Americans hate cable. They hate the price, they hate the service, they hate the selection. Now there is something new to hate: cable wars with broadcast networks. The major broadcast networks have always had the option of offering their programs to the cable companies on the basis of either “must carry” or “retransmission.”
Under the FCC’s “must carry” rule, a network (through its local station) has the right to insist that the local cable operator transmit its programming. If the network does not insist, and the cable operator still wants to carry the programming, he must pay the network for the cable retransmission of network programs at a rate negotiated between the two parties.None of this mattered much for many years, but now the networks say they need those cable fees to survive.
This new desire for cash has led to the Cable Wars. The biggest so far is Cablevision vs. ABC/Disney. ABC threatened to cut off the Academy Awards 2010 show to New York City area subscribers if Cablevision did not meet its subscriber fee demands. The show is always pretty bad, but people wanted to at least have the option to see it. The war went to the newspapers where Cablevision subscribers read between the lines and saw both sides preparing them for rate increases. (We didn’t want to raise you bill but they made us do it!)
Too much has been written about this. The one guy who sees beyond it (besides me) is Holman W. Jenkins writing the World Business column on the Opinion page of the Wall Street Journal (be careful using this link, the Journal has a pay wall).
There’s no doubt the cable companies’ current business plan is doomed. (Unload your stock in the next few years.) The systems are too old to fix, the fees too high, and the three-in-one plan with VOIP phone service is about $35 a month more than Skype. (Skype is free). The only place cable companies can raise revenue is by offering you higher speeds and more content on their broadband pipes.
The broadband explosion already underway is toward video. How will a system designed in the 1960′s for military data be expected to transmit iTunes movies and Google Earth? Any plumber who ever cut costs and put in a one-inch water pipe instead of a two-inch one knows the answer: drip drip drip.
The ready solution to this cyber gridlock is expanding the bandwidth allocated to broadband wifi and mobile. This is why Google is rushing to build super speed wifi networks in cities across the country. They are counting on citizen delighted with the results pressuring the FCC to free up more bandwidth.
Where will it come from? The bandwidth hogs are the over-the-air TV stations who have been hoarding bandwidth since the analogue days when they needed lots more of it than they do with new digital transmission. The easy answer to the coming download doomsday is to snatch this unused reserve bandwidth and award it to wifi and mobile.
But the Internet is still as fast as the slowest part. If packets are routed to Venezuela on their way to New York, “loading” will mean “slow” in two languages. The longer view solution says we should modify the way digital video is delivered to portable devices so that it can use a wider spectrum. The old word for that spectrum is Television.
In the future, TV will send packets rather than programs, and mobile receivers will filter these to give you only the movie you want, just like broadband Internet. “As fast as the slowest part” will no longer apply. But getting there takes vision; and a lot of courage not to give in to the technology of the near moment at the expense of the technology of the farther future.
In the 1960′s, Los Angeles dug up a magnificent interurban rail system and replaced it with roads. Cars were faster and did not need rails. In the 1990′s Los Angles began the expensive process of re-acquiring and re-railing the old rights-of-way to put in a new interurban rail system. Now rails are faster than cars. Think what they could have saved by just leaving things alone for thirty years?