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.

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.

So, it is certainly not a surprise that the Free Press response to my last post smoothly skips over some fundamental points. On the Free Press homepage, the first thing you see is a technicolor box blaring “Tell Congress: Investigate the Unfair Internet Penalty.” In the Free Press response, this has now turned into a mere “inquiry.” Who could be against that? Especially when these plans are rolling out “under the radar.”

Huh? Time Warner Cable couldn’t have possibly been more transparent about their thinking over the last year, including repeatedly briefing members of Congress and reaching out to interested groups like . . . oh, Free Press. And they have repeatedly made clear that they were listening to constructive comments and views.

Thus, Time Warner Cable’s announcement today that they will spend more time on engaging interested parties, members of Congress . . . and most importantly, their customers by deploying metering tools that help all us become more educated consumers . . . is completely consistent with how they have approached this from the beginning. Bottom line: they have been and are engaged in exactly the kind of outreach and transparency interest groups profess to want.

And I have a lot of personal respect for Ben Scott, but I had to chuckle at the very lawyerly but ultimately inadequate attempt to explain why they were really against usage metering before they were for it. But I suppose I will end on a note of agreement: Ben now says, “As for whether metering is fair — it can be.” Right.

None of us knows with certainty what works best for consumers. As broadband providers, we face daunting and ever-changing challenges in ensuring that we do our level best to provide consumers with what they want, when they want it. But our goal has been, is, and will be to communicate with our customers in an open and transparent manner; to try new models that can be used to attract new broadband users and more equitably spread costs among high and low volume users, and – at the end of the day – to let the consumer make the ultimate choice of whether new models survive and thrive or are thrown into the dustbin of history.

Great. Hundreds of billions of dollars have been and continue to be invested by our industry in the deployment of broadband and now the deployment of next generation broadband; speeds have doubled or tripled in just the last few years; new and spectacular applications keep getting launched; no anti-competitive conduct has remotely occurred; and, in fact, compared to many other industries, the Internet ecosystem seems to be one of the few really healthy, growing, and creative parts of our economy with continued investment and innovation taking place every day. At a time of economic and financial challenges for our country, I for one would rather Congress spend its time on real problems, not fictional ones.

Despite Free Press’s hyperbole, the facts are these: Time Warner Cable has merely suggested that they are interested in conducting a limited set of trials of a new pricing model – in a careful and transparent manner – that may serve the vast majority of their customers better by reflecting the growing reality that some consumers utilize far more high speed bandwidth than others. They have engaged in an open conversation with their customers and other interested parties about how they are thinking through their plans, and I would expect that only after gathering input would they announce more specific plans for what, where and how such tests would be conducted.

While it is certainly appropriate for all of us and anyone interested in the deployment and use of broadband technology to monitor the results of these and similar experiments, we should recognize the Free Press petition drive as the publicity stunt it so obviously is.

Let’s not forget that Free Press previously suggested that consumption-based billing could be an appropriate pricing model for network providers in a filing on network management at the FCC:

[T]hey could also charge by usage (emphasis mine), provide more bandwidth to all users, or actually offer high symmetric broadband speeds.

As well as to the media:

“I don’t quite see [metering] as an outrage, and in fact is probably the fairest system going — though of course the psychology of knowing that you’re paying for bandwidth may change behavior,” said Tim Wu, a law professor at Columbia University and chairman of the board of public advocacy group Free Press.

And, while they have every right to change their minds, what hasn’t changed is that it is entirely appropriate for any actor in the Internet eco-system to test and examine new ideas and approaches that promote consumer choice and enhance the Internet experience for broadband users before making any permanent decisions. The right approach, as Time Warner Cable has done, is to conduct such tests in a transparent way, with full notice and explanation to their customers.

I don’t hold a brief for or against any particular pricing model. I simply do not have all the data to make an informed judgment about consumption-based billing; nor, with all due respect, does anyone else. The whole point of tests, it seems to me, is to learn what works and what doesn’t, and the details matter a lot.

But the “shoot, ready, aim” mentality seems all too prevalent these days. For example, it is somewhat tiresome to have Free Press repeatedly assert that every effort by network providers to examine any new approach or idea in our or related industries is somehow designed to protect against the supposed “threat” of “Internet video.” This is so stale, and so at odds with the facts, that it really should not be necessary to point out the obvious:

• Over the last few years, the use of broadband connections to view Internet video has grown at a faster rate than any other application. According to one estimate, traffic generated by YouTube video in 2008 alone was more than the sum of traffic crossing the Internet backbone in 2000.
• Far from fearing online video, our industry is courting and exploring partnerships to bring Internet video to the television screen;
• Our industry has worked — and continues to work — cooperatively with consumer electronics manufacturers to ensure TVs can receive Internet video by building in the necessary ports;
• Our industry is the largest provider of broadband in America, and we view the health and growth of the Internet ecosystem as fundamental to our success, which means the applications and services on the Internet must thrive too;
• Our industry is aggressively deploying next generation broadband across America in order to enable, not restrict, new applications.

Any one of these basic facts would have been evident simply by touring The Cable Show in Washington, D.C., earlier this month.

I would respectfully suggest that this is precisely the time in which we can and should test new ideas, especially when the evidence demonstrates that such tests are being planned with care and transparency.

Some blogs had interesting reactions, such as CrunchGear and VideoNuze.  Since I’m not a sports fan, I neglected to note that this past weekend’s football games focused a spotlight on this issue.  According to Multichannel News, Time Warner and LIN continued their talks yesterday. A Bloomberg story from Friday adds some nuance about the financial issues lying behind the negotiations.

Viewers of a LIN station in New York, WIVB Buffalo, got upset when they noticed some critical comments were being deleted on an online forum.  For example:

• A viewer in Lewiston: “I thought these forums were for discussion, complaints, compliments, etc? Why is it every time I come to this forum, the posts about the TW?CHANNEL4 are deleted/removed? Whats up with that???”
• A viewer in Tonawanda: “I came here to topix on my lunch hour to find that there are all of the sudden NO posts about your fight with time warner since SATURDAY!?!?!?!?  Considering that there were about 40 topics here last night, I find it interesting that people who claim to be “connected” would resort to such censorship.”

And so on and so on…

Speaking of online forums, Jeff Simmermon, Director of Digital Communications for Time Warner Cable, did an interview with the blog Austinist about the situation with KXAN, the LIN station in Austin, TX. In addition, Simmermon and KXAN knocked gloves on Twitter. Here are some excerpts:

whitneyredman: @KXAN_News KXAN and LIN TV is freaking laaaame.
JeffTWC: @whitneyredman — I know the feeling, Whitney. I can’t decide this any more than KXAN can … it’s all up to LIN TV.
whitneyredman: @jeffTWC Does LIN TV have a Twitter?
JeffTWC: @whitneyredman — no, they’re just a poor little media conglomerate with a couple TV stations to limp by on …
KXAN_News: @JeffTWC It’s not ALL up to LIN, Jeff. Check out the facts at http://blogs.kxan.com/kxantimewarner
JeffTWC: @KXAN_News — if “less than a penny per day per subscriber” is such a piddly sum, why are you guys making such a stink?
KXAN_News: @jeffTWC I guess we could ask you the same thing…up there in your big tower in NYC.
JeffTWC: @KXAN_News — everyone knows I’m promoting my business’s best interests here. You’re doing the same thing and calling it journalism.
JeffTWC: @KXAN_News — I think the real question here is: which of us is rubber, and which of us is glue?

Time Warner also launched a website on the issue: The Truth Hurts KXAN! I mentioned that Time Warner produced a video explaining how subscribers can find some content from LIN stations online for free. The video (which you can see embedded below) also explains how to connect your computer to your television in order to watch that programming on TV.

UPDATE: In Green Bay, Time Warner has the website Tell the Truth WLUK!

The basics: Cable operators and other Multichannel Video Programming Distributors can’t retransmit broadcast signals (such as NBC, ABC, CBS, or Fox) without first obtaining the broadcaster’s consent.

TV station group LIN TV and Time Warner Cable have been in negotiations, but haven’t reached an agreement. At midnight last Friday morning when the existing carriage deal expired, LIN pulled the signals of 15 stations in 11 markets from Time Warner systems, which affects about 2.7 million of their subscribers.

While negotiations continued over the weekend, alternatives were promoted. LIN suggested Time Warner customers could switch to such competitors as Dish Network or FiOS TV. Time Warner has given away around 50,000 antennas to allow over-the-air reception of those broadcast signals and has also produced an online video that shows people how they can watch some broadcast programming over the Internet for free.

If you missed NCTA’s Kyle McSlarrow on C-SPAN’s The Communicators Saturday night, you can now watch the episode online (or catch the repeat tonight on C-SPAN 2 at 8:00 p.m. ET). One of the first questions he addressed was the issue of retransmission consent. NCTA has expressed concern that a number of carriage deals are set to expire at the end of this year, about six weeks before the Digital Television Transition occurs on February 17. There is potential for consumer confusion and disruption with these deals being renegotiated during this period.

While the NAB has volunteered a four-week quiet period surrounding the DTV transition date – two weeks before Feb. 17 and two weeks after – McSlarrow has proposed that a slightly longer quiet period would be beneficial for consumers, while hardly tipping the balance of power in retrans negotiations.

Despite all this complaints about Time Warner’s trial and claims its caps are way too low have been ringing around the Internet.

Exactly how much bandwidth do you consume?  It’s hard to say as the number various from user to user.  However, Plus.net put together a nice little graphic showing you what a single Gigabyte gives you - including 4 hours per day of web browsing, 10 song downloads per week, e-mail, Internet radio usage, etc.

What does all that equal?  Well, NCTA member BendBroadband operated with a tiered structure and found that 91% of their customers consumed less than 10GB per month.  BendBroadband found that 99.5% of their users consume less than 100GB per month and now uses that as their cap.

Somewhere above the 91% consuming 10GB per month, and the .5% consuming more than 100GB lies the heaviest Internet users.  Estimates in various studies suggest that 5-10% of Internet users consume half or more of all bandwidth.  Much of that traffic – though specific estimates vary greatly – consists of P2P (peer to peer) connections exchanging files.   A study by SafeNet, Inc. suggests the overwhelming majority of P2P traffic may also be illegal content:

But 90 percent of P2P downloads are still of illegally copied content, according to David Hahn, vice president of product management at SafeNet Inc., which tracks the networks.

Hahn said 12 million to 15 million people are file-sharing across the world at any one time, mainly on the BitTorrent and eDonkey networks. The attraction of file-sharing is not just that it’s free – there’s also content available that can’t be had by legal means, like TV shows that haven’t aired in Europe.

Absent an exact figure of P2P usage, and whether or not you accept SafeNet’s 90% estimate, one thing is undeniable – a small percentage of Internet users are placing a burden on other users.  That is one reason a number of P2P applications providers are working to identify ways to make P2P a better and more efficient means of distributing content.  We believe that is a worthwhile pursuit, which is why NCTA and various cable companies are participating in a “P2P Best Practices” effort led by the Distributed Computing Industry Association.

In many of the articles written about the Time Warner experiment, detractors point to the number of movies than can be downloaded as a specific reason the cap is too low.  An average movie downloaded legally from iTunes is around 1-1.5 GB.  A 40GB cap would allow you to download more than 30 movies per month (or one a day) if that’s all you did.  Most people, however, don’t consume one movie per day, let alone 30 per month.

Mark Cuban, one of the founders of Broadcast.com and a web pioneer, points out the folly of this argument in a post on his blog yesterday.

Its been amusing to read all the blog posts with the math telling all of us just how many standard def or high def movies tiered subscribers will be limited to. You can have 2 or 3 of your favorite SD TV shows per day, or X number of HD movies per month. Say what? 

I have news for all of you that want to dedicate their internet connections to downloading movies. There is a new and exciting development. Its called an Application Specific Integrated Video Service (ASIVS). What is an ASIVS ? Its a computer dedicated specifically to downloading and playing both standard definition and high definition video. You connect it to a network that is dedicated to delivering GIGABITS PER SECOND of high quality video with ZERO buffering. It’s amazing, it always works and connects right to your standard def or High Definition TV, easily. Most of the systems I have seen have a pretty good programming guide and scheduling system and they will let you download AS MUCH VIDEO AS YOU WANT, limited only by the size of its hard drive!!

If you haven’t heard of the ASIVS, its because most people call it a DVR.

If downloading TV shows is so important to you, add a DVR to your cable or satellite service for 5 bucks a month and download all you want. If you want to watch those shows on your laptop, connect the composite video out in your DVR to the composite in on your laptop. Same with movies.

Can’t download movies illegally, tough.

The internet is a great resource for unlimited quantities of video. Downloading video is an internet given right. Using the internet to fill up your PC turned DVR at the expense of the performance of every user around you is not.

Mark’s right on the money with this.  Using the Internet to download video is your right and prerogative.   Using your Internet connection to consume all the available bandwidth and degrade your neighbor’s Internet experience simply isn’t.

As for Time Warner’s caps, are they too low?  Time Warner will soon find out.  They have described this as a test and will determine whether the model works and whether the caps are sufficient.  Unlike many of their critics online, Time Warner is unwilling to pronounce something a failure before even giving it a chance to prove itself.