On Friday morning, Tom Tauke took to Verizon’s blog to post thoughts on the rumored FCC decision reversing the bureau’s suggested dismissal of cable’s complaint about the telco’s “retention marketing”.  NCTA President Kyle McSlarrow drafted a response here and on Verizon’s blog.  The back and forth went on late into the night with Kyle posting his final word after 8pm.

Due to the relatively unprecedented nature of this direct, and public, debate between major industry players, a lot of people took notice.

Sidecut Reports called it a tussle that only telecom policy wonks could love.

Maybe it’s a tussle that only telecom policy wonks could love, but if you are at all involved in the regulatory sphere you’ve just got to love that the battle of the corporate titans has now moved, Web 2.0 style, into the blogosphere, with Verizon and the Cable companies now using blogs to take pokes at each other…  If you are really interested in the argument, follow the links and join the conversation. We are going to spend the rest of the day worrying whether or not direct competitor blogging means that pundits are out of a job — again!

From the Technology Liberation Front:

Verizon’s Tom Tauke and NCTA’s Kyle McSlarrow take to fisticuffs in their comments (well worth reading and remarkably… candid) on the Verizon Policy Blog after Tom asked “Will Cable and FCC Thwart Consumer Choice?”

Dave Zatz at Zatz Not Funny writes:

In the talking typing heads policy battle currently raging across the blogosphere, I hereby declare the NCTA as winner. I actually have very little interest or knowledge of the topic at hand, however there can be only one… and Verizon’s lobbyist is still ending sentences with two spaces, while Cable’s lobbyist linked his rival’s blog. (Bonus 1/2 point to Cable for using WordPress, though they haven’t upgraded to 2.5.* yet.)

Perhaps the most salient point, and possibly the briefest, was made by Insight Communications CEO (and NCTA Executive Committee Member) Michael Willner (a blogger himself) after Tom and Kyle suggested taking the debate offline.

NO! Resist going back to the old Washington ways!! Don’t settle this in a beltway gin mill. This is the 21st Century and we all want a front row seat!!

We wouldn’t consider it.  When Kyle launched this blog, he spelled out its purpose clearly.

But we didn’t start this blog just to tell you all that. We launched this blog to talk about telecom policy. Today’s vibrant public policy discussions are driven by conversation and debate taking place online, so we hope this blog will contribute to that dialogue. We’ll be talking about proposed legislation and regulation at the federal, state, and local level. We’ll voice our support for changes that would lead to a better, more competitive technology landscape. When we think legislation is unnecessary or detrimental, we’ll talk about that, too. And, while we will certainly express our views, our goal is to have a dialogue… So, we’ll… invite people with whom we may not agree to engage in debates across their blogs and ours. We’re looking to cross post ongoing exchanges in an effort to provide you with the kind of information that helps you decide for yourself.

This was obviously an example of that, but this is only one salvo in a much broader and ongoing discussion and debate over telecom issues.  Keep your eyes peeled, there’s more to come.

(On two sidenotes, you can find NCTA’s statement on the FCC Decision here.  A sidenote to Dave Zatz: We’re big fans of WordPress, but haven’t upgraded due to a dependency on one plug-in that hasn’t yet upgraded.  Hopefully we’ll find a 2.5 compatible plug-in soon.  I’m working on it.)

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The Subcommittee on Telecommunications and the Internet will hold a hearing tomorrow, May 6, at 9:30 a.m to cover “H.R. 5353, the Internet Freedom Preservation Act of 2008.” Witnesses will discuss the proposed legislation, which would direct the Federal Communications Commission (FCC) to assess competition, consumer protection, and consumer choice issues relating to broadband Internet access services, including network neutrality. The bill was introduced by Reps. Edward Markey (D-MA), Chairman of the Subcommittee on Telecommunications and the Internet, and Chip Pickering (R-MS).

NCTA’s Kyle McSlarrow will testify as will Mitch Bainwol of RIAA, Walter McCormick of US Telecom, and several others. Look for Kyle to make many of the same points he made in testimony before the Senate Commerce Committee on April 22, and in his post on network management here.

The efforts of broadband network providers to build larger and faster networks have helped ensure the success of countless numbers of new Internet businesses and applications. Despite concerns about alleged limited access to broadband, use of Internet video on demand has grown at the most dramatic rate. In February 2008, nearly 135 million U.S. Internet users spent an average of 204 minutes viewing 10.1 billion online videos. YouTube represented 34% of those online videos, or nearly 3.5 billion.

For years, net neutrality proponents have argued that without government intervention, broadband providers would stifle competing services and content providers; Internet development and usage would stagnate; and consumers would be unable to use their broadband connections to download video or access other emerging applications. In fact, cable’s investment in broadband has driven innovation and investment in new content and applications at the edge — the exact opposite of what was predicted by advocates of net regulation. …

Far from being “neutral,” a network that is not managed simply allows those who want to demand all the bandwidth for themselves to do so unchecked. …

Under the guise of preventing discrimination, “net neutrality” proponents would have the government determine which network management techniques are permissible. Putting every network management strategy up for debate before regulators would severely hamper the ability of network providers to ensure high-quality and reliable Internet access for their subscribers. Depriving network operators of certain bandwidth management tools only makes the network less efficient for everyone. Adept network optimization techniques are fundamental to creating and preserving the stable “ecosystem” for online service providers that ensures an optimal customer experience.

Misplaced concerns over legitimate and reasonable network management practices do not justify the enactment of open-ended regulation of the Internet, particularly where the costs of such regulation are foreseeable and substantial. Given the growth of broadband competition and the breathtaking pace of technological change, government intervention is unwarranted. As the Federal Trade Commission has warned, regulation of Internet access at this stage of market development could have “potentially adverse and unintended effects,” including reduced product and service innovation.

Congress should resist calls to interfere with broadband providers’ freedom to manage their respective networks in order to satisfy the evolving needs of American consumers. The disaster scenarios voiced by network neutrality proponents for many years have never happened. In fact, the opposite has happened — the Internet is booming without regulation. There is quite simply no problem requiring a government solution.

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NCTA’s CEO Kyle McSlarrow was featured on Ad Age Magazine’s online video series 3 Minute Ad Age earlier this week.  McSlarrow recently addressed the Association of Cable Communicators (ACC) - the industry’s association for public releations practitioners.  In a conversation with cable consultant Steve Effros, McSlarrow raised, among other things, the relative lack of discussion about broadband policy among the Presidential candidates and the status of the DTV transition.

ACC will be posting the full discussion soon.  Until then, Ad Age has the video.

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NCTA today filed comments at the FCC in the “Broadband Industry Practices” proceeding in opposition to two petitions (from Free Press and Vuze) requesting that the Commission enact new regulation that would restrict the ability of broadband service providers to manage their networks to provide a better customer experience.

To quote from NCTA’s media release:

With the FCC’s 2005 adoption of a Policy Statement concerning broadband service, NCTA said that the Commission has already taken the correct approach – one of vigilant restraint – to ensure that the rapidly changing marketplace for broadband services develops in a way that best meets the needs of consumers. Importantly, the Commission’s 2005 Policy Statement expressly recognized that its broadband principles were “subject to reasonable network management,” NCTA said.

These seem to be the two key phrases: vigilant restraint and reasonable network management. In other words, broadband Internet services have evolved over time, responding to marketplace needs, and for the FCC to impose regulations would be, as the filing says, “likely to do more harm than good.” Further, network management “makes it possible to offer consumers access to the broadest possible array of services, sites and applications.”

The issue of network management has arisen with the growth of peer-to-peer services which are designed not only to download large files for long periods of time but also make their computers available as servers that constantly upload files for use by others. The use of peer-to-peer services by only a small fraction of Internet customers can consume a very large portion of the network’s resources and capacity which can interfere with the use and enjoyment of the Internet by other customers. So, without reasonable network management techniques, heavy usage of peer-to-peer services can degrade the overall speed of Internet access for all customers.

The filing enumerates some of the key points behind this approach:

• Not all applications use bandwidth in the same way.
• Content agnostic management of a network is not “censorship” or an anticompetitive technique to harm other services.
• Approaches to managing networks are best decided by network providers, rather than by the government.

This discussion reminds me of a point made in a Washington Post editorial almost two years ago:

If you want innovation on the Internet, you need better pipes: ones that are faster, less susceptible to hackers and spammers, or smarter in ways that nobody has yet thought of. The lack of incentives for pipe innovation is more pressing than the lack of incentives to create new Web services.

Today’s filing concludes by pointing out that there are a number of open questions about the best way to improve consumers’ experience of the Internet. Regulation would only put up a roadblock on the path to figuring out the right approaches.

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Right on the front page of NCTA’s website, down in the lower right corner, we run a little feature called “Statistic of the Week.” Since cable prices are always a hot topic, and since I’ve made some reference to the notions of price and value, I thought I’d highlight what we’ve run recently.

This week it was:

Cable’s PPVH decreased by 3.3% on a nominal basis between 2001 and 2006 and 15.4% on a real, or inflation -adjusted basis

And this was footnoted as follows:

[PPVH = Price Per Viewing Hour = the price of a cable subscription divided by the number of hours per month spent viewing basic cable networks]

Source: Average basic cable rates from SNL Kagan divided by average basic cable network viewing time from CAB

Fine. What the heck does this mean? It means that how much you watch cable television ought to be factored into price and value. Any discussion of cable prices ought to be put in context. NCTA doesn’t think that the nominal price is the most accurate measurement. It’s not like a loaf of bread or a carton of milk; over time the service that cable offers to customers changes and the way people use that service changes.

The FCC is quick to point out that the price per minute (which is a quantity-adjusted metric much like PPVH, the price paid divided by the amount consumed) of wireless service has been declining, yet the Commission fails to acknowledge or discuss PPVH. Consumers are paying more for wireless service and they are paying more for cable service, but they are also consuming (talking/viewing) more of both services too. They must be finding value and quality in each of these services.

As I mentioned in my first post, I’ve been a cable customer for most of my life. I pay more today than my parents paid back in the early Seventies. But I get a lot more channels, the programming is more diverse and is of a higher quality and I now spend more of my time tuned to more cable networks than I used to.

We sent a letter to the FCC a year ago. In it, NCTA’s President & CEO Kyle McSlarrow noted that today’s marketplace is quite dynamic and there are better ways to measure price:

Although it’s short-sighted to focus on video pricing alone, there are more obvious ways to measure prices that actually stand up to scrutiny. It is useful for consumers and policymakers to know whether price increases are or are not accompanied by corresponding increases in the quantity and quality of the service or goods being sold. That’s why it is important to analyze prices not only on an inflation-adjusted basis but also on a quality-adjusted basis.

One way is to simply measure the price per channel as the FCC has done for some time. And the data clearly show that the real price per channel over ten years has gone down, not up.

He also talks about PPVH and you can read the whole thing for yourself. I’d also recommend looking at this study by Professor Steven S. Wildman of Michigan State University. He argued that the “real (inflation-adjusted) price of cable service divided by the number of hours spent watching basic cable programming” was a good way of measuring prices. If you pay 10 bucks for service and watch 10 hours, then you paid a buck an hour. If you pay 20 bucks and watch 60 hours, then you paid 33 cents an hour.

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On Tuesday, NCTA filed a Petition for Stay pending its appeal of an order of the FCC entitled Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real Estate Developments.

As described in the Multichannel News article by Ted Hearn:

NCTA sought a stay in the U.S. Court of Appeals for the D.C. Circuit on one key issue: the FCC’s decision to apply the ban to existing contracts, not just to future deals, between cable operators and the owners of multiple dwelling units (MDUs.).

You can find NCTA’s filing on our website. There’s another article on this action at Light Reading. And you can read the Oct. 29 article in the NY Times that kicked this whole thing off: F.C.C. Set to End Sole Cable Deals for Apartments.

UPDATE: Apartment owners appeal FCC decision banning exclusive cable contracts.

Now the National Multi Housing Council and National Apartment Association who represent the owners of many of these buildings are challenging the ruling in the U.S. District Court of Appeals’ District of Columbia division. The complaint alleges that the ruling exceeds FCC authority and is “arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence.”

And a Dow Jones story on NCTA’s filing as well.

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Welcome to CableTechTalk.com, the new blog of the National Cable & Telecommunications Association (NCTA). We are the primary trade association of the cable television industry in the United States, representing cable operators serving more than 90 percent of the nation’s cable television households and more than 200 cable program networks, as well as equipment suppliers and providers of other services to the cable industry.

Our industry is at the forefront of technology change. Cable operators have spent more than $110 billion since 1996 to build a robust network for delivering voice, video and data services to our customers. We’ve dramatically increased the amount of video programming available, saved consumers hundreds of millions of dollars through telephone choice, and driven the deployment of high speed Internet – leading to a sea change in the way we interact with the world around us.

But we didn’t start this blog just to tell you all that. We launched this blog to talk about telecom policy. Today’s vibrant public policy discussions are driven by conversation and debate taking place online, so we hope this blog will contribute to that dialogue.

We’ll be talking about proposed legislation and regulation at the federal, state, and local level. We’ll voice our support for changes that would lead to a better, more competitive technology landscape. When we think legislation is unnecessary or detrimental, we’ll talk about that, too.

And, while we will certainly express our views, our goal is to have a dialogue. So, we’ll be inviting the people who make cable work – from our chief technology officers to the technical executives that manage our industry’s research & development arm, CableLabs – to talk about the management of large scale networks and the effect that changes in regulation would have on the customer’s experience. And we’ll also invite people with whom we may not agree to engage in debates across their blogs and ours. We’re looking to cross post ongoing exchanges in an effort to provide you with the kind of information that helps you decide for yourself.

We’ll make our best efforts to use this medium in a way that is familiar to you and other bloggers and blog readers. We’d like to talk with you, not at you. We want to provide you with information, but we hope you will do the same in return. We’ve opened up the comments so you can give us feedback and share your thoughts.

We’ll also talk about the stuff that makes life fun. We’ll take a look at the newest gadgets and tech toys – the consumer electronics that benefit from and leverage cable’s platform. To that end, we’re kicking things off with a week of blogging from the Consumer Electronics Show in Las Vegas. Our two bloggers-in-chief (more on them in a moment) will bring you the latest in home and personal electronics direct from the show floor. They’ll take you behind the scenes at the biggest electronics show on earth, and give you a peak at what’s cool and new, from their perspective inside the cable industry.

Our two resident bloggers are Paul Rodriguez and Michael Turk (Here are their bios). In addition to being NCTA employees, they’re avid bloggers and blog readers themselves. And they’re looking forward to talking with you in the days and months ahead.

But as I said, they won’t be the only voices you’ll hear. This blog will have dozens of authors, all with unique perspectives.

So, thanks for visiting, and come back often.

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