There’s a video of Louis C.K. that’s been floating around the Internet for the past two years called “Everything’s Amazing and Nobody’s Happy.” In an appearance on Late Night with Conan O’Brien, the comedian observed that despite our technological advances, people still like to complain.

I think about this when I hear people complain bitterly that the U.S. is dangerously behind on broadband – there’s not enough broadband available, it’s too slow, it’s too expensive. Nobody can get online!

Of course, we have to ensure that as many Americans as possible have access to the Internet. Read this February post from Kyle McSlarrow or this one from James Assey in March. The cable industry has deployed broadband to 92% of American households. We continue to regularly increase broadband speeds and we’re rolling out wideband service based on the DOCSIS 3.0 standard (now reaching 65+ million homes). We proposed the Adoption Plus program to bring broadband to lower income households.

This is a time when:

• 95% of U.S. households have availability to Internet access with speeds of 4 Mbps or more
• 82% of HHs can choose from two or more wireline platforms
• More than 90% can choose from several 3G mobile options

Internet access is important. We can and should do more to get Americans connected. But are we really so bad off?

I Don’t Think We’ve Surrendered to Sweden.

Last month, we blogged about how high consumer satisfaction is with their current Internet connections, but all you’ll hear is about how slow our connections are.  Surveys show that an increasing number of people are using mobile devices to access the Web, but some wouldn’t count those consumers when measuring “broadband.”

Adam Theirer pointed out last year that the speed of adoption for Internet access is far faster than other technology developments (See this Pew report). With three-quarters of Americans currently using the Internet, adoption hit 50% in a decade, ahead of multichannel video (35 years), wireless phones (20 years), home computers (20 years), telephone and electricity (50+ years). Are we crawling along or well ahead of schedule?

Nokia Siemens Networks’ annual broadband development index, the Connectivity Scorecard, just came out and it showed that the U.S. just lost the #1 slot to Sweden. Sweden is beating us!

Of course, Sweden’s population is 3% of the U.S. population; it’s 4.57% of our land mass; the Swedish government owns 37% of the incumbent telecom provider (TeliaSonora) and the Finnish government owns another 13%, making the incumbent half-owned by the government.  Still, look at how bad we have it.

It’s not like I can buy a little device for a couple hundred dollars that I can carry around in my pocket and access most of the Internet, anytime and anywhere. It’s not like I can watch one of thousands of movies 24 hours day by firing up my Wii to reach the Netflix library or by tuning to my VOD service. It’s not like I can get on an airplane and fly across the country while surfing the Web.

Oh, wait. Yes, I can.

[NOTE: I should probably mention Louis C.K.'s terrific FX show Louie. And check out George Ou's debunking of the Berkman study – a key tool used to "prove" how the U.S. is behind – here and here.]

As I mentioned in my previous post, the cable industry has deployed switched digital video (SDV) as a means of conserving bandwidth, allowing us to provide better and more services to our customers.  As the FCC examines the future of set-top boxes and the current CableCARD regime, TiVo has raised a question about whether the Tuning Adapter (which it helped develop) is a satisfactory approach to enable consumers with TiVo one-way devices to access cable programming delivered via SDV.

We’ve already responded via filings of our own  – making the points that Tuning Adapters are generally working and the TiVo proposed “fix” doesn’t withstand scrutiny  – but I wanted to take some time to explain where we think TiVo gets it wrong. (Coverage of this battle of filings can be found at Multichannel News and Light Reading.)

Read the rest of this entry »

Several major cable operators are making new deployments of switched digital video – see here and here – which provides a timely opportunity to explain how SDV works and how consumers will benefit.

Standard cable service, both analog and digital, works on a “broadcast” model, in which every available channel is sent to every subscriber all of the time, regardless of what is actually being watched. Sending more channels than you’re actually watching just takes up more of the capacity on the cable pipe – capacity that could be used for other important purposes.

As this article succinctly puts it:

One of the primary benefits of SDV is that it frees up bandwidth because it only delivers the channel a customer is viewing.

Read the rest of this entry »

We return to the topic of “cord-cutting,” thanks to a few recent developments.

Before we start, it’s worth noting that much of the cord-cutting coverage I see online seems to begin with frustration at prices (somehow never compared to the costs of other entertainment options) or by desired flexibility in purchasing options (they just want to get the one network or the one show).

Then, the subsequent reporting or blogging is driven by a fierce conviction that the Internet and the Digital Age is changing the “cable model” – as everything must be changed under the new regime (“Resistance is futile!”) – and that it’s only a matter of time before the whole existing infrastructure comes tumbling down, to be replaced by a Bright New Tomorrow.

I must point out that the Internet offers a technical solution to delivery of content. It does not address the business models involving the production of content.

Everybody’s Dropping Cable and Its Days Are Numbered

“It’s only a matter of time,” critics will say. Pretty soon, a Hulu subscription will “kill your cable.” Or perhaps Google has the answer to “kill your cable bill.” In fact, it’s already happening now! The cord-cutters are taking over!

Just as a brief sample of cord-cutting claims, here’s Fierce IPTV from April and the L.A. Times from eight months ago.

About a month ago, I fact-checked two major cord-cutting reports from earlier in the year. Now, a new Nielsen report confirms that “cord cutting to date has been limited to very specific demographic segments.” See this finding from the report, as quoted by Connected Planet:

The survey’s key metric: 3.9% of the U.S. population had broadband Internet but no cable TV service in January 2010. That’s the same percentage reported for the same month a year earlier. In January 2008, it sat at 3.2%.

At the same time, the percentage of people with both cable TV service and broadband was 66.3% in January of this year, compared to 61.6% in January 2009 and 54.8% in January 2008.

But maybe there’s another threat to cable.

Drop Cable and Still Get Sports

About a week ago, ESPN and Microsoft accounted a deal that would bring the ESPN3 online service to Xbox 360 customers. There was much rejoicing in certain quarters, with MG Siegler writing at TechCrunch, “Xbox 360 Gets Live Sports In HD From ESPN. Canceling My Cable In 5, 4, 3…” Two days later, Karl Bode noted at DSLReports, “ESPN/Xbox 360 Deal Less Sexy Upon Closer Inspection.” He noticed that ESPN’s streaming video service has a model similar to its multichannel video business. ISPs are affiliates, much as cable operators are. And ESPN3 doesn’t offer all the same content that the television version does. (Also, see this post from the Sonic.net CEO Blog, arguing that “the Internet is ‘à la carte’, and it should remain that way.”)

So, I Should Still Cancel Cable, Right?

People like to complain. They threaten to cancel their service. But if you like to watch the programming, how else are you going to watch it?

CNET’s Rick Broida writes The Cheapskate column about saving money. He posed the question this week, “Is it time to pull the plug on cable TV?” He notes that you can use streaming services or a media center PC.

However, these options will get me only so far. If I want to watch shows like “Breaking Bad” or “Mad Men,” I’m sunk: they don’t air anywhere except on AMC. My only option would be to wait for them to come out on DVD. And even then, they won’t be high-def.

I also have kids who would probably require hospitalization without daily doses of “iCarly” and “Phineas and Ferb.” Granted, both are available through Netflix, but not the latest episodes.

And then there’s sports. I don’t watch a ton, but I do like my college basketball. The question is, do I like it enough to justify $70/month (especially when the season lasts only six months or so)? Dunno.

If You Want a Revolution, What’s the Solution?

As I’ve said before (see this post), people like to claim you can replace cable with something else, but the “something else” is often just broadcast programming streamed online.

Broadcast television has been around since the 1940’s and has a business model based on broad distribution; the free online viewing of those shows is just ancillary revenue. Cable has always offered niche content and has a dual revenue stream of advertising and affiliate fees.

Cable and other multichannel video providers are now responding to consumers’ interest in accessing cable content in new ways; that’s why we’ve seen the launch of “TV Everywhere” kinds of services, which allow subscribers to watch online the content they’re already paying for.

All those prognosticators who claimed that the cable model is doomed should try to answer the fundamental questions of how the television business is supposed to transition into this Bright New Tomorrow, while still maintaining the ability to recover production costs and generate revenue.

While the enormous growth and progress of U.S. broadband over the last decade continues to be under-appreciated by some in Washington, real consumers who use the service everyday continue to express their satisfaction with their service.

The latest data comes via a report from Leichtman Research Group, finding that, “71% of US broadband Internet subscribers are very satisfied with their current Internet service at home.”  On top of that, the report says people are even pleased with the speed of their Internet connection.

If this sounds familiar, the FCC’s own broadband study which we covered here a few weeks ago that said 91% of home broadband users report being at least somewhat satisfied with the speed of their service (with 50% saying they are very satisfied).  Also similar to the FCC’s survey, the Leichtman research notes, “77% of broadband subscribers do not know the download speed of their Internet service at home.”

This last data point raises an interesting question – If consumers are satisfied with their broadband service and it performs the functions they want, is it important to know the exact speed of your home broadband service?

The Institute for Policy Innovation recently tackled this question and raised some interesting analogies:

Can most people rattle off the horsepower of their car or their lawnmower? Can most people even tell you what “horsepower” means? (Horsepower is a measurement of work over time. Move 33,000 pounds one foot in a minute and that is one horsepower). What about their furnace? Can they opine on how many BTUs it produces? (BTU stands for British thermal unit. Heat one pound of 60 degree water by one degree at a pressure equal to one atmosphere and you have one BTU).

I am guessing that people are satisfied with their service because it consistently works, it consistently zips along at a pace that accomplishes what the user is trying to do, and it consistently helps them with school, business and entertainment activities.

It is great news that most consumers are satisfied with their Internet service, but cable is continuing to invest so we can offer even faster Internet speeds and a variety of tiers for consumers to choose the service that best meets their needs.

Cable operators have invested more than $160 billion over the last decade in infrastructure upgrades, maintenance and equipment, but more is happening everyday.  And many cable operators are increasing speeds for customers, often without increasing price.

Ultra-fast Internet – or DOCSIS 3.0 as we know it – was deployed to 52 million homes and business around the country, or 43% of cable’s national footprint, by February 2010.  Offering speeds from 50 to 100Mbps, DOCSIS 3.0 is providing cutting edge services for many homes and businesses now, and well into the future.

The reason why we continue to invest in our network and increase the speeds we’re delivering is to ensure this satisfaction continues.