The EAS is actually a national system that also provides communications capabilities to the President to address the American public during a national emergency. It involves the resources of broadcasters, cable television operators, satellite radio providers, and direct broadcast satellite (DBS) providers.

On November 9, at 2:00 p.m. (EST), the FCC and FEMA have scheduled the first-ever test of the Presidential Emergency Action Notification (EAN) of the EAS. The test will last about 30 seconds.  During the test, cable customers will see a special EAS channel regardless of the cable channel they are watching (You can see an example of an alert here.).

As the EAS test runs, the audio feed will advise viewers that it is only a test. The onscreen text will simply state:  “This is an Emergency Action Notification,” and in some cases, “for the United States” or “for the District of Columbia,” depending on the equipment.

The EAN message itself is set by the federal government; cable systems are required to pass through the government’s message to their viewers.

The cable industry is taking action to assist the government in educating consumers about the test.  Our member companies are airing public service announcements from the FCC to raise viewer awareness (Copies of these PSAs are posted on NCTA’s website).  Cable systems are also using invoice messages to alert consumers to the upcoming test.  And cable operators and programmers are linking to websites with more government information about the test, such as this one from the FCC.

Our message is simple:  This is just a test of the system, and no action is required.

NCTA continues to inform our member companies about test developments and has briefed other groups, such as the Cable Center Customer Care Committee and state and regional cable associations. Cable programmers also have pledged support in educating consumers.

An end-to-end nationwide test of the system is critical to assess the reliability and effectiveness of the EAS as a public alert mechanism. Cable will be expending every effort to help ensure the test is a success.

UPDATE: You might also want to read this post at the Time Warner Cable Untangled blog.

The Chairman, the commissioners and the FCC staff all deserve a great deal of credit for bringing this item to completion.  Universal service and intercarrier compensation are some of the most difficult, complex issues faced by the Commission and adopting an item of this magnitude is a significant accomplishment.  That we have concerns about some of the decisions made by the Commission in this order in no way diminishes our respect for its efforts and accomplishments.

On the positive side, we believe the item establishes a reasonable and workable process for transitioning to a more rational intercarrier compensation regime.  The Commission acknowledged over a decade ago that the current intercarrier compensation rules were irrational and created an environment ripe for regulatory arbitrage and disputes.  We are optimistic that the rules adopted today will help put an end to the arbitrage and the disputes.  We are particularly pleased that the item commits to placing carriers of VoIP traffic on equal footing with legacy telephone companies with respect to intercarrier compensation.

We are less enthusiastic about the universal service components of the order, which are far less ambitious than was recommended in the National Broadband Plan and the Notice of Proposed Rulemaking.  At a high level, the Commission’s “new” approach to high-cost support through the Connect America Fund is to give the incumbent phone companies preferred or exclusive access to virtually all the money.  Cable operators will be able to receive broadband support only in areas where an incumbent price cap phone company chooses not to exercise its right of first refusal (or “state level commitment” as it is now called).  This overwhelming preference for incumbent phone companies violates the universal service requirement that support be provided on a competitively neutral basis, and is a step backward from the current regime, which gave competitors an opportunity to receive support in any area where they were willing to meet the Commission’s requirements.

The degree to which the Commission has granted special treatment to large price cap phone companies is particularly disheartening.  AT&T and Verizon are the two largest telecommunications companies in America and the so-called “mid-size” price cap companies (CenturyLink, Frontier, Windstream) pay out the highest dividends among S&P 500 companies.   Given the financial strength and size of these companies, it is unreasonable and unnecessary for the Commission to give them: (1) preferential access to $1.8 billion annually in high-cost support in 100 percent of their territory through a right of first refusal; (2) recovery of as much as 90-100 percent of their access charge losses from an Access Replacement Mechanism that will increase consumers’ phone bills; and (3) exclusive access to $300 million in new high-cost support, in addition to 100 percent of their legacy support (which is phased out for competitors) before the new Connect America Fund begins.  We look forward to reading the order to see if there is a reasonable explanation for this blatant favoritism.

Although the lack of competitive neutrality is a major concern, there are a number of bright spots in the USF reforms adopted.  The Commission proposes to eliminate support in some (but not all) areas where cable operators offer broadband without a subsidy, a policy that NCTA has advocated for many years.  The Commission also adopted a budget for the high-cost program for the first time, another long-standing NCTA policy recommendation.

Consequently, while the item is far from perfect, NCTA greatly appreciates the efforts the Commission has made to begin the process of modernizing the USF regime.

For that reason, we applaud FCC Chairman Julius Genachowski’s announcement today of a new group called Connect to Compete, a “digital literacy corps” which will actively engage with consumers so they understand how high-speed Internet will enable them to find jobs, increase their skills and open up new opportunities.

We’ve addressed the issue of broadband adoption before (“Bringing Broadband to Low-Income Families” and “Increasing Broadband Adoption”), making this point that pertinence, and not just cost, has repeatedly been identified as a significant barrier to broadband adoption. In other words, as we said in this post:

…we’ve seen firsthand that some consumers simply see no benefit in broadband…that is until they start using the service and then they can’t stop.

The cable industry has been a leader in developing public-private partnerships as an avenue to increase broadband adoption. Many cable companies are deeply involved in community-based programs designed to overcome barriers to adoption, improve accessibility to broadband services and provide training and education on digital and internet literacy.

Comcast, Time Warner Cable, Cox Communications, Charter, Cablevision Systems, and Bright House Networks are just some of the cable operators that have launched community-based broadband adoption initiatives. (You can see more details on these efforts here, here and here.)

In addition, Discovery, one of cable’s premier programming companies, will contribute premiere educational content from Discovery Education, including video clips and digital lessons, to help bolster student achievement.

Cable has been a pioneer in proposing national partnerships, including the Adoption Plus program a few years ago, which included many elements that have been embraced in the FCC’s new initiative.

In addition, through Cable in the Classroom, the cable industry provides a variety of tools and resources to educators to encourage broadband adoption and enhance digital citizenship among the nation’s youth.

We’ll be continuing our efforts to encourage adoption and will also continue to engage in discussions with government policymakers and private sector partners to identify new ideas that will substantially advance our common goals.

The Chairman highlighted the economic force that broadband has become in the American economy, especially as a technology that powers job creation, and he cited a recent report by McKinsey which shows that broadband now creates 2.6 jobs for every one lost.

As cable was America’s first broadband provider, I welcome the Chairman’s remarks and enthusiasm about how broadband is sparking a renaissance in America’s economy.  But the irony of the entire speech is that not a single broadband company was even mentioned nor did we hear about the millions of jobs created by broadband providers which have built the networks that are the “indispensible infrastructure for America in the 21st Century.”

Sure, it’s to more fun talk about garage start-ups or cake delivery success stories, but let’s not forget who brought us to the dance.  Broadband is not some mystical force of nature. Broadband is the result of hard work and private investment, first from the cable industry and now many others.

The cable industry launched residential broadband service in the late 1990s and after $170 billion in construction and network upgrades, our broadband service is available to 93 percent of U.S. households – more than 123 million homes.  Cable’s broadband networks offer speeds of 5 Mbps or faster to more than 90 percent of U.S. households. Cable is also now providing next-generation wideband service, with speeds of 50 Mbps or more (in some cases, over 100 Mbps) to more than 90 million American homes.

Currently, 45 million customers rely on cable for their broadband Internet connections. As Chairman Genachowski notes, those broadband connections have become indispensible.

I know it’s been 15 years, but it’s important to remember that it was cable that brought broadband to life and gave birth to everything we delight in today.

But we also help impact the economy. Just this past March, we released the latest study by Bortz Media and Sports Group, Inc. on the economic impact of the cable industry. The study found that the U.S. cable industry supports nearly 1.8 million jobs representing gross economic output amounting to more than $251 billion.

Since 2002, direct and indirect employment attributable to the cable industry has increased by 638,000 jobs.  The industry added 4,700 jobs over the last three years at a time when the U.S. economy’s net loss of jobs was more than seven million.

We deployed broadband first; we offer some of the fastest speeds in the marketplace; we help keep American employed. When you think of the economic impact of broadband, don’t forget the critical role that cable has played.

I applaud Gary for speaking his mind, but feel a need to call his bluff.  Because while he is vehemently condemning some 200-plus new regulations that would cost industry hundreds of millions of dollars if implemented, Gary and CEA are leading an effort to push the FCC to adopt new regulations that would impose substantial costs on cable and other video providers, and that would have the very government bureaucrats that he so disdains set technical standards on a marketplace that is exploding with innovation.

And yes, I’m referring to the “AllVid” proceeding that has been hanging, like Damocles’ sword, over the industry for more than a year.  If implemented as Gary and CEA would like, an All Vid mandate would force video providers (job-producing business owners) to break up their services in a manner that would strip away valuable (and popular) content and allow competitors to pick and choose which pieces they want.  Such regulation would not only rip apart the fabric of a market that 100 million consumers participate in, it would also drive up costs in an economic era when consumers are already feeling pinched.

And why do we need these rules?  Video providers and services are already bringing new and innovative services to market – from streaming live TV to iPads, enabling consumers to watch video on multiple devices in and out of the home and delivering video straight to “smart” TVs without needing a set-top box – without government mandates.

The AllVid proceeding is the classic example of the jobs-killing, cost-raising, innovation-crushing regulation that Gary blasts as anti-business.   He should be true to his principles and walk away, and the FCC should shut down the proceeding and let the market continue working.

The Universal Service Fund (USF) is not a direct expenditure by the government, but the FCC does determine how much money is collected and how it is distributed to further the goal of ubiquitous and affordable communications service.  Like any other federal program, the Commission has a responsibility to ensure the Universal Service program does not balloon, but instead is prudently and effectively restrained.

For at least a decade, policymakers have agreed that our system of subsidizing the operation and maintenance of rural communications networks is in critical need of reform.  Our current support mechanisms – USF and intercarrier compensation (ICC) – were first established decades ago to ensure that every American had access to basic telephone service.  That national priority has long been met, but these programs still chug along propelled by past history rather than the facts of today’s reality – rewarding legacy telephone companies with financial support even where such companies face competitors who enjoy no such subsidies.

Chairman Genachowski deserves credit for identifying USF and ICC as ripe for reform and for setting an aggressive timeframe for transforming these programs into ones that can help accomplish our nation’s telecommunications goals of tomorrow while limiting further taxpayer exposure.  When completed this initiative will be a tall achievement that deservedly will burnish his legacy, but only if the Commission is courageous enough to put this bloated program on a budget.

The People’s Money Should Be Spent Wisely

Limiting the growth of USF is important for one reason above all; consumers, not companies, ultimately pay for subsidizing this program. Hearty portions of a consumer’s monthly telecommunications bill are charges that go to support USF.  Just pull out your next bill and take a look.  If the Commission fails to meaningfully constrain the USF program, consumers will inevitably see their bills rise.  In these depressed economic times, government should do everything it can to limit the economic burden of government programs on consumers, even programs that serve worthy goals, as does USF.

To his credit, Chairman Genachowski has committed that the Commission will reform USF without increasing the burden on consumers.  We fully agree with his strategy to phase out the old, inefficient programs and introduce a regime that will be more carefully targeted to the few areas of the country where marketplace forces have been insufficient to attract investments in broadband.  His three fellow Commissioners deserve credit for joining the Chairman to establish a “fiscally responsible path that provides incentives for efficient operations and accountability for every dollar spent” and “contains the size of the Universal Service Fund.” (Comments taken from this post from last month on the FCC blog.)

As the Commission moves toward a vote on USF reform later this year, we call on the Chairman and the Commissioners to maintain their pledge of fiscal discipline.  In particular, as noted in a letter that NCTA and ACA recently submitted to the FCC, the Commission should establish constraints on the size of the high-cost program that are enforceable and not merely aspirational.  The goal of universal broadband access can be achieved without placing additional burdens on American consumers, but achieving that result will only be possible if the Commission establishes clear, enforceable limits on how much money it will collect and distribute.

Based on a rigorous testing process, the Commission found that, on average, during peak periods (7:00 – 11:00 p.m. local time), cable-based services delivered 93 percent of advertised download speeds and 108 percent of advertised upload speeds.  When off-peak performance is included as well, many of the cable operators in the test delivered more than 100 percent of the advertised download speed and the majority delivered more than 100 percent of advertised upload speeds.  To the extent the National Broadband Plan suggested there might be a significant gap between actual and advertised speeds, the report dispels those concerns and makes clear that “actual download speeds are substantially closer to advertised speeds” than was asserted previously.

The positive results reported by the Commission reflect the cable industry’s long track record of network investment and innovation and our focus on providing services that are attractive to consumers.  As with Commission surveys showing extremely high consumer satisfaction levels, the results of the SamKnows testing confirm that marketplace forces are working for the benefit of consumers.

The testing also demonstrates the significant consumer benefits associated with PowerBoost technology, which is used by many cable operators.  PowerBoost enables consumers to receive bursts of additional throughput when there is excess capacity in the network.  As the Commission’s report demonstrates, PowerBoost increased download performance by as much as 52 percent during peak periods for some offerings.

Beyond the substantive importance of the results, the SamKnows testing is equally important for the procedural lessons it teaches.  The Commission faced a challenging task in developing a testing mechanism that could accurately measure the performance of different types of ISP networks.   To the Commission’s credit, it recognized that the best way to develop such a process would be to work in a collaborative manner with the ISPs whose networks were being tested, as well as academics, equipment manufacturers, consumer groups and others.  We appreciate the hard work and dedication of the Commission staff throughout this process.

It is important to keep today’s report in perspective.  The test involved only a small fraction of the ISPs operating in the United States (and only covered wireline providers), each ISP had only a small number of test panelists, and the report covers only one month of performance data.  Further analysis of the data is needed to ensure that the testing process fairly and accurately measured the performance of each ISP.   We look forward to reviewing the report in more detail and continuing to work with the Commission staff and other interested parties on these issues.

According to Kornbluh and Weitzner, the Internet is such a powerful engine of economic and social advancement because no centralized authority governs it and no nation owns it – which “means that nations that choose to take a heavy-handed approach to regulating the Internet can reduce its value for every other nation and user.”

In particular, Kornbluh and Weitzner argue that “[t]he first threat is posed by some governments and international institutions intent on imposing pre-Internet-era telecommunications regulatory schemes to provide them control over the flow of information (and money) they enjoyed in the old days of the monopoly phone company.”

We couldn’t agree more.  In this country, the FCC opened a docket to examine whether broadband Internet access service should be reclassified as a pre-Internet-era common carrier service under Title II of the Communications Act.  NCTA and others pointed out that imposing a top-down Depression-era regulatory structure on modern broadband facilities would not only be unlawful but would depress broadband investment and job-producing economic growth at the worst possible time.

Fortunately, the FCC declined to reclassify broadband Internet access service in its Open Internet Order.  Unfortunately, the reclassification docket was expressly left open.

If we want other nations to reject the idea of imposing old-style regulatory structures on the Internet, there’s no place to start like home.  It’s time for the FCC to close the Title II reclassification docket.  That would prevent a future Commission from turning back the clock, and send a clear message to the rest of the world.

To be more technical about it, as industry observer Leslie Ellis put it:

…we’re moving to a world where stuff can be done without set-top boxes, at least as they exist in hardware. Now, it’s set-tops; next, it’s gateways that bridge between set-tops and cable modems, and ultimately, it’s video delivered completely over IP, from the network, to the end devices.

I bring this up because NCTA’s President and CEO Michael Powell sent a letter last week to FCC Chairman Julius Genachowski about these new developments and what they mean for our ability to achieve a fully competitive and innovative retail video device marketplace.

This issue has been discussed for some time, but 2011 has brought a host of services entering the marketplace.  See some of our previous posts:

• Consumers Reaping Benefits of Smart Video Device Revolution
• Connected TV… Here to Stay

All of that was before The Cable Show. As Michael Powell’s letter pointed out, the various demos and panels from our event help show how the cable industry “is providing American consumers with powerful, personal, and portable services and networks that support unprecedented mobility of content to multiple devices both in and out of the home.”

The Cable Show demonstrated that Congress’s and the Commission’s video device goals are already being achieved in the marketplace.  …there is broad-based momentum in the cable industry to deliver cable services to consumers on any device.

Today, consumers have more sources of video programming and content on more devices than ever before, and the choices are only growing through a variety of market-based approaches: smart TVs, iPads and other tablets, TV from the “cloud,” set-top boxes that can combine TV with Internet content, the growing role of home networking and connected devices. All of these approaches are playing a role.

As quoted in this write-up in Multichannel News, NCTA is suggesting that regulatory efforts intended to encourage innovation may instead impede.

“The problem that remains in this marketplace is not the need for a single guiding regulatory prescription,” like the FCC’s proposed AllVid solution, wrote Powell. “The marketplace is at a critical juncture, inviting participants to make major bets and even more major investments in technology to meet rapidly developing consumer demand with rapidly changing technological tools. This kind of innovation is about risk taking. The environment that invites the greatest risk taking is one with the certainty that regulators will not step in and displace new technologies or new investments.”

FOOTNOTE: There was a lot of activity at The Cable Show along these lines, but you get a taste of what’s happening in this area, watch some videos from The Park, such as the demos from Comcast, Cablevision and HBO.

In the Section 706 Report, Congress requires the Commission to “determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.”  In the first five reports, the Commission found that deployment was reasonable and timely.  Last year, however, in the Sixth 706 Report, the Commission for the first time made a negative finding.

What happened in that fateful year?  Nothing materially different from the year before, except that the Commission moved the goal posts – instead of conducting a year-over-year assessment of our relative progress, the Commission found that progress was not “reasonable and timely” because 100% of Americans do not yet have access to broadband.

We have no quarrel with the Commission’s laudable sentiment, but as we noted at the time, that aspirational goal is not the litmus test Congress envisioned within the 706 inquiry.  Indeed, we are yet to reach this level of success for far older technologies like electricity and phone service, and in other contexts the Commission has plainly acknowledged that delivering wired broadband service to the last 2-3 percent of homes is so expensive as to be untenable, even with government subsidies.

Unfortunately, recent press reports indicate that the Commission is again considering a negative finding in its upcoming Seventh 706 Report. From NCTA’s perspective, the news on the deployment front continues to be extremely positive.  On the cable side, Comcast’s recent announcement that it is offering 105 Mbps service to 40 million homes is just the latest in a series of announcements from cable operators over the last year that support the view that investment is continuing and that deployment of the latest technologies is growing.  At year-end 2010, next generation speeds of 50 Mbps or faster were offered to more than 80 million homes by cable operators, and robust current generation cable broadband was available to more than 123 million housing units.

To the extent the Commission’s conclusion relies on data collected in connection with the National Broadband Map, it is widely acknowledged that the initial version of the map almost certainly understates broadband availability in the U.S. Notwithstanding these problems, the map shows overall broadband availability at roughly 95 percent and, as some observers have suggested, the actual figure may be as high as 97 percent.

Consequently, while improvements to future versions of the map offer the prospect of a more definitive source of availability data, the map should be viewed as a supplemental source for the current 706 inquiry that bolsters, rather than undermines, a conclusion of reasonably and timely deployment.

Indeed, far from lagging the world, the United States continues to lead, and for the second year running ranks 5th in the World Economic Forum’s Networked Readiness Index – a measure used over the last decade to gauge the degree to which developed and developing countries across the world leverage information and communication technologies (ICT) for enhanced competitiveness.

Although we may have to “agree to disagree” with the Commission about what qualifies as “reasonable and timely” broadband deployment, we are in complete agreement on the best strategy for moving closer to our shared goal of universal broadband availability.

In last year’s 706 report, the Commission identified certain key recommendations from the National Broadband Plan as critical to promoting investment and accelerating deployment, including pole attachment reform and USF reform.  NCTA has fully supported these recommendations.

With respect to the former, the Commission has done yeoman’s work recently in adopting strong pole attachment rules.  With respect to the latter, the Commission has rightly teed up critical reforms that are needed to update our existing subsidy system to better reflect the realities of today’s competitive communications marketplace, including proposals to target subsidies for broadband deployment to unserved areas.

While such changes do not offer a guarantee of reaching all Americans with broadband, they do offer the prospect of tangible progress that we should all agree is worthy of positive recognition.