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.

Sixty years ago, however, there was a similar movement under way, to provide access to television to Americans who were then out of its reach.  Just as innovation and investment today are helping overcome barriers to broadband adoption, an earlier generation of visionary entrepreneurs invested sweat-and-blood equity to help bring television to then-underserved communities.

Another of those first-generation “cable pioneers” passed away this week.  Bruce Merrill, who launched cable TV in Arizona, died at 92.  Merrill’s story is typical of an era when entrepreneurs in the hills of Pennsylvania and Oregon – and in areas of the great land mass in between – climbed utility poles to string the copper wire that would act as a beacon for television signals from distant big cities… which could then be distributed and fed to the residents of rural and outlying towns who weren’t yet in TV’s footprint.

Merrill built Arizona’s first cable system, offering one channel, in Globe in 1951.  His company, then called Antennavision Corp., brought Phoenix’s channel 5 to the people of Globe, some 90 miles away.  As the idea caught on, Antennavision, before the end of the 50s, was bringing distant television signals to 10 Arizona towns, helping residents in 9,000 households view TV signals that previously had been out of their grasp.

Merrill’s nascent “community antenna television” systems, and the company that built them, were a predecessor to the cutting-edge cable and telecommunications company that serves many of Arizona’s cable customers today, Cox Communications.  A member of Merrill’s family is still bringing television – along with Broadband, digital voice, and other 21st century telecommunications services – to the people of Arizona.  Merrill’s nephew, Steve Rizley, serves as Senior Vice President and General Manager of Cox Communications Arizona.

Cox’s Vice President for Public Affairs, Ivan Johnson, celebrated Merrill’s distinguished career, and his contributions to life in Arizona, in a note to Cox’s Arizona employees:

“Arizona lost a pioneering legend in the cable industry when Bruce Merrill, founder of American Cable Television (predecessor to what today is Cox Arizona), passed away.  The son of one of Arizona’s founding families, Merrill, 92, built one of the state’s first cable television systems… Over subsequent decades Merrill continued to build and acquire cable systems, expanding into California’s Imperial Valley, New Mexico, Texas, Kentucky, Tennessee and eventually up the eastern seaboard into New York and Connecticut.  Other companies Merrill founded advanced the amplification and transmission technology that enabled cable television to grow.  He was also instrumental in the formation of industry organizations, including the Arizona Cable Television Association (ACTA), where he served as president from 1973 to 1975. Merrill also served as chairman of the National Cable Television Association (NCTA) and was a founding member of the Cable TV Pioneers.  He was also a charter member of the ACTA Pioneer Hall of Fame and was inducted into [Arizona State University’s] W. P. Carey School of Business Alumni Hall of Fame for his contributions to the local and national community.”

The passing of Merrill, and the retelling of his life accomplishments, reminds us of the role of passion, commitment, and innovation in driving the technological progress that enhances our lives.  Let us hope today’s class of entrepreneurs and visionaries continue to carry that spirit forward into the broadband age.

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.

This year’s panel was called “Road Trip: Mapping Cable’s New-Tech Progression,” and it provided a useful view of forthcoming technology initiatives. One of the themes was about managing the bandwidth of the cable plant.

Hearing this discussion reminded me of a common complaint about cable’s broadband service: the asymmetric nature of the connection, with a higher downstream than upstream. Some ask why broadband is typically structured in such fashion. Some suggest that other countries’ broadband is better because it’s symmetric.

I recall a notorious (to me) 2007 post from David Weinberger:

I pointed out that the “10 megs down, one meg up” mentioned by one of the panelists assumes that we’re “consumers” rather than creators; we should have symmetric up and down.

So, I asked the panelists what they thought about this notion that symmetric bandwidth is the Holy Grail of connectivity.

Tony Werner, EVP & CTO of Comcast, said, “We’ve seen a lot more growth in our downstream than in our upstream in our last 12 to 24 months. But there is continual growth, both up and down and I think you’ll continue to see us increase both of them.” He noted that cable has a “tremendous capability to blast the upstream more [than DSL], as well as the downstream, if there’s a market for it.”

Mike LaJoie, Executive Vice President & CTO of Time Warner Cable, agreed about market demand: “The ways that we build networks and provision services are responsive to how customers use it. I have some customers that do need symmetric bandwidth. I have customers on the business side who need more downstream than upstream, more upstream than down. I have products available for any of those things.” But, he said, “Most residential customers are skewed about 3 to 1, down to up. It came a little closer to symmetrical a couple of years back, but now it’s scaling back the other way. Whatever customers want, we build.”

Dermot O’Carroll, Senior Vice President of Access Networks for Canada’s Rogers Cable, pointed out that forecasts of Internet traffic say that in the next year or two, 90% of that traffic will be video. With video, the vast majority of that traffic is downstream. O’Carroll also said that this is the trend of their customers’ usage: “We’ve looked at the asymmetry of our traffic and, over the last number of years, it’s become more asymmetric, not less.”

All of this goes to show that one of cable’s strengths is that we have very flexible resources that can be reconfigured to meet our customers’ needs. Our broadband offerings will continue to change over time, in response to the desires of the marketplace.

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 folks at Cisco (an NCTA member) have put together a fun little game that lets you build your own ISP.  Starting in 1990, your dial-up internet company has to attract customers, make money, invest in new technologies, and remain profitable.  If you do it well, you’ll progress through the years and become a broadband innovator.

If you’re a tech/telecom junkie like me, you’ll find this very addictive.  If you can make it through the 1990s, please drop us a note in the comments and let us know.

In vacating the FCC decision, the court found:

• The Commission had failed to demonstrate that allowing a cable operator to serve more than 30% of all cable subscribers would threaten to reduce either competition or diversity in programming
• The record is replete with evidence of ever increasing competition among video providers
• Satellite and fiber optic video providers have entered the market and grown in market share since the Congress passed the 1992 Act
• Cable operators no longer have the bottleneck power over programming that concerned the Congress in 1992
• Over the same period there has been a dramatic increase both in the number of cable networks and in the programming available to subscribers.

Citing, “overwhelming evidence concerning ‘the dynamic nature of the communications marketplace,’ and the entry of new competitors at both the programming and the distribution levels”, the court found the FCC’s decision to be arbitrary and capricious.

In response, FCC Commissioner Robert McDowell issued the following statement:

It was clear in December 2007, when I dissented from the FCC decision to once again impose a 30 percent national cap on cable system ownership, that the effort to re-justify the very same cap that the D.C. Circuit first struck down in 2001 was even more vulnerable to court challenge the second time around.  Despite the Commission staff’s best efforts to provide post hoc empirical support for the chosen outcome, the court recognized that the 2007 analysis’ aging data and questionable assumptions sat oddly against the facts about new – and successful – competitors to cable systems in the multichannel video marketplace.  It should go without saying that, in the future, outcomes in our proceedings should be driven by the facts and law, rather than the other way around.

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.