Technology360

The delusions of net neutrality

Andrew Odlyzko of the University of Minnesota makes a withering analysis of the arguments of network service providers concerning why (real-time streaming capabilities) they oppose net neutrality.  Odlyzko's analyses frequently challenge flabby assumptions with hard data and this one is particularly valuable.

Two of Om Malik's blogs today provide an overview of this important paper.  In Streams Won't Pay for Themselves, Chris Albrecht writes:

... Video can be delivered more efficiently and less expensively using downloads over streaming, says Oldzyko, and these downloads can be more accommodating to the viewing habits of online audiences and just as secure as streams. ¶  Oldzyko thinks the belief that we need real-time streaming is a holdover from broadcast and phone networks. ...

Link:  NewTeeVee.

Then, in Hulu Bad For the Net, Video Still Not Clogging It, Stacey Higginbotham writes:

... the largest part of the paper is devoted to data that supports his conclusions that content, such as Internet radio and video, is worth less than connectivity such as voice or Twitter. People don’t pay for content, they pay for connectivity, says Odlyzko. ...

Link: Gigaom.

Here's the abstract of and link to Odlyzko's paper:

Abstract. Service providers argue that if net neutrality is not enforced, they will have sufficient incentives to build special high-quality channels that will take the Internet to the next level of its evolution. But what if they do get their wish, net neutrality is consigned to the dustbin, and they do build their new services, but nobody uses them? If the networks that are built are the ones that are publicly discussed, that is a likely prospect.

What service providers publicly promise to do, if they are given complete control of their networks, is to build special facilities for streaming movies. But there are two fatal defects to that promise. One is that movies are unlikely to oer all that much revenue. The other is that delivering movies in real-time streaming mode is the wrong solution, expensive and unnecessary.

If service providers are to derive significant revenues and profits by exploiting  freedom from net neutrality limitations, they will need to engage in much more intrusive control of traffic than just provision of special channels for streaming movies.

Link:  University of Minnesota [pdf].  --Dennis

CBS O&Os Get Broadband

Of CBS's 29 O&O TV stations, Will Richmond writes:

... CBS TV Stations drove 89 million video views from their own sites in '07, an average of around 8 million video views/mo from their own sites, a 71% increase over '06. It's gaining an additional 10 million video views/mo through syndication partners. The primary current contributor to syndication is Yahoo, with whom CBS TV Stations partnered in Oct '06. To put this in context, today's WSJ carried the adjacent graphic of select broadcasters' video views. Putting aside CBS TV Stations' 10 million monthly syndication streams, its '07 monthly average traffic would appear to rank it in the top 5, right around Discovery.com.  ¶  In addition, video clips are a big part of CBS TV Stations' success, as it is posting around 520/day and now offers a searchable library of 350K clips.  ¶  Meanwhile the Yahoo deal has been so successful that CBS TV Stations has clearly gotten syndication religion, with several significant announcements planned for the coming weeks. Leess explained how these syndication deals drive unprecedented consumption from out-of-market viewers while also creating valuable ad inventory. For pre-rolls, CBS is getting between $28-75 CPM, with banners fetching $8-18 CPM. Importantly, CBS TV Stations are aggressively bundling on-air/online/broadband packages, having sworn off broadband as a pure "value-add" some time ago.

Link:  Video Nuze.  --Dennis

New WiMAX variation may make it more alluring to carriers

Eric Bangeman writes:

... WiMAX is poised to break out in 2008. But one of the things that could conceivably hold it back from even wider adoption is its confinement to a relatively small slice of spectrum. That may change, as the WiMAX Forum has begun work on a variation of the mobile WiMAX spec that will allow it to operate in spectrum currently used for 3G networks. ...

Link:  Ars Technica.  --Dennis

The impact of wireless Internet on radio listening

Bridge Ratings is out with another interesting report, this one on the impact of emerging wireless Internet services (WiMax, et al.) on traditional radio listening.  It caught my eye because I've been advocating, so far without much success, marrying these devices with HD Radio to expand channels available to listeners via terrestrial radio.  This report suggests it will impact TSL of both terrestrial and satellite stations:

... By year 5 of in-car Wi-Fi acceptance, traditional radio can expect to see the amount of time spent listening to fall below 19 hours a week and by year 8 when we project that more than 23% of the U.S. public will have adopted wireless Internet technology in-car, weekly time spent listening to traditional radio will fall below 18 hours per week.  ¶  What about satellite radio? ¶  Satellite radio has found its greatest audience in-car but has the most to lose with wireless Internet radio reception. This study as well as previous Bridge Ratings studies conducted for the satellite radio industry, show that satellite radio subscribers consumer satellite radio at a far greater weekly rate than do listeners to traditional radio.  ¶  As wireless in-car becomes more accepted, weekly time-spent-listening to satellite radio will also be impacted. ...

Link:  Bridge Ratings.  --Dennis

Unlicensed broadband devices in TV spectrum "white space"

Broadcasters (MSTV, et al.) have been fighting the introduction of unlicensed broadband devices in the spectrum they occupy citing interference concerns.  Both sides have been conducting tests.  The New America Foundation's Wireless Future Program  has been an advocate for this more permissive use of the TV spectrum and it has issued a new policy brief by Sascha D. Meinrath and Michael Calabrese, The Feasibility of Unlicensed Broadband Devices to Operate on TV Band 'White Space' Withoug Causing Harmful Interference: Myths & Facts.  Link:  New America Foundation (see attached pdf).  --Dennis

Mark Cuban: The Internet is Dead and Boring

Mark Cuban has been taking on the Internet of late and this week weighed in again.  He writes:

... Every new technological, mechanical or intellectual breakthrough has its day, days, months and years. But they don't rule forever. That's the reality.  ¶  Every generation has its defining breakthrough. Cars, TV, Radio, Planes,highways, the wheel, the printing press, the list goes on forever. I'm sure in each generation to whom the invention was a breakthrough it may have been heretical to consider those inventions "dead and boring". The reality is that at some point they stop changing. They stop evolving. They become utilities or utilitarian and are taken for granted.   ¶  Some of you may not want to admit it, but that's exactly what the net has become. A utility. It has stopped evolving. Your Internet experience today is not much different than it was 5 years ago. ...

Link:  Blog Maverick. 

Update 27 August 2007:
In a follow-up post today, Cuban says The Internet Is Still Dead and Boring.  Link:  Blog Maverick.

Update 29 August 2007:
Be sure also to read broadband expert Om Malik's surprisingly supportive response, Cuban's Theory & The Internet Infrastructure Questions.  Link:  GigaOm.  --Dennis

Digital must-carry vs. faster IP-over-cable Internet access

Michael Harris makes the following proposal:

... Not surprisingly, MSOs and cable programmers continue to cry foul over broadcast digital must-carry and the possibility of multicast carriage. They well should. (See Cable's All-Upset Over All-Digital.)  ¶  But what the cable industry has failed to articulate is an alternative plan for the use of the spectrum that would be wasted under digital must-carry requirements.  ¶  Here's a suggestion. If the FCC deep-sixes digital must-carry, MSOs pledge to use the spectrum to rollout 100-Mbit/s Internet access nationwide. Move the argument into the marketplace, and empower consumers to pressure politicians still under the spell of broadcast lobbyists. ...

Link:  Cable Digital News.  I'm not advocating a position here, but we broadcasters might think about whether having a 100 mbps pipe to consumers might be better for our business model in the long run than trying to monetize more linear channels on already over-stuffed cable systems.  --Dennis

The BBC's iPlayer and ISP pushback

The BBC's current iPlayer beta has attracted a lot of comment in the blogosophere -- mostly about DRM and the Windows XP limits of the beta version -- but real story here is that ISPs in the UK have chosen this announcement as an occasion to make political points about capacity issues.  These complaints have the strong potential to be heard elsewhere in the world also as more and and bigger video files transit the Web, especially via P2P networks, legal and otherwise.  Here is a summary of stories about this development.

Jeremy Penston, iPlayer Politics: Behind the ISPs vs BBC row.  Link:  The Register.

Chris Williams, BT rubbishes BBC bandwidth throttling reports.  Link:  The Register.

Jack Schofield, ISPs warn BBC over iPlayer bandwidth use.  Link: The Guardian.  Included mostly for its links.

Bobbie Johnson, Bandwidth threat as on-demand TV grows.  Link: The Guardian.

Om Malik, Broadband ISP's Fear of the Web Video.  Link:  GigaOM.

Tim Ferguson, BBC iPlayer a Bandwidth Hog? Link: BusinessWeek.

Robert Andrews, BBC iPlayer Bandwidth Concerns - More Investment Needed, Regulator Says.  Link: paidContent.

Update 20 August 2007:

William Cooper, Broadband service providers threaten to throttle iPlayer.  Link: Informitv.

Then, to put this into some perspective, also read Om Malik's Online Video To Boost Internet Protocol (IP) Traffic.  He writes:

It should come as no surprise: the big and fat video files are one of the main reason why the bandwidth glut created by overbuilding in the telecom boom of 1990s is evaporating. The good news is that the demand for bandwidth is not going to end any time soon.  ¶  A report released by Cisco Systems (CSCO) predicts that consumer-related traffic running over IP networks is going to grow at a compound annual rate of 58 percent from 2006 to 2011, and will end up totaling 17 exabytes per month by 2011. ...

Link:  NewTeeVee.  --Dennis

IntraNets vs InterNets

Mark Cuban is in the HDTV business, among other things,  and recently wrote a provocative piece in his blog about "why the best days of the Internet are behind it."  He writes:

... What is the increase in your broadband speed THROUGHPUT over the past 1,2,5 or 10 years ? I went from about 200k in 1997 to about 800k (on a 3mbs advertised number) today. An increase of only 600k. True, its cheaper now than then, but 600k is only 600k. Most people think the throughput TO THE INTERNET of our home broadband connections will increase significantly over the next few years. It wont. Other than dropping fiber in the last mile, not much has changed in the last few years and unless you have fiber to your home, not much will change in the next 5 or more years. Face it folks, the Internet as a platform has stagnated. Its dead as a growth platform. Its like Microsoft windows. From about 1985 to 1995 it was a great platform and there was new software coming out continuously. When was the last time you got excited about a new piece of consumer software written for Windows ? Its a stagnant consumer platform. We switched to browsers for most of our PC activity. We are getting to the point where the browser on the net as a platform is becoming stagnant. ...

Link:  Blog Maverick.  Thanks to Stephen Hill.  --Dennis

The Stupidity of Spectrum Auctions in a World of SDR

The television industry is ending some 80 years of analog broadcasting in February 2009 so that spectrum it's vacating (digital television channels can be more tightly packed) can be auctioned off to help pay for all those wonderful benefits our federal government provides.  The impending spectrum auction has broadband providers and associated businesses salivating and others like incumbent broadcasters and major sports operators asserting some of their devices will cause interference (see here and here).

But some people make the case that the whole notion of spectrum is outmoded and wasteful.  Consultant Gordon Cook makes the case in a post of this title.  He writes:

... It is now possible to build software defined radios that can listen for other spectrum users in the neighborhood and fine tune their behavior sufficiently enough to stay out of each other’s way and hence not interfere.  ¶  The problem was that, even if the Republican FCC were not controlled by the duopolists, whom it pretends to regulate, we would still be shackled by the analogue based presumption of spectrum scarcity.  In a mindless effort to raise revenues for the federal government these private equity based non public good companies have paid for exclusive right to use spectrum where it was formerly thought that only a single person could ever talk in the space in a “single time slot” or frequency. ...

Link:  Cook's Collaborative Edge.  --Dennis