NCTA has released a new white paper prepared by Microeconomic Consulting & Research Associates, Inc. (MiCRA). The report is entitled Benefits to Consumers from the Transformation of the Cable Industry. In part it is about the cable industry’s transformation from a simple analog video provider to a provider of multiple services over an advanced digital communications platform. But more simply, it’s about the benefits to the consumer of cable’s Triple Play of voice, video and data.

Here’s a typical data point from the report, that shows how far we’ve come over the past decade.

A typical cable subscriber in 1998 paid $27.00 ($37.00 in 2008 dollars) for a few dozen television channels (composed primarily of local broadcast television, local public, educational and governmental (“PEG”) channels, superstations, and a handful of cable networks). In 2008, this same subscriber could purchase a suite of services, for approximately $100 per month, which included digital voice service, high-speed data service, and digital video service offering hundreds of channels of increasingly popular cable network programming, high-definition video quality, and large libraries of on-demand programs.

A look back to the 90s, before our fiber buildout, shows how powerful the impact has been of cable’s improved hybrid fiber-coax architecture. Back in ’98, only a small fraction of subscribers were taking services like digital video, phone and high-speed data access. For example, there were 1.4 million digital subs in ’98 (according to SNL Kagan) and there were 40.4 million in 2008.

In analyzing the power of bundling, the report says:

The marginal cost of providing an additional customer with any of the three services (voice, data, or video) is low because of the large economies of scale in deploying a wireline (or fiber-based) network. Moreover, once a customer has subscribed to one service, the marginal cost of providing that customer with a second and third service is even lower.

In addition, these savings can be passed on; according to the report, “[b]undled services are priced between $5.00 and $50.00 lower than the sum of the prices of the components.” MiCRA estimates that that cable’s investments – $129 billion spent in upgrades between 1999 and 2008 – have resulted in about $35 billion in annual consumer benefits. The study shows that the benefits from offering new services and new service bundles are shared across all demographic groups, including lower-income households.

You can find a copy of the entire report on NCTA’s website.

The Senate Commerce Committee this week held a hearing “Rethinking the Children’s Television Act for a Digital Media Age” to explore if rules governing television programming for children should be updated to reflect the new media world that we now live in.

Among those testifying before the committee was new FCC Chairman Julius Genachowski, who mentioned that the FCC will be launching a Notice of Inquiry that will address these issues including how “the FCC can best protect children in a digital age,” and he said that the agency will look at “new concerns and new opportunities in the new media world.”

During the hearing, some members of the committee mentioned how they would like a tool on a TV or remote control (specifically, the idea of a “little red button” ) to provide information about the show and the show’s rating.

From cable’s perspective, the good news is that this button (which sometimes even comes in red) already exists.  About 65% of cable customers subscribe to digital cable service and their set-top box remote controls include an “Info” (or other similarly worded) button that, when pressed, pulls up program content descriptions and ratings.

But perhaps even more important than this one button, cable operators have for many years empowered their customers with parental control options built right into cable’s set-top boxes that enable families to monitor and control TV viewing in their household.

Cable’s parental controls take just a few simple steps to set up via the easy-to-use on-screen menus which are guided by the remote control.  The industry has also created and participated in programs to educate parents about these tools, like the Control Your TV and The TV Boss campaigns of recent years.

Parental control tools help parents both identify programming that is appropriate (or inappropriate) for their children, and then provide a way for parents to block access to programming that they do not want their children to watch.  The parental controls work well because both programmers (those who produce the content) and operators (those who deliver the content) are working together.

For their part, cable programmers utilize a common rating system to provide parents with information about a show’s age appropriateness and its content.  The so-called “content descriptors” for the program tell parents why a particular show was given a specific rating, making is much easier to decide if the program is something they want their kids to watch.  Using the ratings information provided by the programmers, cable operators then provide customers with the technology to identify and block programming based on these ratings, as well as a variety of other options.

There are many ways parents can use these tools.  Entire channels, or entire features like video-on-demand, on a cable line-up can be blocked.  Programming can be blocked based on age-appropriateness via the age-based ratings, or by content descriptions, or both.  Once an age-appropriate viewing level has been set, the parental control tools can automatically lock higher ratings or levels of content.

For example, if a customer chooses to lock based on the TV-PG rating, all higher-rated content – such as TV-14 and TV-MA – is automatically blocked.  If a customer chooses to block based on a content descriptor – such as “moderate violence” – higher levels of violent content will also be automatically blocked.  And some digital boxes also enable customers to block content based on time and day.

These tools are really at the fingertips of parents, and it is as easy to turn on these settings for the kids, as it is easy to temporarily turn off all locks (for adults to view what they like) and have those locks automatically restored once the set-top box is turned off.

Besides the easy-to-use parental control technology, cable offers hours and hours – and channels and channels – of kid-friendly, family, and educational programming.  Adam Thierer of the Progress and Freedom Foundation did a great job highlighting the many available options in his post: We Are Living in the Golden Age of Children’s Programming.

Cable TV allows kids to explore animals from Discovery Kids show Bindi the Jungle Girl, travel to faraway places with Nick’s Dora the Explorer and dance alongside Mickey Mouse on Disney.  However, in order for cable to entertain everyone, there are some shows that don’t cater to children.  Parents are best suited to decide what channels and shows their children should watch, and then utilize the parental control tools to help carry through on these decisions.

Not many hours go by in Washington these days without talk of broadband policy, and this week was no different.  At the National Press Club, the Phoenix Center for Advanced Legal & Economic Public Policy Studies released their “Broadband Adoption Index” (or BAI), their methodology to provide a way to evaluate the value of broadband to society.  The BAI demonstrates how the benefits of different broadband technologies can be examined and compared.  The BAI doesn’t just count actual connections, it looks at the “value consumers and society get from adopting various broadband technologies.”

For example, in some countries around the world, mobile or cell phone connections are extremely valuable to those populations.  In remote places where families may not own or have access to personal computers, a cell phone connection is a useful and vital link to the world.  Alternatively, a cell phone connection in a typical American city may be valued much differently than the current 15Mbps cable connection that is currently available in that neighborhood.

The impetus behind the new index is because broadband adoption’s value is currently not weighed and the organization most cited for worldwide broadband data — the Organization of Economic Cooperation and Development’s (OECD) – relies on a flawed methodology that doesn’t take into account household size, which is a huge factor when you compare the U.S. to most other countries.

Problems with OECD rankings are nothing new.  In fact, we’ve talked about issues with that data and U.S. broadband ranking a few times in the past [The Trouble with Broadband Deployment Statistics, All Things Being Equal, Japanese Broadband, and Getting America Connected].  The Phoenix Center contends that their BAI can be a more useful tool since it looks at worldwide broadband adoption rates, rather than the broadband connections per capita OECD uses.

So, how can the BAI useful in a policy arena?  First, the Center mentions the importance of setting targets for broadband adoption and deployment as a nation.  Without a target, how will be know when we’ve achieved success?  Is success for the U.S. when high-speed broadband is available to 100 percent of the population?  Or, is success when 100 percent of the population utilizes broadband technology?  The report also notes that the government has not set a target, so until they do, it will be difficult to measure success, especially in light of the $7 billion in stimulus funds that have been dedicated to broadband.

The Phoenix Center also hopes policymakers look beyond the OECD data and its limitations.  As they note in the executive summary of the report, merely comparing the per-capita adoption rates for two countries with differing demographics, economies, and population density “provides little information relevant to broadband policy.”

While there are many voices talking about broadband policy and strategy, most universally agree a strong broadband infrastructure here in the U.S. is of deep importance for future economic growth, health care, education and jobs.  Cable has already played an important role in broadband deployment thus far, wiring 92 percent of U.S. households for high-speed Internet access.

As the government moves closer to granting its broadband stimulus funds, we’ve outlined what we think should be the guiding principles [video, blog post, white paper].  And we’ve also filed comments in the FCC’s proceeding to craft a national broadband plan, which is scheduled for a early 2010 delivery.

A little over a year ago, we posted about the PointSmart.ClickSafe. initiative, which focused on media literacy and online safety. Specifically, I reported on the Online Safety Summit we held last June (as well as interviews with a couple of the participants). At that time, we announced that a coalition of tech companies, child advocacy & parents’ groups, educators, & health researchers would work together to develop a list of best practices.

Today, the members of that coalition were joined by U.S. Reps. Debbie Wasserman Schultz (D-FL) and John Shimkus (R-IL) to announce the release of the resulting report of their findings: PointSmart.ClickSafe: Task Force Recommendations for Best Practices for Online Safety and Literacy.

Here is some of the news coverage:

• Tech Firms Report on How to Keep Kids Safe Online
• Google, Verizon, Others in New Child Safety Push
• Online Safety Consortium Backs Education, Coordination
• Businesses Should Provide Online Safety Education, Report Says

There are also reports from the blogosphere, such as Google and Verizon‘s policy blogs, as well as from the Progress & Freedom Foundation. [UPDATE: Also, a post from The Media Institute.] Members of Congress also released statements of support.

In addition, CongressDaily reported that legislation may be coming soon on this issue:

Rep. Debbie Wasserman Schultz, D-Fla., will soon introduce legislation that would create a competitive grant program for state and local education agencies and non-profit organizations to provide Internet safety education to teachers, schools and parents. The measure, which would authorize up to $175 million over five years, would be administered by the Justice Department in collaboration with the departments of Health and Human Services and Education.

I asked Frank Gallagher, the Director of Education and Media Literacy at Cable in the Classroom, for some thoughts on the issue of online safety. He reports:

Children’s Internet safety is an “ecosystem of shared responsibilities.” It’s an issue that’s bigger than any one group or sector. The Internet industry, government, law enforcement, advocacy organizations, schools, parents, public health — all these stakeholders have vital roles to play but none can, by themselves, ensure child safety.

Yet, too often, in the search for a silver bullet solution, well-meaning organizations within these sectors release recommendations that cover only a single sector (i.e., what law enforcement can do). They are working in silos. What each does is necessary, but not sufficient. A broader approach is necessary.

That’s what makes PointSmart.ClickSafe. different. Growing out of the PSCS Summit last year, this effort began as an attempt to define a set of voluntary Internet safety best practices for the Internet industry. The task force that created this report consists of a diverse group of stakeholders including all aspects of the Internet industry, various internet safety and media literacy organizations, educators, parents, child advocacy groups and public health professionals.

Led by the Internet Keep Safe Coalition (i-KeepSafe) and Common Sense Media, in collaboration with Cable in the Classroom and NCTA, the task force worked for a year to create this report and best practice recommendations. The task force began by looking at the whole landscape of child internet safety. It looked at child development, technology options, public health issues, and legal concerns and was informed by the work of the Byron Report and the Home Office recommendations in the UK and the Berkman Center’s report.

The best practices are the heart of the report and lay out what the Internet industry can do to help keep kids safe online. However, the report also recognizes that the Internet industry cannot, by itself, ensure safety and that many other stakeholders must play important roles. To that end, the report also contains recommendations for actions and policies covering other stakeholder groups.

The best practices represent a big step towards a safe and secure Internet experience for children. Combined with the NTIA panel recommendations (when issued), educational efforts in the schools, involvement of public health professionals, law enforcement and government, we can make significant progress towards our goal of protecting kids as they explore the wealth of online opportunities they have for information, self-expression and entertainment.

The report can be found online.

As mentioned previously, we were attending the Personal Democracy Forum earlier this week. Winding up Monday’s session was a panel entitled “The Obama Broadband Initiative and the Future of the Internet,” with opening remarks by Blair Levin of the FCC (video here) and a discussion, moderated by PDF’s Andrew Rasiej, involving Free Press’ Josh Silver, NCTA’s James Assey, and AT&T’s Hank Hultquist.

The WSJ’s Digits blog offered an accounting of the panel:

Panelist Josh Silver, the executive director and co-founder of Free Press, a media advocacy organization, ripped into his co-panelists, who represented the wireless and telecommunications industries.

He accused them of price-gauging Americans on Internet service and monopolizing the industry rather than engaging in competitiveness and helping provide affordable access to the poor. “We’re looking at industries which are protecting a very lucrative business model, and there are starting to be increasing numbers of people at the gates understanding that the ISP market should be competitive,” Mr. Silver said.

It was a very spirited discussion.

Let me quote a few notable remarks on Twitter:

@mikemathieu: AT&T and cable industry reps wriggling on stage as Josh Silver points out price protection schemes of broadband providers.
@zbrisson: One of the best things of the day, Silver from free press calling the cable companies out for their oligarchic greed.
@abenamer: josh silver points out that the lack of competition with the cable and telephone duopoly keeps prices artificially high
@jonathanpberger: The hatred for ATT & Cable co.’s is palpable. The people want blood.

Tough crowd.

Among James Assey’s comments, he pointed out that companies are investing significantly in infrastructure, which will encourage faster speeds. As he put it, “We’re leaning forward to the future.” As we’ve said many times, the cable industry along has invested well over $100 billion since 1996. Assey also noted that there is competition in the broadband marketplace; however, it costs a lot to build & maintain robust broadband networks and private capital is generally required. He also pointed to a recent Pew report (Home Broadband Adoption 2009) that found that value & utility beat availability & price when it comes to why respondents did or did not take broadband.

This national discussion of America’s broadband future is important and we’re committed to taking part in the conversation. We look forward to other events like PDF as the process moves forward.