Today we are announcing the next step in our industry’s longstanding commitment to use our technologies to improve education in America. We’re proposing a two-year public-private pilot program called Adoption Plus (A+) which could bring broadband to millions of children in low-income households.

Twenty years ago, our industry founded Cable in the Classroom (CIC), which over the past decade has brought free broadband service to thousands of schools and community libraries.

In recent years, our industry has also focused on the digital divide and how to promote broadband adoption.  Cox Communications, for example, has participated in a widely praised program in Santa Barbara, California, in which it provides discounted broadband service to children who participate in the National School Lunch program, together with partners who provide discounted or free computers.

Even though broadband is available to more than 90% of the households in the United States, almost one-third of those households don’t take the service.  Why?  Well, recent studies by the Pew Research Center demonstrate there is no single reason, and some of the multiple reasons – such as understanding the relevance of broadband, digital literacy, computer ownership, and affordability – likely overlap.

Several months ago, with the strong encouragement of FCC Chairman Julius Genachowski, we started working with the FCC’s broadband team to explore how we might help.  They were critical to helping with the data necessary to determine how to really focus in on a concept that could provide the maximum benefit.  Chairman Genachowski and Blair Levin, Executive Director of the FCC’s Omnibus Broadband Initiative, were very supportive of developing a proposal that would help low-income households that do not currently receive broadband.

The A+ pilot program builds on the experience of Cox Communications’ Santa Barbara initiative, by proposing a two-year, public-private partnership designed to promote sustainable broadband adoption for a vitally important-but-vulnerable population – middle school-aged children in low income households that do not currently receive broadband service.  The program is called Adoption Plus because it is a comprehensive approach that treats broadband adoption as a multi-faceted problem that requires multi-faceted solutions.  Barriers to adoption – e.g., relevance, digital literacy, computer ownership, affordability – are interwoven and cannot be resolved in isolation.

The goal of the A+ program is to help give millions of students the opportunity to become digital citizens of the 21st Century by driving sustainable broadband adoption and positively and materially affecting educational outcomes.

Here is how it would work (a more detailed summary can be found at NCTA’s website):

• A+ would promote the adoption of broadband service to households that do not currently receive it, by offering comprehensive digital media literacy education, discounted computers, and discounted home broadband service to households representing up to 3.5 million American children in grades 6 through 9 who are eligible to receive a free or reduced-cost meal through the National School Lunch Program.
• We propose that school districts administer the program, apply for federal funding, and partner with non-profit corporations promoting digital media literacy, computer manufacturers and/or retailers, and cable and other broadband Internet Service Providers (ISPs).
• Perhaps the most important role of the school districts is to implement digital media literacy programs, including online safety training, and training on how to use computers and broadband.  Including administration costs, we recommend that $100 million of federal funding be used for school districts which apply to set up an A+ program.
• We also anticipate that computer manufacturers would supply discounted computers as partners in A+, but ask the government to consider whether and to what extent federal funding is appropriate to help further discount the cost of computers.
• For each eligible household, participating ISPs would provide free installation of broadband service; a 50 percent discount off the monthly subscription cost of their entry level broadband service; and a 50 percent discount off the cost of modem equipment, whether purchased or rented.
• It is important to note that, while we recommend federal funding for digital media literacy training and administration of this program by school districts, we are not seeking any government funding of the ISPs’ contribution to A+.

While the A+ program is open to other broadband ISPs who wish to participate, so far, all of the cable ISPs represented on NCTA’s Board of Directors have agreed to participate in the A+ program as outlined above.  Those companies also have committed to air public service announcements explaining and promoting local A+ programs.  We estimate the value of the cable ISP contribution to the A+ program, with full student participation, at well over $500 million.

Our industry will continue to creatively harness the power of technology, including broadband, for educational purposes in other ways as well.

For example, A&E Television Networks, through HISTORY, has partnered with more than a dozen major cable operators around the country in creating Take a Veteran to School Day, where veterans are welcomed into local schools for special assemblies and oral history projects – a program that was recognized by President Obama at the White House just a few weeks ago.  And Viacom has partnered with the Bill & Melinda Gates Foundation in the Get Schooled initiative to identify effective approaches to increase high school and college graduation rates, improve post secondary readiness and promote the fundamental importance of education.

With the nation’s new emphasis on science, technology, engineering, and mathematics (STEM) education, major cable companies have stepped up with new commitments, such as the $100 million Connect a Million Minds initiative launched in November by Time Warner Cable, to introduce young people to opportunities and resources that inspire them to develop the STEM skills that will help solve our economic, environmental, and community challenges of the future. Discovery Communications is supporting STEM education by offering a commercial-free programming block for middle schoolers on the Science Channel, and through Discovery Education, which will provide STEM Connect, a new broadband delivered curriculum-based career development resource helping students link their science, math, engineering and technology education to their future careers. President Obama recently recognized both Time Warner Cable and Discovery in a White House announcement on STEM initiatives.    Earlier this year, Comcast teamed with One Economy to launch the Comcast Digital Connectors program in more than 20 markets nationwide, an initiative designed to teach broadband technologies to young people ages 14-21 from diverse, low-income backgrounds, who then put that knowledge to work in their local communities.

And Cablevision offers teachers important tools for using broadband and interactive technology as part of its Power to Learn program.

There are many other examples of creative initiatives that recognize how broadband can positively affect education of America’s children.  What they have in common is an understanding that partnerships and collaboration among interested stakeholders is required for success.  A+ is an ambitious step forward in this tradition, and we look forward to working with interested government agencies and other stakeholders to make it a reality.

Even long-time veterans in the U.S. cable industry are often not familiar with the very vibrant international cable business.  It’s typical for some people to look to other countries for models of what might work in America, but it’s important to understand that the competitive landscape and regulatory infrastructure in those countries are dramatically different from our own.  Before you suggest we ought to do things like they’re done in Finland, it’s helpful to understand what’s going on in those markets.

For example, South Korea and Japan are viewed by some Westerners as great broadband success stories. In reality, those markets’ policies have prohibited certain kinds of competition, which has restricted broadband growth outside key areas. And as for their vaunted speeds, there is evidence to suggest that narrative is flawed as well.

Therefore, I’m pleased to present a guest post from John Medeiros, the Deputy Chief Executive Officer of the Cable & Satellite Broadcasting Association of Asia (CASBAA).  His organization is an industry-based advocacy group dedicated to the promotion of multichannel television via cable, satellite, broadband and wireless video networks across the Asia-Pacific.

Sitting in Asia, where the pay-TV industry is growing by leaps and bounds, and reading about the debate in the U.S. on the cable industry’s success (or lack thereof) in stimulating broadband development, leads one to muse about the definition of success.

Some American observers have argued that Asia is so far ahead in broadband that the U.S. should look here for tips on how to catch up.  But with 56% of US broadband connections supplied by the cable industry [according to SNL Kagan], and with many parts of the country witnessing aggressive, creative competition between cable companies, satellite providers, and traditional telcos, the U.S., as viewed from Asia, looks mighty good.

Of course, there’s no reason this had to be the case – what made the difference in North America was the shift of US regulatory policy beginning in the mid-1990s.   The pricing and bundling freedom that U.S. cable operators have enjoyed since then has made it possible to build out high-capacity networks and develop new, high-quality content offerings on a continental scale. It’s also spurred growth and competition from other platforms. The free hand the cable industry has enjoyed in making technological choices has ensured the networks meet the real demands of paying customers.

Contrast this relatively enlightened regulation with some of the protectionist psychology that still prevails in some Asian markets.  A good example is Taiwan, one of Asia’s richest markets, which has a regulatory system where the government applies a regulatory strait-jacket to all operators (cable and IPTV).   Cable operators are all required to run the same 90-plus analog channels, and – never mind the rising global prices for content – they have not been allowed to raise rates in over seven years (and last year, during elections, the companies were forced to swallow rate reductions that had no rational basis, other than “the constituents like it.”). The result has been very limited investment in new infrastructure or in quality content.  Taiwan is well behind Asia’s other advanced economies on the digital curve, with the first digital STBs rolling out only this year.

Another example of over-rigid regulation is India, at the other end of the per capita GDP chart.   Apart from rate controls that have no clear economic justification (why should every channel cost consumers precisely 5 rupees per month, no matter what kind of content it airs?), India’s regulators have hobbled the market by requiring that every pay TV system (whether cable, IPTV or one of the 6 DTH operators) has access to the same content on “non-discriminatory” conditions.  So TV becomes a commodity without differentiation.   The inevitable result is that in that country, too, cable network upgrades and digitization are proceeding slowly, and regulators fret that national digital development goals are not being met.

India’s initial cable-TV development was, by contrast, one of the great success stories of private entrepreneurship in human history.  In an infrastructure-weak developing country, totally private capital and skill were mobilized to wire more than 80 million homes in about 17 years – a huge accomplishment (in sharp contrast to the 50 million homes wired by the state-owned telecommunications establishment, in about 100 years of trying.)   But now, with the cable industry firmly established as a part of India’s modern infrastructure, the government insists on hobbling it in the name of “consumer interest.”   The result will be that cable networks – starved of enough revenue to justify rapid upgrading – will remain low-capacity and analog far longer than they should.

Despite these problems, the Asian pay-TV industry is growing very rapidly.   This continent is still in the rapid-build-out phase of connection.  One recent report estimated that the top 40 pay-TV operators will add 11 million new subs this year, for about a 20% annual growth rate.  Growth is strongest in the low-ARPU emerging markets such as China and India, but it is warped by uneven regulatory policies (because India’s cable regulations are so draconian, the biggest growth is coming on DTH platforms; China has lots of digital cable growth, but it is centrally-ordered not market-generated).

Of course, talking about “Asia” in a single breath is a bit nonsensical, as this continent is easily the world’s most diverse region when it comes to pay-TV development.  There are examples of over-rigidity in some places, but some other Asian markets have regulators who are among the world’s best – enlightened, transparent, market-friendly and globally aware.   And in places like Indonesia and Vietnam, the regulators and the industry are striving to liberalize their markets and bring them up to global benchmarks, in order to overcome the handicap of years of excessive state control.

It makes for a fascinating mix of issues.  People who are interested in learning more about the Asian pay-TV market – with all its opportunities and obstacles – should consider attending the Asian pay-TV industry’s annual convention. This year’s event will be held in Hong Kong from Nov. 3-5.  More info can be found here: www.casbaaconvention.com.

At a time when our country is developing a National Broadband Plan, it absolutely makes sense to have a single definition of the term “broadband” for regulatory and policy purposes. The FCC announced last month that it was releasing a Public Notice, requesting input on this issue (The FCC’s Carlos Kirjner discussed this in further detail in a blog post) and on Monday, we filed comments in response to this Public Notice.

It’s worth noting that this isn’t the first time the FCC has visited this issue, since the Commission adopted a new definition just last year in connection with changes to the Form 477 broadband reporting process. The 477 process semi-annually collects information from service providers about broadband connections to households and businesses; info has been collected each year, starting with data as of December 31, 1999.  Last year, the Commission found that services with download speeds of more than 768 kbps and upload speeds of more than 200 kbps will be defined as “broadband” services. Such a definition was important for the NTIA and RUS to have for use in their broadband funding programs.

But, as we say in our filing, we don’t think it would be a good idea for the Commission to use the process of defining “broadband” as a vehicle for imposing obligations or setting goals with respect to factors such as speed, price, symmetry or “openness.”  The definition has been, and should continue to be, simply a way to describe what is being made available to customers.  Any discussion of national broadband goals or potential service provider obligations should be done separately.  As cable’s history of providing faster and faster speeds demonstrates, the FCC’s definition has never served as a constraint on what is offered to consumers. What’s needed is a generic definition that focuses on the core functionality of the broadband service that customers are receiving today.

We identify three key advantages to such an approach:

• Using the definitions already in Form 477 (also used by NTIA in its recent mapping Notice of Funds Availability), will enable the Commission to compare a consistent set of data over time.
• Using those existing definitions will avoid the need to make additional changes to the Form 477 reporting process.
• It’s helpful for government agencies to use a consistent set of definitions.

Consistency is important and if we try to measure aspects at too granular a level, it becomes difficult to achieve such consistency.  For example, some parties have raised concerns about using advertised speeds as the basis for measuring broadband deployment.  In the Notice, the Commission notes that advertised speeds “generally differ from actual rates, are not uniformly measured, and have different constraints over different technologies.”  But simply requiring providers to report “actual” speed won’t lead to more meaningful information because there is no uniformity in how it is measured and there are numerous factors beyond the control of the provider that affect upload and download speeds.  Consequently, in our comments, we encouraged the Commission to work with the Internet engineering community to develop a consistent, uniform, reliable method of measuring “actual” speed before making a change.

There are proponents who argue that symmetry should be required, but most broadband networks are engineered to provide higher speeds for downloading than for uploading. Such an approach is based on consumer preferences and behavior; if symmetrical services are required, that would prevent providers from offering asymmetric services that might better suit the needs of some consumers.

A comparison might be made to creating a definition of a “computer.” Such devices can range from a netbook costing a couple hundred dollars to several thousand for a Mac Pro. The core functionality of various computers is what remains the same. Such a straightforward approach is also best when attempting to define broadband, as it exists at this time.

NCTA has released a new white paper prepared by Microeconomic Consulting & Research Associates, Inc. (MiCRA). The report is entitled Benefits to Consumers from the Transformation of the Cable Industry. In part it is about the cable industry’s transformation from a simple analog video provider to a provider of multiple services over an advanced digital communications platform. But more simply, it’s about the benefits to the consumer of cable’s Triple Play of voice, video and data.

Here’s a typical data point from the report, that shows how far we’ve come over the past decade.

A typical cable subscriber in 1998 paid $27.00 ($37.00 in 2008 dollars) for a few dozen television channels (composed primarily of local broadcast television, local public, educational and governmental (“PEG”) channels, superstations, and a handful of cable networks). In 2008, this same subscriber could purchase a suite of services, for approximately $100 per month, which included digital voice service, high-speed data service, and digital video service offering hundreds of channels of increasingly popular cable network programming, high-definition video quality, and large libraries of on-demand programs.

A look back to the 90s, before our fiber buildout, shows how powerful the impact has been of cable’s improved hybrid fiber-coax architecture. Back in ‘98, only a small fraction of subscribers were taking services like digital video, phone and high-speed data access. For example, there were 1.4 million digital subs in ‘98 (according to SNL Kagan) and there were 40.4 million in 2008.

In analyzing the power of bundling, the report says:

The marginal cost of providing an additional customer with any of the three services (voice, data, or video) is low because of the large economies of scale in deploying a wireline (or fiber-based) network. Moreover, once a customer has subscribed to one service, the marginal cost of providing that customer with a second and third service is even lower.

In addition, these savings can be passed on; according to the report, “[b]undled services are priced between $5.00 and $50.00 lower than the sum of the prices of the components.” MiCRA estimates that that cable’s investments – $129 billion spent in upgrades between 1999 and 2008 – have resulted in about $35 billion in annual consumer benefits. The study shows that the benefits from offering new services and new service bundles are shared across all demographic groups, including lower-income households.

You can find a copy of the entire report on NCTA’s website.

Not many hours go by in Washington these days without talk of broadband policy, and this week was no different.  At the National Press Club, the Phoenix Center for Advanced Legal & Economic Public Policy Studies released their “Broadband Adoption Index” (or BAI), their methodology to provide a way to evaluate the value of broadband to society.  The BAI demonstrates how the benefits of different broadband technologies can be examined and compared.  The BAI doesn’t just count actual connections, it looks at the “value consumers and society get from adopting various broadband technologies.”

For example, in some countries around the world, mobile or cell phone connections are extremely valuable to those populations.  In remote places where families may not own or have access to personal computers, a cell phone connection is a useful and vital link to the world.  Alternatively, a cell phone connection in a typical American city may be valued much differently than the current 15Mbps cable connection that is currently available in that neighborhood.

The impetus behind the new index is because broadband adoption’s value is currently not weighed and the organization most cited for worldwide broadband data — the Organization of Economic Cooperation and Development’s (OECD) – relies on a flawed methodology that doesn’t take into account household size, which is a huge factor when you compare the U.S. to most other countries.

Problems with OECD rankings are nothing new.  In fact, we’ve talked about issues with that data and U.S. broadband ranking a few times in the past [The Trouble with Broadband Deployment Statistics, All Things Being Equal, Japanese Broadband, and Getting America Connected].  The Phoenix Center contends that their BAI can be a more useful tool since it looks at worldwide broadband adoption rates, rather than the broadband connections per capita OECD uses.

So, how can the BAI useful in a policy arena?  First, the Center mentions the importance of setting targets for broadband adoption and deployment as a nation.  Without a target, how will be know when we’ve achieved success?  Is success for the U.S. when high-speed broadband is available to 100 percent of the population?  Or, is success when 100 percent of the population utilizes broadband technology?  The report also notes that the government has not set a target, so until they do, it will be difficult to measure success, especially in light of the $7 billion in stimulus funds that have been dedicated to broadband.

The Phoenix Center also hopes policymakers look beyond the OECD data and its limitations.  As they note in the executive summary of the report, merely comparing the per-capita adoption rates for two countries with differing demographics, economies, and population density “provides little information relevant to broadband policy.”

While there are many voices talking about broadband policy and strategy, most universally agree a strong broadband infrastructure here in the U.S. is of deep importance for future economic growth, health care, education and jobs.  Cable has already played an important role in broadband deployment thus far, wiring 92 percent of U.S. households for high-speed Internet access.

As the government moves closer to granting its broadband stimulus funds, we’ve outlined what we think should be the guiding principles [video, blog post, white paper].  And we’ve also filed comments in the FCC’s proceeding to craft a national broadband plan, which is scheduled for a early 2010 delivery.