As Time Warner cable this week begins their trial of tiered Internet pricing in Beaumont Texas, the blogs are aflutter over the various caps Time Warner has proposed.  Time Warner’s plans start with caps at 5 gigabytes and go up to 40 gigabytes. Going over the cap will cost $1 per gigabyte.  Time Warner is also bringing transparency to usage by giving customers a gauge that will allow them to monitor their bandwidth consumption the way cell providers allow you to track your minutes.

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.

During our recent conference, The Cable Show, I took a camera over to CableNET, a technology exhibit that’s been held for 16 years. Its goal has always been to show “…next-generation broadband technologies and services that cable operators are expected to deliver to consumers in the near term.”

I wanted to capture something about tru2way, since that set of technical specifications has been in the news lately. This video attempts to show that there are three key parts to tru2way: consumer electronics, such as TV sets or other devices; applications, which can be written once and then run anywhere; and cable operators, who would then support tru2way on their networks.

Earlier today, we issued the announcement: Sony Electronics and Major U.S. Cable Operators Negotiate National “Two-Way” Plug and Play Solution.

Here’s some of the coverage:

• Sony Embraces tru2way
• Sony, Cable Bury Two-Way Hatchet
• Sony signs up to support tru2way
• Sony to Build ‘Tru2way’ Interactive TVs
• Sony + Tru2way = No More Set-top Boxes?
• Sony commits to ‘Tru2way’ TV

For more on tru2way, watch this CNBC interview with CableLabs’ President & CEO Dick Green that took place at our recent annual event The Cable Show.

Insight Communications CEO Michael Willner recently launched a new blog discussing his company’s take on telecom policy. In the time the blog has been up, he has tackled issues from cable investment in wireless technology to customer service, and from a la carte to network management.

Yesterday’s post, titled Confessions of a Network Manager (Part I) takes a look at the consumer friendly reasons for network management practices. It’s a good read, and like much of his writing is a candid look at why operators manage their networks, why that’s good for you, and even a frank discussion of why companies would not want to talk openly about specific practices.

Network management is not your enemy — it is your friend, even if you’re a P2P enthusiast. Without network management, everyone’s online experience would melt down to a completely useless exercise. It would reduce the Internet to a chaotic free-for-all as if you built a 10-lane superhighway and didn’t have any traffic laws in place to keep the traffic moving.

The fact is, network management is absolutely necessary throughout the Internet, from the ISP’s all the way through to backbone providers. It happens everywhere on the Internet. And it’s a good thing that it does.

Bandwidth, throughout the Internet, is a shared asset. Accordingly, we all have to learn to live with one other as good neighbors. You don’t go to Joe’s Barbecue, an all-you-can-eat buffet restaurant, and proceed to eat all the food. The goodies are affordable because they are offered under law of averages and a shared economic model. If my brother-in-law, Norman, and a few of his buddies showed up every night, Joe would either have to raise the price for everyone or start charging by the pound.

I guess, to some extent, we created this debate ourselves. Many of us, myself included, didn’t really want to talk about how we managed our networks to keep the traffic flowing smoothly. We simply did it. Frankly, I believed that if we were totally transparent about it, certain people would figure out ways to defeat the rules of the road, making our management practices harder and more intrusive than we were wanting them to be.

Much of his writing is similarly inviting and personal. If you’re not reading it, you should take a look.

In our very first post, we promised to bring you guest commentary. I’m pleased to present our first contributor: David Broberg, Vice President of Consumer Video Technology for CableLabs.

“Honey (or Dad) will you fix the network again?” That’s the kind of greeting I’ve been getting far too frequently when I come home from work lately. Have you heard that one yet? Clouds are often used graphically to represent the network connections and it seems my personal cloud (home network) has been suffering some growing pains lately. This growth has required far more attention from the local IT-guy (me).

A few months ago, I attended CES in Las Vegas and this was one of the greetings waiting for me when I returned home from my travels. At the show I saw dozens of new products that will connect to your home network and it frightens me to think these problems are likely to get worse before they get better. I recently took an inventory of the number of IP devices on my personal home network and here is what I found: Up to 8 PCs at any given time; two webcams, two NAS drives, two IP printers, one Xbox360, one DVR, two Nintendo DS units, one Windows Mobile Phone with WiFi access and a Chumby! All of these asking my router for an IP address - that’s 20 devices!

I traced what seemed to be most of the problems to the fact that most of these devices were using dynamic IP assignments and a few were fixed IP addresses; many with the dynamic-IP assignments would store their IP address when they were in power-saving mode, yet act as if they were disconnected from the network. If the router got rebooted for any reason while any of those devices was asleep, the device that just woke up would most likely find an IP address conflict because another device was now assigned to its original IP address. Another reboot of the router only pushed the problem down to the next device that was temporarily off-line. As a fix, I went around the house and reassigned fixed IP addresses to all 20 devices – so far this strategy seems to be helping but it wasn’t easy. Perhaps there is another way to avoid this problem, but that’s not really the point.

One of the trends from this year’s CES was for more and more consumer IP devices for your home. Soon, many of the flat panel TVs and STBs are likely to have IP connections, BluRay players with network enhanced features are coming too. Many mobile phones already connect to WiFi, soon this may be a standard feature on all cell phones. The sales of Xbox360s and PS3s are skyrocketing – they need a network too. There are more IP-connected devices coming including robots, music players, Internet radios, media center extenders, cameras, picture frames, flash-memory, lights, thermostats, sprinkler timers, beds – a few years ago there was an Internet-capable refrigerator and I’ve even got an Internet-connected wristwatch (thankfully it doesn’t need its own IP address since it goes through the PC connection.) If you like gadgets like I do, your home will become its own cloud over the next few years.

To make matters worse, another trend at CES was for far more fragmentation in this home networking market, not more uniformity. My house was prewired with structured wiring and has Ethernet available (at one socket) in every room. I’ve added two WiFi access points at opposite corners of the house (one up, one down) to provide good wireless coverage with 802.11b/g and I also added an original HomePlug powerline modem to connect the IP webcam in the garden shed. That accounts for three separate physical layers (one wired, one powerline and one wireless) and more are coming.

On the wireless forefront, many routers are moving to 802.11n or “pre-N” since the standards aren’t quite finalized. It promises faster rates and better coverage, but with all the “pre-standardized” units, interoperability is in question. There were also product introductions for portable TV based on WiMax technology from Motorola and something called a femto cell providing CDMA access inside your home from Samsung. For shorter ranges (3M), there are high speed and low speed choices including the new 480 Mbps wireless USB standard and the popular Bluetooth technology (3 Mbps) which just released version-2.1+EDR. Wireless mesh networks are also growing in popularity and innovation, with competing solutions from ZigBee Alliance and Z-Wave Alliance, both are low-speed technologies aimed primarily at home control and automation.

Networks connected through power-lines also saw innovation and chaos at this year’s CES. There were at least two updated competing power-line networking technologies that offer faster speeds capable of sending HD video with better noise immunity and more reliability. One was from Panasonic called HD-PLC (190 Mbps) the other system is called HomePlug AV (200 Mbps). Some of these technologies are being built into flat-panel DTVs to eliminate the need for the unsightly video/audio cables.

The third physical layer in the home is the coax network. This is usually what is used to connect the TVs in your house. Recently a number of companies have introduced technology to use this cabling for home networking connections too. It offers many advantages because of its shielding and design for high frequencies. There were many innovations described at CES this year including demonstrations of HDMI over coax, 1394 over coax, Ethernet over coax, one that combines 1394 and GigE over coax and a popular system called MoCa which is now introducing components that support the latest version 1.1.

There are other groups working to standardize the home network connections too. CableLabs has published home networking extensions to the OpenCable Host & OCAP specifications and has approved content protection systems for IP-based home network connectivity. The 1394 trade association was demonstrating technologies and devices that can bridge 1394 protocols to coax, fiber and other new physical layers. The Hana Alliance was demonstrating whole-home high-definition video networking solutions also based on 1394 technology at CES and released their Hana 2.0 design guidelines. Meanwhile CEA’s own R7 Home Network Committee maintains a variety of home networking standards as well as active projects to define future remote user interface protocols.

A recent market study from MultiMedia Intelligence reported that shipments of Internet-Protocol (IP)-enabled consumer electronic products reached 64 Million units in 2007. They say this represents a nearly 73% growth. They also report that semiconductor revenues from technology that enables these interfaces will exceed $2 Billion by 2012. Clearly we are just at the beginning of a growth of home networking technology as this trend extends to more and more homes. This growth will impact some homes earlier than others. Those with pre-teens or young teens at home now, are likely to see the most significant growth over the next 5 years. Others will be impacted more gradually. If you still haven’t been asked to fix the network yet, you soon will be.

We created this blog to tell cable’s story. The cable industry has spent $130 billion on our network since the 1996 Telecommunications Act was passed. That investment of private capital has spurred fundamental change in how we work, play, communicate, and entertain ourselves.

Today a friend sent a link to a video that illustrates that point beautifully. It’s a spoof of the Fox series 24. Allegedly the ‘long lost’ original pilot made in 1994, the video clearly shows the changes in technology we’ve seen over the period of time that we were building our network. Take a look.

The cable industry has spent more than $100 billion since the Telecommunications Act of 1996 to create the most extensive and robust broadband network found in America. This robust technology platform now passes more than 117 million households with high-speed Internet Service, serves 65 million households with video services, and provides telephone service to 15 million customers.

Digital Phone

Consumers now have access to more competition than ever thanks to cable. Digital telephone service provides consumers with a true alternative to standard telephone service. While some cable operators have offered traditional circuit-switched telephone service for years, most are now offering digital phone service. This service often comes as part of a “bundle” where multichannel video, high-speed Internet and voice services are offered as a package and billed in a single invoice, providing a better value and more simplicity for customers.Through the use of software, digital phone service provides all the functionality of the public switched telephone network (PSTN), while making possible new features not available through traditional telephone service, such as Web portals that allows customers to review their calling history or listen to voicemail messages online when away from home. Digital phone service is a revolutionary technology that has the potential to completely change how phone calls are made and how voice services are used.

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There are many ways that the cable industry has expanded consumer choice. You don’t have to be that old to remember a time when you had maybe a half-dozen TV viewing choices - maybe a few more, maybe less - and now you probably have hundreds. Not that long ago, it was the same situation with the telephone.

A couple years ago, NCTA created a video to explain cable’s impact on America. Take a look and skip ahead about two minutes in. That image of the phone industry as stodgy is amusing because it was so true. Rotary dials, touch-tone, mobile phones - the pace of these innovations was pretty slow.

But today, consumers are finally enjoying true facilities based competition in local phone service. Cable’s service is reliable plus it offers many of the standard features for a great price. Generally, you get unlimited calls anywhere in the U.S., Canada and Puerto Rico. You get to keep your current home phones, wall jacks and phone number. Many operators include services like Call Waiting, Caller ID, Call Forwarding, Speed Dial, and so on. But you also see features like digital voicemail that can be accessed over the Internet from any location, and new features like Caller ID on the TV are beginning to be introduced in some communities.

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More than 15 million Americans have switched to cable’s digital voice service. One big reason that consumers are switching is the significant savings that can be found, especially if the service is included as part of a bundle that includes video and high-speed Internet.

In fact, in the past four years, consumers that have switched to cable phone service have already saved $23 billion. Evidence of that can be found in a study by Microeconomic Consulting & Research Associates, Inc. (MiCRA). The report, “Consumer Benefits from Cable-Telco Competition,” was first prepared in 2006 and then updated in November of 2007.

According to MiCRA, consumers and small businesses across the country have already saved $23.5 billion and may save a total of $111 billion on their phone bills over the next five years as a result of robust competition. MiCRA estimates that residential consumers could save an average of $144 or more each year, while small businesses could save 50-70% on their phone bills – although the projections conservatively assumed that small businesses would save about $240 each year.

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In 2007, J.D. Power and Associates’ annual rankings of telephone service provider customer satisfaction ranked cable companies #1 in customer satisfaction in all six US regions. More than 15 million customers currently enjoy cable’s phone service, and it’s no wonder cable companies are signing up millions of new customers every year.

Cable’s telephone service often comes as part of a “bundle” where multichannel video, high-speed Internet and voice services are offered as a package and billed in a single invoice, providing a better value and more simplicity for customers.

Cable’s digital phone service makes possible new features not available through traditional telephone service - such as Web portals that allows customers to review their calling history or listen to voicemail messages online when away from home. Digital phone service is a revolutionary technology that has the potential to completely change how phone calls are made and how voice services are used.

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