August 5th, 2013

PK Icon

Sunday was good

I successfully avoided letting work know I was back home Friday and Sunday and thus avoided blogging about the TWC v. CBS retrans fight. (The answer is: 'the market is dysfunctional and TWC cannot easily give up because it is, I am fairly sure, past the monopoly efficient price on cable rates. The fact that CBS rates will also apply to other MVPDs matters less because the whole point of the monopoly efficient price is that even for a monopolist there is an upper bound to what you can charge before you lose so many customers you start taking a hit, but I digress . . . .)

The result is we spent Sunday cleaning the basement, seeing Despicable Me 2, and otherwise doing family stuff. Go us!

Back from vacation today.
PK Icon

Link Harvest: Interesting blog post on Google Fiber's 1st Anniversary

An interesting take on how GOOG Fiber has impacted the market despite its very modest (probably less than 2K so far) number of subscribers.

I confess to feeling conflicted on the "build to demand" model. It is a radical departure from the traditional universal build out requirement of telecom and cable -- which included anti-redlining protections. First of all, I lost the fight to preserve anti-redlining rules in '05-'06 when AT&T and VZ lead the charge to revise local franchising law to eliminate most public interest obligations that had existed on cable services (including anti-redlining rules)  on the promise of deploying video services and better broadband. That Google is taking advantage of this and offering real competition seems to me just deserts. Except, of course, for the people in the neighborhoods that don't have service because they didn't meet their fiberhood quota.

Second, GOOG did offer every neighborhood an equal chance. But the reality is that in poorer neighborhoods they have no idea why they need 1 gig (and may lack computers at home to take advantage of it) and it actually cost money to register for the service. True, it was a modest fee (and such things are useful to help ensure commitment and fund initial build), but the fee requirement weighs disproportionately on the very communities most subject to redlining.

There are other offsetting issues as well. GOOG's policy of offering free lower-speed service for a one-time install fee to multi-dwelling units (MDUs), such as low-income housing projects, helps get fiber and affordable broadband into places you wouldn't otherwise penetrate with affordable broadband.

Finally, there is the fact that GOOG is a new entrant offering an advanced service. (In fact, if GOOG were not also offering video, it wouldn't need a franchise and the anti-redlining stuff would not have come up because we don't require any service obligations on broadband.) Traditionally, we've applied build out to the basic service. We made a somewhat similar calculus to get fiber to the home (FTTH) by exempting FTTH systems from the unbundled network element requirements so Verizon and other telcos did not have to share the new infrastructure with competitors such as Earthlink. Again, if traditional players want to play the 'fairness' card, then we ought to revoke the incentives we gave them which were equally 'unfair.'

As always, life is complicated.
PK Icon

CBS crosses a line, so I smacks them, or I Practice Treebeard Politics

For those not following the CBS v. TWC blackout, the question for me is not "who is right" but "public policy is about protecting consumers, not about resolving industry food fights."

So when CBS crosses the line and blocks all TWC broadband subscribers (regardless of whether they are in the relevant markets or even have TWC as their cable provider) from accessing content on I smacks them hard, with more smackings to follow.

Annoyingly, this gets translated by some as my being on TWC's "side" -- despite the fact that I have never hesitated to smack around cable operators for their anti-consumer conduct. My response is that what consumers need to be saying is not "CBs is right" or "TWC is right" but "Congress and FCC, you created this mess with a web of laws and a failure to enforce relevant protections -- so FIX IT!" Or, as I like to say, Treebeard Politics.

"I am not altogether on anyone's side because nobody is altogether on my side, if you understand me. . . . And there are some things, of course, whose side I am altogether not on; I am against them altogether." -- Treebeard, The Two Towers

So too here. I am not altogether on either CBS' side or TWC's side. But there are some things i am against altogether -- notably abusing consumers and using them as pawns in industry food fights.

Time to rouse the Shire.
Before commenting, first read this three year old blog post for necessary background.