If regulators sign off on it, the nation’s largest cable company will end up with a significant foothold in both the broadcast media and movie industries. Overnight, a content distributor becomes a content producer. Pre-merger, Comcast had little incentive to play along with the copyright cop ambitions of the RIAA and MPAA. This merger could change everything, driving Comcast into policing not just the distribution of its own wares but those of fellow studios.
Given how Time Warner Cable would regularly roll over for MPAA requests to disconnect service, both before and after being spun off from parent company Time Warner, this is a legitimate and pressing concern. The MPAA spends a lot of time trying to track down pirates and they often get the wrong person. The MPAA has also pushed hard for restricting what DVRs can record, locking down digital media to the point of near-uselessness, and wiping out net neutrality so that peer-to-peer programs can be blocked on a whim. None of these proposals are good for Comcast data or video customers and I do not think Comcast wants to unnecessarily restrict what customers can and cannot do with their connection.
That said, what will they do when Universal Pictures, a division of the merged company, has a competing interest? Which part of the company has their interests heard first? Will Comcast give Universal special access to routers and logs to track down pirates? Will they start using deep packet inspection? What can the falsely accused do about it?
This is why we should be very, very scared of the continued integration of media and telecommunications companies. The verticial monopoly of wholesale and retail telecom is bad enough, but when they control the content going over the pipe as well, it can get really ugly really fast.
Happy New Year! This Broadband Bytes covers from December 20 through the end of the year. The end of 2008 saw even more retransmission battles (in particular the 11th-hour showdown between Time Warner and Viacom), Qwest trying to unplug a rival that’s suing it for racketeering, and the pending launch of FTTH services in Lafayette, LA. I predict that 2009 will offer up explosive growth in broadband speeds and availability fueled by federal dollars, an increased flight of users from cable to online video streaming and continued greater-than-inflation rises in programming costs.
Qwest’s official company policy appears to compete on everything but having a superior product at a superior price. After small New Mexico ISP SkyWi sued them for anti-competitive practices, Qwest decides to shut down the ISP claiming that they are in arrears by $1.7M. Regulators in New Mexico responded by demanding that Qwest restore service pronto to “critical” customers. Given Qwest’s attitude with Centerville over RDA funds for UTOPIA and their continued efforts to block pole attachments, I think we can see a pattern from America’s least competent ILEC. At least they’re smart enough to slash prices on DSL service across the board.
After years of litigation and construction, Lafayette is finally to launch fiber services in the city next month. Packages are priced very competitively with AT&T and Cox with an $85/mo triple-play package that includes 10Mbps symmetrical Internet service. Lafayette is both wholesaler and service provider, so it makes their financial goals a good deal lower than open networks like UTOPIA that have to share revenue with third-party providers. The Lafayette Pro Fiber blog has a breakdown of pricing options.
It wouldn’t be 2008 without some more bad economic news. The Washington Post reports that the housing slump is hitting homebuilders pretty hard which means you can’t depend on greenfield development to power your growth. New providers will have to look at expensive brownfield development in order to gain new customers. One bright spot is that a think tank has recently called for lowering pole attachment rates as a way to spur broadband deployment. That could spell good news for overbuilds.
As if it wasn’t bad enough that video rates keep on climbing (thank the Governor of New York for some of those increases), text messaging rates are seeing a precipitous climb in overage charges even though it costs fractions of a cent to send each of them. Providers have uniformly increased the cost per message from 10 to 20 cents. Given that a text message is no more than 140 characters, you’re essentially paying over $1400 per MB for texting.
Could big broadband kill Blu-Ray? ZDNet seems to think so citing the growth on online HD video options and the high cost of both players and movies. (h/t: Woods Cross Citizen) A few high-profile flops aside, online HD video has been exploding with manufacturers like Roku and LG integrating Netflix, YouTube and a bevy of other video providers into set-top boxes and DVD players. Even the Wii is getting in on the streaming action. To really compete with Blu-Ray, however, requires a solid 16-24Mbps of bandwidth, something most households only dream of having access to. Will the explosion of on-line video kill cable and broadcast TV? Probably not. Despite some strong warnings to get ahead of the online viewing trend, a recent study showed that online viewers are just as likely to watch live TV as everyone else.
Remember how much TV sucked after the writer’s strike and how some shows (I’m looking at you, Heroes) managed to never quite recover? The Screen Actor’s Guild is getting dangerously close to authorizing a strike after it’s January 12 meeting. If, like me, you’ve been eagerly anticipating new seasons of hit shows like Lost, we might end up waiting a lot longer. Maybe it’s time to get around to watching Jack of All Trades on Hulu.
That depends on who you ask. Consumer groups are no doubt going to flip for his proposed expansions of online privacy, pushing providers to offer true next-generation speeds and fighting bandwidth caps. ISPs, free market types and the MPAA/RIAA are no doubt going to call foul on some of these proposals. Obama is also proposing to open up big chunks of wireless spectrum including the already-opened white spaces. Unfortunately, there’s no mention of fiber or enabling better competitive choice in our telecommunications options.
As a rarity, I’m going to ask that you drop your two cents into the comments and leave my opinion out of the main post. Do you think Obama will fix broadband? Which policies do you want to see him adopt?