Over the past 15 years, cable has invested more than $170 billion to upgrade networks, add new equipment and improve next-generation networks.  From this significant investment, consumers are reaping the benefits of the fastest speeds to connect with family, telecommute or download an HD movie for their next trip.

But cable is not stopping here.  Operators are continuing to invest and deploy the latest technology for even faster speeds to even more homes.  As we said in an earlier post, Comcast announced in April that it is offering 105 Mbps service to 40 million homes.  At year-end 2010, speeds of 50 Mbps or faster were available to more than 80 million homes by cable operators.  SNL Kagan notes that ultra-fast wideband service – with speed tiers that exceed 100 Mbps – should reach 94 million homes by the end of 2011.

Most importantly, cable’s customers are pleased with these faster speeds and reliable networks.  A June 2010 FCC survey showed that 91 percent of subscribers are satisfied with the speed of their broadband service.

A few news stories related to the cable industry have already emerged this week.

When Comcast launched the Xfinity app back in November, there were references to streaming video coming soon. This was the week that Comcast announced the arrival of that streaming video. It was not in Vegas (as in ’08), but rather at the Citi Conference for Media, Entertainment and Telecommunications, that Brian Roberts announced that Comcast would support live TV streaming on tablet devices later this year. Read more here, but you can imagine how this made a stir at CES, with the emphasis this year on tablet devices.

Cisco CEO John Chambers presenting the company’s “Videoscape” TV platform yesterday, a new hardware and software system that will (to quote their press release) bring “together digital TV and online content with social media and communications applications to create a new, truly immersive home and mobile video entertainment experience.”

From the Wall Street Journal‘s coverage:

Consumers won’t be able to buy the Cisco boxes directly, as they do other devices already available from companies like Roku Inc. and Apple, which allow users to access the Web from their TVs but don’t offer a cable connection. Rather, Cisco will sell its hybrid boxes to cable operators who, in turn, will lease them to subscribers, the people said. Cable operators will be able to customize the software interface and decide on pricing for the boxes.

Read more here, here here, and here.

Sony announced a plan that would allow Time Warner Cable to deliver programming to their subscribers through the use of Sony’s Internet-connected Bravia HDTVs. Yahoo said they were working with programmers such as ABC, CBS, HSN, and Showtime Networks to provide enhanced interactive TV features through broadband-connected TV sets and other devices.

Of course, the manufacturers aren’t just pushing connected TVs, but also 3D sets. “3net” was announced, a 24-hour 3D network that’s a joint venture of Discovery Communications, Sony and IMAX. On a related note, a company called Marchon announced they would be offering 3D glasses with designer frames, such as Nautica and Calvin Klein. Prescription lenses will become available later this year.

UPDATE: I missed the announcement of Hollywood’s Ultraviolet initiative, which will allow consumers to purchase content once and view it on a variety of platforms.

We all have heard the Internet described as a “network of networks” but we generally give little thought to the remarkable logistics involved.  For the Internet to operate, thousands of networks – small and large, wireless and wireline, urban and rural, domestic and global – must establish arrangements to govern how they interconnect and exchange traffic.  While there are different types of providers (backbone, content delivery network (CDN), etc.) and different types of arrangements (settlement-free peering, paid transit) – see this White Paper for a good explanation – the key point is that these myriad of arrangements have developed over time, in the marketplace, without any legislative or regulatory intervention.  That the Internet works at all is amazing; that it works 24/7 to bring consumers content from around the world at lightning speed borders on the miraculous.

The FCC consistently has taken a “hands off” approach to these arrangements. It has not imposed any form of regulation on these arrangements, nor has it intervened in the periodic disputes that occur between backbone providers, like Level 3’s dispute with Cogent in 2005 – in which Level 3 insisted that Cogent pay a fee for transmitting content on Level 3’s network rather than peering on a settlement-free basis. Moreover, while the FCC has been considering net neutrality regulations for some time, it has never suggested that it was considering any change in the regulatory treatment of backbone and CDN providers. (Indeed, even the most fervent net neutrality advocates, like Free Press, have recognized the legitimacy of these commercial arrangements; see note 8 on pg. 17 in these comments).

So is there anything unusual about the dispute between Comcast and Level 3 that should cause the Commission to reassess its hands off approach to these types of arrangements?  No.  While some of the initial commentary, reacting solely to Level 3’s press statement, reflected a knee-jerk reaction that any dispute involving the Internet implicates net neutrality; as the day wore on, cooler heads seem to be prevailing, with most observers, including some net neutrality advocates, recognizing that this was nothing more than one party to a commercial negotiation trying to use the regulatory process to gain negotiating leverage (Also see this article from Multichannel News).

Nor can Level 3 credibly claim to be surprised by Comcast’s approach.  Comcast’s policy on settlement-free peering – including its expectation that any peering partner “maintain a traffic scale between its network and Comcast that enables a general balance of inbound versus outbound traffic” – is posted right on its website. When Level 3 approached Comcast and asked for a significant change in the parties’ physical interconnection arrangement, it should have fully expected that Comcast would seek a corresponding change in the parties’ business arrangement, consistent with the general practice across the industry.

Under the circumstances, Level 3’s plea for government intervention in this commercial negotiation is entirely unwarranted.

(You can also read coverage on the conference blog and at Barron’s Tech Trader Daily blog.)

Burke makes a good case for cable’s resilience in the face of the supposed looming threat of online video (See my post from last week). I particular enjoy the bit, during an exchange about “à la carte” offerings of service, when Burke gently chides Swisher for comparing the monthly price for Comcast’s video service to the daily price for the Wall Street Journal.

To start the conversation, Powell asked Brian Roberts if cable should be worried about online video.  Roberts responded that every new medium presents a new opportunity, but said they all present avenues to deliver lawful content; the more opportunities for that, the better.

Andreessen (who shared details of his 36 port HDMI switch with 36 different inputs and a $4,000 per month commercial Internet connection) said that was the right way to look at the future – since every device is now expected to be Internet-enabled, and to allow content consumption.

Rothman chimed in to agree, but said that creates a requirement that content be compelling.  Without compelling content, you just have a bunch of devices to check baseball scores.  Rothman says the key to content online is two-fold.  First, the most important piece of content is good storytelling.  Second, that storytelling must be accompanied by a way to protect and monetize content.

The various models of monetization became a hot topic and Powell noted that customers may have different thoughts about the monetization process – so cable operators may end up fighting with consumers.

Moonves answered by noting that, for his company, there used to be one source of revenue – advertising – but now there are many more, such as syndication, retransmission fees, DVDs,  iTunes, Hulu, etc.  That presents more options to address the monetization question.

The introduction of the topic of advertising led Powell to ask what impact services like Facebook will have, since they present a new, and possibly competing, set of audience segmentation data.  Powell noted the industry no longer has the exclusive on audience data.

Bewkes suggested all the different entities must become partners in the sharing of audience data, and Moonves said one of the essentials is accurate eyeball measurement – and we don’t have that yet.

Andreessen suggest Facebook can be an enabler of content by providing data, and also by sharing content with friends.

Roberts said people may go to other providers  – not because the content is different, but because the experience is different or cooler.  As a result, it is incumbent upon cable to stay fresh and cool, and spend more time on the interface.

Asked what makes them nervous, the panelists suggested that the uncertainty of regulatory change was a great challenge.

Moonves joked, “Whenever they say it’s not about the money, it’s all about the money.”

The main takeaway from today’s briefing is that Comcast and Time Warner will begin a trial to provide 5,000 Comcast customers access to cable programming (TBS and TNT for now) on a platform (the computer screen) where it wasn’t previously available, for no additional charge.  It is no more complicated than that.

The primary details released today include a set of principles that the companies agreed to:

• Bring more TV content, more easily to more people across platforms.
• Video subscribers can watch programming from their favorite TV networks online for no additional charge.
• Video subscribers can access this content using any broadband connection.
• Programmers should make their best and highest-rated programming available online.
• Both networks and video distributors should provide high-quality, consumer-friendly sites for viewing broadband content with easy authentication.
• A new process should be created to measure ratings for online viewing. The goal should be to extend the current viewer measurement system to include advertiser ratings for TV content viewed on all platforms.
• TV Everywhere is open and non-exclusive; cable, satellite or telco video distributors can enter into similar agreements with other programmers.

You can check out this story from CNET’s Marguerite Reardon – Comcast and Time Warner team up to deliver TV online – for a complete recap.

More details about the trial will undoubtedly be forthcoming, but the immediate knee-jerk negativity by some in the blogosphere was not only predictable, but uninformed.

But thankfully, there are also some more reasoned voices weighing in that recognize the potential of this announcement to bring real benefits to consumers by offering them access to more content in more places.  Will Richmond from VideoNuze boldly declares:

Despite what some skeptics say, consumers also stand to gain.  All that great cable programming that’s been locked to the set-top box in the home would now be available online. It sort of like cable’s version of on demand Sling, but without any upfront or monthly charge (at least that’s what we’re hearing for now).

Richmond takes a more rational view that this model is one that benefits both programmers and consumers, but they still need to work out some of the technical issues:

Comcast and Time Warner are taking a solid step forward in delivering more value to their subscribers who increasingly live their lives online. Now they need to tamp down the hype and just focus on executing in a logical, user-friendly way.

The rest of Richmond’s post is available here and he also aptly highlights some of the challenges that this trial will face including the necessary business model issues that the free lunch crowd tend to ignore.

The first launch was in the Twin Cities market in April of 2008. Since then, it’s been popping up all over America: Baltimore, Atlanta, Chicago, St. Louis, Boston, Philadelphia, Seattle, Portland, Indiana, New Hampshire, New Jersey, New York.

Now, Washington, DC will also be benefiting from more robust bandwidth. In May, Cox deployed its Ultimate Internet service to residential and business customers in Northern Virginia. Today, Comcast announced that its Extreme 50 service will be launched in the DC Metro area. The service is first being offered in the Anacostia neighborhood, with the entire area expected to have wideband by year’s end. Most existing high-speed Internet customers will see their speeds double for no additional cost.

Now that cable is the broadband leader in Our Nation’s Capitol, you can look for continued wideband deployment by operators all over the country. Stay tuned!

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.

Competition is the lifeblood of a successful and thriving marketplace, and the cable industry faces stiff competition across all the markets it serves. The consumer is the beneficiary, enjoying more choice, greater convenience and better value than ever before.

Other companies come out with new products and services and we do likewise. But it may be that Verizon is feeling the heat a bit. I’m assuming that’s why they felt the need last week to launch an attack on the cable industry’s new DOCSIS 3.0 specification, which enables wideband Internet access.

Last year, we tracked Comcast’s deployment of DOCSIS 3.0 in a number of markets. Last week, Charter Communications joined in with the launch of its Ultra60 service. Later that same day, on Verizon’s PolicyBlog, came this post: Behind Cable’s DOCSIS 3.0 Broadband Claims. Let’s break down Verizon’s arguments.

Verizon correctly note that DOCSIS 3.0 equipment employs channel bonding to deliver faster speeds (Comcast’s Extreme 50 offers 50 Mbps downstream; Charter’s Ultra60 is 60 Mbps), but also has the potential to deliver hundreds of megabits per second. Verizon leaves out the context that cable has been migrating towards an all-digital environment for years (Here is one typical post explaining the transition). They also assert that channels for use in DOCSIS 3.0 services will come exclusively by moving basic analog tier channels to digital. That is incorrect, since it ignores the use of switched digital video which allows cable operators to reclaim bandwidth in the digital tier.

Citing many analyses – yet linking only to a report prepared by the Fiber to the Home Council (hardly an unbiased source) – Verizon states that higher speeds on cable will decrease the customer experience and will require cable to upgrade.

In fact, the cable hybrid fiber-coax plant offers a great deal of capacity and flexibility in how nodes are combined to provide optimal service levels based on subscriber penetration and demand. But also unstated is the fact that FiOS also multiplexes (or combines the signals) to customers onto a shared trunk — they just do so in a different portion of their network.  In other words, even though the link to customers might be very fast, there is still a choke point where customers have to compete for bandwidth.  Too many customers trying to access the Internet at the same time can have the same effect on a FiOS network as it could on a DOCSIS network. Funnily enough, the blog post makes it sound as if Verizon doesn’t have to employ any network management at all!

Verizon makes a broad assumption regarding cable operator deployment plans for DOCSIS 3.0 services, somehow minimizing the technology because it is just now being deployed, and citing “indicators” that it won’t be deployed to all customers.

I’m not sure what tea leaves were used to make that assertion.

Comcast has been quite public in indicating it had DOCSIS 3.0 services in front of 10 million homes and businesses at the end of 2008 and plans to have it in front of all the homes and businesses it passes with plant capable of delivering 3.0 service in 2010. That’s just one cable operator out of the dozens that now have plant capable of running DOCSIS 3.0 services. Those operators pass more than 90% of residences in the United States. And DOCSIS 3.0 service has been operating quite successfully outside the US for some time now, with deployments in Japan and Singapore.

All of Verizon’s arguments ignore the huge capital expense that Verizon has made and continues to make to ultimately serve a portion (50%) of its footprint; specifically, Verizon is spending $23 billion to reach 13% of US households. In fact, they are still conspicuously avoiding neighborhoods and whole cities, as this Baltimore columnist notes. The rest of Verizon’s footprint will be relegated to DSL service, which is rapidly losing market share.

In contrast, cable’s investment to deploy DOCSIS 3.0 is modest.  And with the channel bonding that DOCSIS 3.0 permits, network speeds of 100 Mbps, 160 Mbps, and even higher will be possible.  In fact, a 750 MHz cable plant (90% of the country’s cable network miles) has a digital equivalent capacity of approximately 5 Gbps of bandwidth.

Bottom line: The cable industry feels good about the services we’re launching these days. Competition has been pretty good for us; take a look at the growth rates for cable’s phone service. I’ve seen Verizon representatives claim the company’s network is built for “decades to come” and is “future-proof.” We believe in continually getting bigger, better, faster. We believe in delivering more value over time.  I think this will be a good fight, and one that consumers will enjoy.

Those deployments will actually be expanded soon, reaching the city of Chicago, western and southern Chicago suburbs, northwestern Indiana, additional Atlanta communities, and the remainder of the Baltimore region in the first half of 2009.

All of this follow previous deployments earlier this year in the Twin Cities (April); Boston Metro and parts of southern New Hampshire, Philly Metro, and New Jersey (October); and Seattle, Portland, Spokane, Eugene (November).  If you’ve been reading this blog, you could have followed the progress here to here to here to here to… Well, here we are in December.

By the end of 2008, about 10 million homes and businesses will be able to sign up for wideband service. Customers can enter their zip codes at www.comcast.com/fastestfast to find out if they live in a serviceable area.