Time Warner Backing Off Usage Caps

Light Reading has published an article that states that Time Warner has shelved plans to extend its trial of usage caps currently underway in Beaumont, Texas to Rochester, N.Y.; Greensboro, N.C.; and San Antonio and Austin, Texas. Take a look a my previous posting to get information on the Beaumont trial.

Apparently, Time Warner is bowing to public and political pressure. It continues to believe in usage caps and believes that it needs to better educate its users.

Personally, I think usage caps and usage charging will not be accepted and is a tool that Time Warner is using to quash competition from over the top Internet TV services.

Time Warner Modifying Usage Caps

Light Reading published an article describing how Time Warner is modifying its usage caps and another article listing the usage caps both Time Warner and ATT are offering in Beaumont, Texas. Time Warner is offering a higher tier that offers a higher usage cap.

These caps range from 5 GB per month to 150 GB per month.

It is always interesting to calculate how much HD TV viewing that these caps will permit. A cap of 10 GB permits less than 3 hours of HD viewing in the month. A cap of 100 GB permits less that 1 hour of HD viewing per day and a cap of 150 GB permits less that 1.5 hours per day.

Clearly these caps will discourage the use of the broadband service to deliver video to the TV. This is certainly a way that the telcos and the cable companies can keep their customers on their own TV services and away from over the top Internet TV services.

Liberty Global Interview

Light Reading has published an interview with Liberty Global that discusses the advantages of cable over IPTV in the European context. It sees that DOCSIS 3.0 gives it a large advantage over ADSL technology along with its long experience delivering video content.

These are good points but IPTV is giving cable a real run for its money in countries such as France and Belgium. IPTV is in a much stronger position in Europe than it is in most parts of the U.S.

Cox Traffic Management Strategy

I have made a post on my Telco 2020 blog on Cox Cable's strategy for managing traffic on its broadband network. Its approach makes a lot more sense than the monthly usage caps that other operators are adopting.

Digital TV Delayed in the U.S.

The U.S. has delayed the analog sunset from February 16 to June 12. I have also written about this on my Telco 2020 blog.

This will not have much effect on the IPTV or even the Pay TV market in the U.S. Any increase in subscribers due to the analog sunset will be more than matched by losses due to the current recession.

FCC Questions Comcast VoIP

I have made a post on my Telecom 2020 blog that discusses a letter sent from the FCC to Comcast questioning its VoIP strategy. The FCC is questioning why Comcast's cable telephony service should be treated as an Internet VoIP service and be exempt from normal voice service fees. The FCC is concerned because Comcast's cable telephony service is not subject to Comcast's video traffic management system used on its cable modem service.

It will be interesting to see what happens with over the top Internet TV services, which will be subject to similar restrictions. If you read the FCC letter, you will see that watching a TV program at full resolution is likely to cause Comcast's traffic management to make the program unviewable after 15 minutes.

Microsoft Cable DOCSIS Deployment in China

The Guangzhou Digital Media Group will use Microsoft's Mediaroom IPTV software to provide IPTV service over its cable system using DOCSIS cable modems. At the launch of the service, Guangzhou will provide HD content for broadcast, recorded, and on demand viewing along with NPVR services. It will also offer a range of interactive services:

• Access to local news with information from government web sites displayed on TV.
• Local sports and entertainment news lets viewers watch video clips, view pictures, vote on favorite shows and check text messages via the TV.
• Local government e-mail service enables subscribers to view e-mails sent out by local government.
• Information service allows subscribers to check their local social security information.
• TV commerce permits customers to pay their phone bill or traffic tickets through the TV.

Guangzhou Digital Media Group, formerly Guangzhou Radio and Television Network Limited, is the largest cable TV operator in Guangzhou City. Guangzhou Digital Media has about 2.5 million cable TV subscribers, with about 1 million broadcasting digital TV subscribers.

This deployment shows another tool that the cable companies have to combat Telco IPTV services. The cable companies can offer IPTV services using cable modem technology. This approach makes a lot of sense with DOCSIS 3.0, which can offer 100 Mbps services.

DOCSIS 3.0 is Cheap

An article on Light Reading cited a statement by Charter Communications that it will cost about $8 to $10 per subscriber to bring DOCSIS 3.0 services to a home, including the new cable modem termination system (CMTS) equipment and the routing systems. It does not include the cost of the new DOCSIS 3.0 cable modem or the cost of provisioning the service.

Verizon has said that it costs them $800 to $1,000 per home to make its FiOS fiber service available with a maximum 50 Mbps data service today. The cable companies can accomplish the same thing for one percent the cost. DOCSIS 3.0 will provide the cable companies a strong defense against FiOS and be a very strong offensive weapon against ATT's VDSL U-verse service.

Comcast Starting Digital Conversion

Comcast has started the process of converting their analog subscribers to digital. It plans to offer free digital terminal adapters (DTAs) capable of supporting video on demand. Comcast will also give existing digital customers up to two DTAs at no additional cost. The company is charging $1.99 for each DTA a customer wants above that limit.

It has been clear that the cable analog subscribers are those that are most likely to move to Telco IPTV services. Cable subscribers that are considering a digital service must bring in a set-top box. That is a natural point to consider moving from cable to satellite or Telco IPTV services.
Comcast will reduce the likelihood that it will lose customers by converting them to digital with these low cost adapters.

Cox Cable to Offer Wireless Bundle in 2009

Cox announced that add a wireless component to its bundled offering that includes TV, high speed Internet, and telephone services today. Cox will utilize Sprint's wireless network to enter the market in 2009. At the same time, Cox is building its own 3G wireless network for additional market launches in 2009. Cox will also test 4G technology utilizing LTE. Cox acquired 700 MHz spectrum in about 10 areas in the U.S., including Los Angeles, Phoenix/Tucson, Las Vegas, New Orleans, and Atlanta.

Cox partnering with Sprint is no surprise since it is one of the partners in the Clearwire deal. However, its strategy is not clear. It seems to be creating an offering with a large set of incompatible technologies. It will be interesting to see how Cox weaves all of this together in a way that makes sense to its cable customers. There is no compatibility between CDMA, WiMAX, and 3G. It does not seem likely to me that they will find any handsets that can support all of these serves.

Comcast Defines Net Neutrality

Light Reading has published an article detailing Comcast's plans for providing net neutrality to its broadband customers. Its approach is based on throttling back the performance of the service to users that habitually use large amounts of bandwidth.

Comcast will continuously monitor aggregate traffic usage data for individual network segments. If overall upstream or downstream usage exceeds a predetermined level on a segment, the software then determines which customers are using a disproportionate share of the bandwidth. If certain subscribers are the source of high volumes of network traffic during those customers temporarily will be assigned a lower priority status.

This approach seems to be a blunt tool. Why penalize customers as the first line of defense. Each application has different response time requirements, why not manage traffic to maintain response times within these limits and go after high volume users only when these techniques cannot cope with the loads.

This is a measure of the confusion around this issue. The FCC has not shown that it understands the issue or that it is capable of doing any more than responding to political heat. Hopefully, it will get sorted out over time.

DOCSIS 3.0 Appearing in Europe

Liberty Mutual in the Netherlands and ONO! in Spain have introduced DOCSIS 3.0 cable modem services at speeds of 50 to 100 Mbps. The price of the service ranges from 60 to 80 euros per month. Liberty Mutual said that it plans to introduce DOCSIS 3.0 in the rest of its cable systems across Europe.

This is a strong counter to the inroads that the Telco IPTV services are making in Europe. The DOCSIS 3.0 services have premium prices and premium performance. I think that the same approach will be used in the U.S. with DOCSIS 3.0.

Comcast to Limit Internet TV

Light Reading published and article describing that Comcast will impose a limit of 250 gigabytes per month starting October 1. This threshold will apply to less than 1 percent of its high speed Internet subscribers, since the median residential usage is 2 to 3 Gbytes per month.

This limit seems reasonable for the web browser, even the person who uses a lot of Youtube. However, this limit will permit only about 2 hours a day of HD TV viewing. This means that Comcast is limiting the ability of its high speed data to access over the top TV services that compete with its cable service. This seems to me to be anti competitive. It will be interesting to see how the FCC reacts to this, especially as Internet TV becomes more popular.

Cablevision Wins NPVR Ruling

Lightreading published an article about Cablevision winning an appeals court ruling that supports its NPVR service. The ruling allows Cablevisiion to offer its NPVR service that was blocked by a law suit by major U.S. TV networks and film studios. Cablevision has not announced any plans to restart the service.

This ruling is subject to an appeal to the U.S. Supreme Court. NPVR is a key feature for the cable and Telco IPTV services in the U.S. NPVR is needed to bring the personalization that viewers get from the Internet to the TV. It will also have a profound effect on the networks that support IPTV services.

JCom to Deploy DOCSIS 3.0 in Japan

A Light Reading article describes statements by J:COM, a leading cable provider in Japan, that it plans to fully deploy DOCSIS 3.0 across its network by the end of July 2008. The service provides downstream speeds of 160 Mbps and upstream speeds of 10 Mbps at $60 per month, which is $5 per month higher than its DOCSIS 2.0 service at 30 Mbps downstream. It already has about 30 thousand customers for this service.

J:COM has about 2.8 million subscribers and passes 10 million homes in Japan.

J:COM is taking a much more aggressive approach than the U.S. cable companies with DOCSIS 3.0. Comcast only offers DOCSIS 3.o in the Minneapolis area with a downstream speed of 50 Mbps at $145.99 per month.

The regulatory regimes in many Europe and many countries in Europe have been much more effective than the FCC's approach in the U.S. People in these countries get much higher speeds at lower prices than are available in the U.S.

The U.S. approach has been to pit the cable companies against the Telcos. The problem with this is that they are both entrenched monopolies whose first priority is to protect their own business rather than to compete aggressively with each other. This leads to a cautious rollout of new services. This is why I have been saying that DOCSIS 3.0 will roll out slowly in the U.S. as a high priced premium service.

New Cable IPTV Option

I met with Verimatrix yesterday and they told me about their partnership with with GoBackTV to provide an IPTV video option for cable providers. GoBackTV provides a system that uses DOCSIS cable modem technology to carry broadcast or on demand TV programming to an IPTV set-top box in the viewer's home. Verimatrix is providing content protection for both broadcast and on demand content delivered over this system.

This system can use MPEG-4 which is more efficient than the MPEG-2 that the cable systems typically use. It also can use IP Multicast across the links to the IPTV set-top boxes so that only one packet stream is sent for each broadcast channel viewed.

Verimatrix said that this system is well adapted to smaller cable companies with 550 MHz plants because it provides the ability to do IPTV switched digital more efficiently than the typical architecture.

This is an interesting approach that should appeal to the smaller cable operators. It does require a separate set-top box and two set-top boxes for the home that watches both the IPTV and the standard cable content. It is one more technology alternative for cable companies that need to upgrade their service to compete with Telco IPTV and satellite TV services. TelecomView's new report U.S. Cable: New Strategies for a Competitive World describes a number of other technologies available to the cable companies.

Comcast's new Addressable Advertising Trial

Comcast is preparing a second and larger trial of its addressable advertising technology that will include 8,000 homes in the Baltimore area. This technology provides the ability for the set-top box to select the most appropriate of a group of ads that are provided for a particular spot based on a demographic profile of the home.

Comcast appears to be serious about this form of targeted advertising to blunt a key advantage of IPTV systems. IPTV has more flexibility since it is not limited by the spectrum limitations that the cable systems have to face.

TelecomView Report on U.S. Cable Strategies

TelecomView issued a report U.S. Cable: New Strategies for a Competitive World that discusses the options that the U.S. cable companies have for responding to the increased competition from satellite TV and the new IPTV services from Verizon, AT&T, and the other U.S. Telcos. It discusses the technical options that have to increase the capacity and efficiency of their cable plants. It also discusses the options that these companies have for entering and expanding their presence in other markets that are dominated by the Telcos today.

In particular the report discusses strategies for entering the wireless industry. This is the most important and most difficult problem that the U.S. cable companies face. We believe that the cable companies have to enter the wireless business to remain competitive with AT&T and Verizon.

There is a white paper that can be ordered from our website that describes the issues covered by the report.

Comcast's Targeted Ads

Light Reading published an article describing trials of targeted ad technologies that Comcast is running. Comcast is using technology from OpenTV that sends four ads to the set-top box, which selects which ad will be shown to the viewer based on anonymous demographic data.

This is an interesting approach that fits the spectrum limitations of a cable network. A telco IPTV network can use a similar approach without a limit on the number of ad choices. This is another way that cable companies are developing technologies to address advantages of IPTV deliver.

SCTE Launches Fiber Standards Project

The Society of Cable Telecommunications Engineers (SCTE) launched a standards effort for its RF over Glass (RFOG) project. RFOG will include a range of interfaces that enable new FTTP networks to interconnect with the cable operator's HFC network. Some of the RFOG project will involve specifications for passive splitters and directional couplers, gateway RF levels, gateway environmental requirements, and fiber-optic passive filters. It will also ensure that traditional digital set-tops and DOCSIS modems can run on FTTP plants managed by cable operators.

This is additional alternative that will improve the ability of cable companies to compete with the telcos. Home developers are showing a preference for fiber broadband rather than cable coax systems. RFOG will give the cable companies the technology to respond to these requests.