cable’s newer services, such as hi-def TV or digital video recorders, or if you want to see the hundreds of programming choices available through the digital cable platform, you’ll need to have the appropriate set-top box. You can avoid having a box by purchasing a Digital Cable Ready television, but the current sets are only one-way, which means you won’t have access to interactive services. However, the tru2way standard will address this issue.

As always, you can visit the Get Ready for Digital TV site for more information (también en Español).

You’ve heard about those DTV converter boxes that you can get a coupon for. News today that the Consumer Electronics Association (CEA) has partnered with the National Association of Broadcasters (NAB) on an upgrade of the nine-year-old site AntennaWeb.org, “an online antenna mapping program designed to help users determine the proper outdoor antenna to use in order to receive free local broadcast channels.”

In other news, the DTV Transition Coalition, of which NCTA is a founding member, put out a media release on Friday pointing out their tremendous growth in membership. It’s a long and varied list that includes “consumer groups, broadcast, cable and consumer electronics companies, retailers, civil rights and grassroots organizations, trade associations, and state and local government organizations.”

NCTA today filed comments at the FCC in the “Broadband Industry Practices” proceeding in opposition to two petitions (from Free Press and Vuze) requesting that the Commission enact new regulation that would restrict the ability of broadband service providers to manage their networks to provide a better customer experience.

To quote from NCTA’s media release:

With the FCC’s 2005 adoption of a Policy Statement concerning broadband service, NCTA said that the Commission has already taken the correct approach – one of vigilant restraint – to ensure that the rapidly changing marketplace for broadband services develops in a way that best meets the needs of consumers. Importantly, the Commission’s 2005 Policy Statement expressly recognized that its broadband principles were “subject to reasonable network management,” NCTA said.

These seem to be the two key phrases: vigilant restraint and reasonable network management. In other words, broadband Internet services have evolved over time, responding to marketplace needs, and for the FCC to impose regulations would be, as the filing says, “likely to do more harm than good.” Further, network management “makes it possible to offer consumers access to the broadest possible array of services, sites and applications.”

The issue of network management has arisen with the growth of peer-to-peer services which are designed not only to download large files for long periods of time but also make their computers available as servers that constantly upload files for use by others. The use of peer-to-peer services by only a small fraction of Internet customers can consume a very large portion of the network’s resources and capacity which can interfere with the use and enjoyment of the Internet by other customers. So, without reasonable network management techniques, heavy usage of peer-to-peer services can degrade the overall speed of Internet access for all customers.

The filing enumerates some of the key points behind this approach:

• Not all applications use bandwidth in the same way.
• Content agnostic management of a network is not “censorship” or an anticompetitive technique to harm other services.
• Approaches to managing networks are best decided by network providers, rather than by the government.

This discussion reminds me of a point made in a Washington Post editorial almost two years ago:

If you want innovation on the Internet, you need better pipes: ones that are faster, less susceptible to hackers and spammers, or smarter in ways that nobody has yet thought of. The lack of incentives for pipe innovation is more pressing than the lack of incentives to create new Web services.

Today’s filing concludes by pointing out that there are a number of open questions about the best way to improve consumers’ experience of the Internet. Regulation would only put up a roadblock on the path to figuring out the right approaches.

We’re coming up pretty quickly on the official start to the One Year Countdown to the Digital Television Transition.

On the off-chance that the preceding sentence was complete gibberish to you, let me step back and explain. The DTV Transition refers to the coming switch from analog to digital over-the-air broadcast television. Congress has mandated that after February 17, 2009, full power television stations will stop broadcasting in analog, and will broadcast in digital exclusively. Changing over to a digital format will create efficiencies in the use of the radio frequency spectrum on which the nation’s TV broadcasters transmit their signals. Some of the old spectrum that’s freed up will be made available to first-responders such as local police and fire departments and will enhance the way they react to emergencies, which will significantly increase public safety for all Americans.

That phrase “full power broadcast TV stations,” however, is a really important distinction, as the FCC’s website points out:

While the majority of consumers in the U.S. can receive the programming of full-power over-the-air stations, there are three other categories of broadcast TV stations - “low-power,” “Class A,” and “translator” stations. There is currently no statutory deadline for these stations to convert to digital broadcasting.

That page defines what these stations are, but it’s useful to remember that not every station broadcasting in America is going to be transitioning next year.

But there is a solution: analog pass-through in digital-to-analog converter boxes. You’ve possibly heard that you can buy a converter box that will let your old analog TV sets receive and display over-the-air digital signals. There are some of these boxes that will also “pass-through” an analog signal, in addition to performing the conversion for the digital ones.

The National Telecommunications and Information Administration (NTIA) has a list of converter boxes that are eligible for their coupon program, which allows consumers to apply to receive up to two vouchers that offer a significant discount off the price of the converters. That list clearly marks the models that are “capable of passing through an analog signal to the TV set.” Right now, there are three such boxes, but it is expected that additional models will be available in the future.

For more info on the DTV Transition, you can visit the cable industry’s website GetReadyForDigitalTV.com or the NTIA’s website on this topic. If you’re a cable customer, the good news is that for any of your TVs hooked up to cable, you shouldn’t have to do anything to continue enjoying full power broadcast TV stations in their new digital format, whether you have a hi-def television or not.

This series examining the OECD broadband rankings has focused so far on methodology problems with the numbers.  But even despite the study’s flaws, there is a need to discuss the current state of broadband adoption and ways it can be increased.

Ensuring every American has access to broadband is a shared goal of industry and government.  Indeed, with the sheer volume of information available online, it is important for Americans to have access to this resource if they want it.

Statistics aside, everyone should have access to broadband

The Internet has dramatically changed the way we communicate and access news, entertainment, and information.  People who use the Internet every day for work or leisure may look fondly at days before we were so connected but never want to give up their access to this valuable medium.

The OECD stats, unfortunately, give people a reason not to explore some of the root issues related to broadband adoption (adoption, not deployment).  These rankings tempt people to focus on the state of availability rather than asking why consumers aren’t connecting to services that are already available.

However, like most consumer products and services, there are those who will simply resist the trend.  A Parks Associates study last year found that 29% of all U.S. households do not have any form of Internet access and do not intend to subscribe over the next 12 months.   That wasn’t really news, but the reasons cited were:

• 44% said they were not interested in anything on the Internet
• 17% were not sure how to use the Internet
• 14% stated that they have Internet access at work

Only 14% of this disinterested group cited cost of a computer as the reason and another 8% cited cost of HSI service.  Only 3% of the respondents claimed that HSI service was not available to their home.

Further, a Pew Internet & American Life Project  study estimates that approximately 15% of U.S. households still rely on dial-up service and nearly 60% of these dial-up users said they are not interested in switching to broadband.

Cable Internet service passes 92% of U.S. homes.  Throw in broadband via satellite and you’re nearing 100%.  Look at the Parks study again and consider that first number — 44% of offline Americans believe the Internet offers nothing of interest to them.  The Pew Study draws its own conclusions about the difficulty of growing this number.

Non-internet users do not have very positive attitudes about information technology.  Many report worries about information overload and few link information technology to greater control over their lives… Given that these non-users are people with worries about information technology and not a lot of extra disposable income, luring them online won’t be an easy task.

Another aspect that is largely ignored in this discussion is the simple truth that some consumers simply choose not to use the Internet.  There are still people in the US who have no phone service, and there are an estimated 13-20 million US households that rely solely on over-the-air broadcast TV.  As hard as this is for those who are connected to accept, there are simply a lot of people unconcerned with the consumption of mass media and telecommunications technology.

Nobody should be left behind

Disinterest in the Internet aside, however, these services should be readily available to anyone who wants access to them.  Connected Nation, a non-profit organization committed to increasing broadband adoption, is working to ensure both availability (by identifying and mapping areas that are unserved) and demand (by dispelling the idea that “nothing interesting is on the Internet”).

Connected Nation is supported by a growing number of states and major players in the telecommunications space and is trying to improve broadband access to unserved areas and get people connected.

The real state of broadband deployment

Using studies to misrepresent the current state of broadband availability and clamor for the government to either mandate deployment or simply jump into the broadband business is misguided.  As Pew noted:

With home broadband penetration poised to surpass 50% this year [Note: By our estimation it is now slightly greater than 50%], it will have taken 9 years from the time the service became widely available for residential high-speed service to reach half the population. To put this in context, it took 10 years for the compact disc player to reach 50% of consumers, 15 years for cell phones, and 18 years for color TV. Each of those technologies, like broadband, represented an upgrade from a good or service with which most consumers had experience.

Citizens in the US are adopting broadband at a rate almost unmatched in the history of technology.  Anyone who wants to get connected should be able to do so.

Connected Nation is working with states and Congress to gather data on broadband availability, so government resources can be focused on areas where citizens have no access at all.  Cable is working with them to achieve that goal.

We should not, however, rush to the government to insert itself in the marketplace when the metrics used to make the argument are questionable and the market is already growing at a fast pace. 

CTAM, the marketing association for the cable industry, released a study this week that looked at different consumer segments (particularly ones that are influential in the spread of hi-tech), their technology adoption, the decision-making process, and content viewing behavior.

The study drilled in on two influential groups – future shapers and future makers, who collectively represent 30% of consumers. Most people these days have heard of early adopters, a term created by Geoffrey A. Moore in his book Crossing the Chasm, which discussed the gap that exists between those consumers who will adopt new tech products and services early in their lifecycle and the “early majority” users, who are pragmatists and will wait longer.

A Light Reading article on the study explains their significance:

…future shapers (10 percent) are the early adopters of technology who readily spread the word and whose opinions are sought out. Future makers (20 percent) are second stage adopters who will tout the benefits of new technologies. The largest group of consumers is classified as today consumers (40 percent) who wait until technologies are proven before adopting them.

(For more on the significance of influencers, see Malcolm Gladwell’s classic The Tipping Point.)

The CTAM study, Future Shapers and Makers: An Examination of Consumer Segments, conducted by TNS Media & Entertainment, found:

Almost half of today’s technology influencers are choosing television service provided by their cable company over a satellite or telephone company provider. Forty-six percent of technology’s earliest adopters choose cable, while 26 percent chose satellite and 2 percent chose to receive video services from their telephone service provider.

From the article in Multichannel News:

Doing their homework is what sets the future shapers and future makers apart. According to the survey, 67% of future shapers and 59% of future makers are likely to get information about TV services from the Internet, compared to 45% of today’s consumers. The two influencer groups are also more likely than others to obtain information from TV, newspapers, and magazines.

According to the survey, 89% of consumers are concerned primarily with the reliability of the provider, over price

In addition, the study examined the trend in watching video on alternative platforms, such as laptops, portable DVD players or devices like iPods or iPhones. The study found that 37% choose a desktop computer or laptop as their preferred method. You won’t be surprised to learn that younger consumers are most likely to watch programming online, coming in over 50% greater in their tendency to watch video on desktop computers or laptops.

UPDATE: Along these lines, it’s probably worth pointing out another study that came out this week.

In a study conducted by Canadian research firm Solutions Research Group, nearly 80 million Americans, or 43% of the online population, watched a TV show on the Internet, as of November, up from 25% a year ago.

You can read the press release on the Digital Life America study here.

This week, we’re taking a look at flaws in the OECD broadband study and the problems with relying on it to justify broadband policy changes.  One of the oft cited examples of countries doing broadband “right” is Japan.  Ironically, Japan usually resides just below, or just above, the U.S. in the OECD rankings (in the latest rankings, they’re just below us).  Yet Japan still commands outsized adoration.

However, a closer look reveals that the nirvana of Japanese broadband has been greatly exaggerated.

The Miracle of Japanese Broadband

If Japan has been held up as the shining example of low-cost, high-speed connections available to all, how could they slip behind the US?

The short answer is they never were the beacon of broadband they were held out to be.  While the maximum speed available to “some” in Japan is 100 Mbps, the fact is that, in most cases, that is a theoretical top speed.  The problem is these studies often use “advertised speeds” rather than actual speeds.  Advertised speeds sometimes do not meet the promise.  Most Japanese FTTH providers also include caveats that such a speed is not guaranteed and will, in fact, be lower during times of congestion.

In reality, roughly half of Japanese broadband connections are carried over DSL at speeds nowhere near 100 Mbps.

Surely, though, even with the speed being less than claimed, the fact that it’s so much cheaper makes it okay, right?  Well, not exactly.  The dirty little secret that goes unspoken in discussions of Japan’s low-cost ISPs is the fact that you have to subscribe to two different services to get an equivalent product to that offered in the US.  For example, not only would you subscribe for the network connection (essentially the equivalent of getting the physical line), but you also have to subscribe to an ISP (the network in Japan is divorced from the content).

For access to a 100 megabit connection and Yahoo! ISP service, you’ll be forking out between $55 and $60.  You may reach peak speeds at 2 a.m. when nobody is surfing, but the cost is not significantly different as a monthly outlay.  While some studies look at this calculation as the cost per 100,000 bits per second per month, it’s hard to actually quantify that if your speed is not guaranteed (or even static).

Looking at the OECD stats, we’ve already uncovered problems with the definition of subscription and the mathematical issues that result from their unit of measurement.  When other parties disseminate faulty and misleading information about cost and speed metrics, one realizes that most of the discussions about global broadband are largely anecdotal and not at all scientific.

As we have said throughout this series, there is a conversation to be had about ways to encourage broadband adoption.  That conversation, however, should be driven by facts, not anecdotal evidence and faulty math.

In our next installment, we’ll look at the challenges the U.S. faces getting people online.

This week, we’re taking a close look at the issues with the OECD broadband rankings that are often cited when the state of broadband availability in the U.S. is discussed.  We started with a look at the problems and inconsistencies with what OECD does and does not consider a subscription – a flaw that excludes millions of US citizens from being counted.

Today, we’re looking at a the basic unit of measurement in their study – subscriptions per 100 inhabitants.  To understand this issue, you have to begin with a simple question.

What happens when everyone reaches 100%?

All metrics should be equal.  No matter how you count it, when every nation reaches 100% broadband adoption, we’re all tied for first, right?  Actually, no.  This is an odd little side effect of the OECD’s reliance on “subscriptions per 100 inhabitants”.

If every country achieved 100% broadband access, there would still be clear winners and losers.  The OECD rankings would still produce disparate rankings because of the impact of calculating results this way.  In fact, a Phoenix Center study examined this specific problem.  By applying the ranking methodology to what it calls “Broadband Nirvana”, the study found that the United States would actually rank 20th - 5 places lower than where we are today - if every household and every business in every country had a connection.

By measuring total (primarily household) subscriptions per units of 100 inhabitants, the OECD fails to account for disparities in average household sizes throughout the world.  Those countries with fewer average residents per household (many of the northern European countries at the top of the OECD listing) will rank higher in the OECD statistics, yet the irony is that there are fewer residents in each of these homes who are able to take advantage of the HSI service.

Think of it this way.  If average household size is Denmark is 2.1 people, and you measure subscriptions per 100 inhabitants, you would have 48 subscriptions per 100 inhabitants.  One hundred subscriptions would cover 210 people.  In the US average household size is roughly 2.6 persons per household.  100 subscriptions cover 260 people.  However, based on the OECD methodology, you have only 38 subscriptions per 100 people.  The US ranking is much lower despite having roughly 20% more people with access. 

Because of that skew, the US, with more people accessing broadband through the same number of subscriptions, actually fares worse in the OECD outcome.  It’s a serious flaw.

That’s not to say that a serious discussion about ways to increase broadband adoption shouldn’t take place.  Tomorrow, we’ll take a look at Japanese broadband. Our final installment in this series will focus on some of the reasons people don’t adopt broadband and efforts to change that.

It seems hardly a week goes by without somebody sounding the alarm bell on the “crisis” in US broadband deployment. While we all share the common goal of bringing affordable broadband service to all Americans, it’s unfortunate that the most frequently cited source of broadband deployment – the semi-annual Organization for Economic Cooperation and Development (OECD) numbers – contains a variety of inaccuracies.

So, to help set the record straight, this week we thought we would take a look at the OECD broadband study and the real state of broadband today.  In our first two installments, we’ll examine flaws in several units of measurement utilized in the OECD study.  We’ll then move on to fact check the “miracle” of Japanese Broadband and finish by analyzing why consumers aren’t connecting to services that are already available.  

It depends on what your definition of a subscription is.

The most significant flaw in OECD’s methodology is their measurement unit of subscriptions per 100 inhabitants.  Average household size plays havoc with the “inhabitants” calculation, creating some serious unintended consequences.  We’ll cover that in tomorrow’s post.

Equally problematic, however, is what they do and do not consider to be a subscription.  In OECD’s definition of what constitutes a “broadband subscription,” there is no distinction drawn between business DSL or cable lines and residential DSL or cable lines, but there is a specific exclusion of direct fiber and T1 lines for businesses.  As a result, some businesses are counted and others are not.

OECD’s data fails to capture the tens of millions of U.S. workers that access the Internet via these special access connections.

The OECD measure also fails to count the approximately 16 million college students in the U.S., most of whom have access to both wired and wireless High-Speed Internet (HSI) service.   Also uncounted are the HSI users that access WiFi connections, and the growing number of mobile wireless and “Hot Spot” customers.

Undercounting these populations negatively impacts the US ranking, but counting them would be problematic as well.  Because so many people have broadband access at home, at work, via their mobile device, at college, or through some other connection, the risk of double or triple counting becomes fairly great.

Some have suggested that a better metric would be to simply measure the number of residential households that are subscribed.  The distinction is really very stark.  For instance, in the US, roughly 57 million households subscribe to cable, DSL, fiber, satellite, or fixed wireless service.  Using a measurement of how many “residences” have access would more accurately reflect the real state of residential broadband consumption, and would vault the U.S. ahead of 9 European countries which were ranked higher in terms of household penetration in the OECD rankings of December 2006.  (Note: Household data is not available for Korea, Canada, and Australia, so it’s unclear where they would rank).