Since this has been a busy week, it seemed like a good time to provide an update on the broadband stimulus implementation process. I’ll refer you back to this earlier video from NCTA President & CEO Kyle McSlarrow and our White Paper; we think a strong broadband infrastructure is a good thing and we think the use of grants to promote broadband is a good thing, but we also think the funds ought to be used efficiently and we think the process ought to be fair & transparent.

On Monday, James Assey, Executive Vice President of NCTA, participated in a Roundtable on Nondiscrimination and Interconnection Obligations.

As part of the stimulus package, funding was included to “establish a Broadband Technology Opportunities Program for awards to eligible entities to develop and expand broadband services to rural and underserved areas and improve access to broadband by public safety agencies.” NTIA and RUS, the agencies that are implementing BTOP, are holding a series of public meetings, and Monday’s event was part of this. In broad terms, “Nondiscrimination and Interconnection Obligations” refers to how networks interact with each other and exchange traffic.

That’s a whole lot of background to set-up the statement that Assey delivered, which can be accessed on our website, along with a summary.

On Tuesday, NCTA Associate General Counsel Steve Morris spoke on a panel at another public meeting. Andrew Feinberg at BroadbandCensus.com provided coverage:

The statutory guidelines provide a good start in determining standards, said Morris. Morris invoked President Obama’s call for a transparent process, and said it be governed by a merit-based system of seven objective measurements to be shared between NTIA and RUS.

Job creation and preservation should be first and foremost among the selection criteria, Morris said. Preference should also be given to those applicants that can complete build-out within the statutory time periods, and that are able to maintain projects afterwards.

Infrastructure should be built out first the “last mile,” Morris said. And programs that target schools, libraries, and other “public interest” institutions should be ranked ahead of those that don’t, he added. Further considerations could be cost per capita and relative expense compared to other forms of communication, he said.

On Wednesday, NCTA responded to a Request for Comments on the FCC Report On Rural Broadband Strategy; those comments can also be found on our website. Essentially, we called for complete interagency communication and coordination; transparency; a set of coherent and clearly defined goals; an update of the FCC’s universal service and pole attachment policies; and an initial focus on extending broadband facilities to unserved areas and underserved populations.

Also this week, Representatives Joe Barton [R, TX-6] and Cliff Stern [R, FL-6] sent a letter to NTIA, RUS and the FCC about the broadband stimulus funds. You should read the letter, but some of the key points are:

• Stimulus funds should go where broadband mapping has been completed
• Funding should go to the unserved over the underserved
• We should stimulate demand rather than supply
• These efforts should be technologically & competitively neutral
• We should fund economically efficient projects

Today, we started trucking equipment over to the Washington Convention Center here in D.C. A crew will start setting up our Broadband Nation exhibit over the weekend (see this previous post).

Broadband Nation is our 20,000-square-foot interactive exhibit at The Cable Show.  This exhibit will demonstrate the many ways in which broadband technology has changed the way Americans live, work and play.  It’s a hands-on opportunity to experience a wide variety of innovative new technology products and services available both now and possibly in the future for the home, school, and office, as well as specialized applications for medical centers, schools, and retail and entertainment outlets, among others. Broadband Nation seeks to capture in tangible ways how broadband has, and will, alter the everyday life of Americans; the exhibit will provide a good rationale for the broadband stimulus funding.

Next week, there will also be a couple sessions at The Cable Show that will focus on this issue.

• Wednesday, April 01, from 3:00 – 4:15 p.m., the session “21st Century Communications Policy: The Role of the States” will feature a conversation with State Public Utility Commissioners examining (like it says in the title) the states’ role in this process.
• Friday, April 03, from 11:00 a.m. – 12:15 p.m., the session “If We Build It, Will They Log On: Barriers to Broadband Adoption and Use” will look at how to drive adoption of broadband applications within the medical, education, safety and environmental/energy sectors.

I hope you are following the very vibrant debate that’s been taking place over the last week, involving  Boxee CEO Avner Ronen, Chairman of HDNet Mark Cuban and a host of other people about the relationship between free online video and the programming available from multichannel video distributers, such as cable, satellite and phone companies.

It all started with this Contentinople article, quoting Ronen: “Cable companies have been fighting cable à la carte for years in Washington, but I think consumers will prevail online.”  Then Cuban responded on his blog: Why Do Internet People Think Content People Are Stupid ? He argued that it doesn’t make sense to disrupt cable’s current business model.  He then followed up by noting the impact if the “a la carte” model was applied to Internet content.

Then the whole discussion took off. Here are just a few of the relevant links:

• Cable TV is Screwd [Post from Revision3 CEO Jim Louderback, formerly of the cable network TechTV]
• a lively debate with mark cuban [Avner Ronen responds on Boxee's blog]
• Some Questions & Thoughts re Internet Video vs the Incumbents [Cuban follows up with another post]
• Mark Cuban debates Boxee founder [Blog post from Michael Willner]
• Mark Cuban Declares War On Free TV Online… But Misses Out On The Economics [Mike Masnick at TechDirt argues that charging for online content is "a dead-end model"]
• The Cuban Files: Taking On Boxee & Business Models [To close the circle, Contentinople's  R. Scott Raynovich weighs in]

One notices some common themes of those arguing that cable programming ought to be available online either free or in an a la carte fashion.  There’s a general theme that all content must inevitable be available on the Internet in this fashion. Typically, what consumers want is held up as the Golden Rule. I’m no expert, but I don’t think that Masnick’s economic analysis makes too much sense.

Anyway, take a look for yourself.

This week, Comcast and Sony opened up a joint retail presence in Philly: Sony Style Comcast Labs. Quite a mouthful, but the name reflects its intention, as both retail store and technology lab, to serve as a place for consumers learn about emerging technologies and check out the latest digital devices.

Much of it is the kind of thing we write about on this blog all the time, such as wideband Internet access based on the DOCSIS 3.0 standard and tru2way sets that don’t require a set-top box. Plus, the media release mentions an “enhanced cordless telephone… with email, IM, text and Yellow Pages.”

You can read coverage of the launch here, here and here. Also, I thought I’d throw a couple photos down below. And Sony Electronics has some more shots on Flickr.

Stories about “cord cutting” seem to be all the rage right now, but many of them are overlooking some pretty basic – and readily available facts – which suggest that consumers may enjoy online video but they certainly aren’t ditching their set-top boxes by the truckload (just the opposite).

But, before getting into some of the basic facts which show that cord cutting really isn’t happening – at least not how it is being described in many stories – it would be foolish not to acknowledge that more broadband users (including me) are looking at more and more video online, and that is one trend that will continue.  As a cycling enthusiast, I’m even considering a subscription to www.cycling.tv.  But will my desire to watch a few cycling races or other videos online replace the diverse cable package that my family enjoys?  Not a chance.

And that’s because most of the content online doesn’t match my viewing preferences (and the vast majority isn’t age appropriate for my kids) and the experience is marginal at best when compared to the HDTV in my family room.  And even though I work in the cable industry, I don’t think my personal experience is different than many others.

Our blog has touched on the cord cutting topic before (see here, here, and here) but recent data and the ongoing media coverage make it worth revisiting.

First, keep in mind that cable is the nation’s largest broadband provider so the more consumers that need a higher speed Internet connection to watch video online, cable is probably your best option.

But when examining if cord cutting is truly happening, I would recommend reading a recent Daisy Whitney column in TV Week with a headline that says it all, “Where Are Cord-Cutters? Signing Up for Cable, Satellite.”  The takeaway – in the 4^th Quarter of 2008, video subscribers increased by 441,000. And for all of 2008, Sanford Bernstein analyst Craig Moffett reports that video subscribers rose by 1.3 million subscriptions, and he says, “cord cutting remains the province of urban myth.”

When it comes to TV viewing, Nielsen’s Three Screen Report also demonstrates that consumers are watching more video than ever, now up to 151 hours per month on TV alone.  Viewing of online and mobile video is also growing, but it’s only up to 3 hours per month online and 4 hours per month on mobile phones and other devices:

Viewers appear to be choosing the ‘best screen available’ for their video consumption, weighing a variety of factors, including the quality of the screen experience, convenience, availability of the video, and the ability to watch according to the consumers’ schedule. In the majority of cases, consumers choose to view video through the traditional means – live viewing of television in the home.

So, the data looks pretty clear yet we keep seeing headlines about Internet TV becoming the new mass medium.  I guess the point here is to use caution (and facts) before coining the next trend.

Yesterday, NCTA released a new White Paper entitled “Moving the Needle on Broadband: Stimulus Strategies to Spur Adoption and Extend Access Across America,” which we think will provide some helpful perspective on the issue of implementing broadband stimulus funding.

It’s a pretty commonly accepted view today that a strong broadband infrastructure is positive for America, since broadband can be a key driver of the economy; the use of grants from the stimulus that are used to promote the use of broadband can effectively stimulate both short-term and longer-term economic growth. It’s one of the reasons we’re staging the Broadband Nation exhibit at our coming convention, because it will provide graphic evidence of broadband’s impact in the community.

So how do we go about reaching these goals, or at least move the needle in the right direction?

It’s useful to point out that cable has played an important role in all that we have achieved so far. About 92% of U.S. homes are passed by High-Speed Internet service from cable operators. Our industry has invested $146.8 billion in infrastructure upgrades since 1996; cable will be investing about $14 billion this year alone. This is all infrastructure built with private capital, not government funding.

But there is about $7 billion available in the stimulus package, and every little bit can be helpful. But the question to be asked is, “How can those funds be used most effectively?” Our White Paper lays out our views on this question.

NCTA asserts that the broadband grant and loan programs in the American Recovery and Reinvestment Act (ARRA) should be implemented with the following basic principles:

• Funds should be used to increase broadband adoption and use;
• Awards should be competitively and technologically neutral so as not to create disincentives to private investment that necessarily will continue to take the lead in broadband deployment;
• Value-producing projects that can be implemented quickly should receive the highest priority; and,
• Implementation should be transparent and coordinated with other agencies providing similar aid.

We also say that funding should be deployed in a manner that adheres to the principle of “First, do no harm” to the existing broadband industry, which has already made the investments described above. The foremost priorities in awarding competitive grants, in descending order, should be:

1. Extending broadband facilities to unserved areas.
2. Supporting programs that enable underserved populations to acquire and to make effective use of broadband service where it is already available.
3. If funds remain, extending broadband facilities to underserved areas defined in terms of below-standard speed and other qualitative measures relative to today’s current-generation broadband services.

You should take a look at the whole document, which is available on our website.

UPDATE: Coverage of the White Paper.

• NCTA: Broadband Funds Should Be Competitive, Technologically Neutral, and “Value Producing”
• On Rural Broadband
• NCTA White Paper: Focus Broadband Stimulus Funds on Unserved and Adoption