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.

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.

FCC Orders Comcast to End Discriminatory Traffic Management

The U.S. FCC required Comcast to end its traffic management practices that discriminated against peer-to-peer traffic and BitTorrent in particular. The company has 30 days to:

• Disclose the details of its discriminatory traffic management practices to the Commission
• Submit a compliance plan describing how it intends to stop these discriminatory management practices by the end of the year
• Disclose to customers and the Commission the traffic management practices that will replace current practices

This is an important aspect of the Net Neutrality argument. I believe that the crux of this issue is that broadband operators must take an even handed approach to how they manage traffic. They should not use these techniques to play favorites or to improve their own market position.

Cable Channels Object to a la Carte Programming

Light Reading published an article describing the reaction of the major U.S. cable networks to the FCC Chairman's proposal for a la carte programming that operators should be allowed to strip from expanded basic tier any network that required a monthly carriage fee of 75 cents per. The position of the cable networks is that this will raise the cost to the subscriber and, consequently, hurt consumers.

Both the FCC and the cable networks should take a good look at Manitoba Telecom's (MTS) IPTV content strategy. It breaks the premium channels down into small groups of three to five channels. Each subscriber decides which set of groups that they want to receive. MTS's has found that its customers really like its approach. They spend the same as they do with more structured offerings, but they get a much more useful set of channels for their money.

Verizon to Eliminate Analog Tier

Verizon will eliminate its analog tier by the time of the U.S. analog switch off on February 19, 2009. It will start by eliminating its analog tier in New York by April 21. Verizon received a waiver from FCC requirements to provide integrated security set-top boxes on the condition that it convert its offering to 100 percent digital by the analog switch off date.

Verizon has had a very low take up of its analog only offering, so this should not cause a big disruption to its FiOS TV customer base.

FCC Requires Open IPTV

In a recent ruling that gives waivers to smaller cable systems for rules that require open set-top boxes, there is a footnote that requires an open security system for U.S. Telco IPTV providers that permits interconnection by consumer electronic devices by July 1, 2008.

The U.S. IPTV providers stated to the FCC that their security systems were already open. The FCC has not yet decided that this is or is not the case.

This could be a real problem for the U.S. IPTV providers. Every IPTV content security system is proprietary and based on a single company's system. The IPTV industry has not developed an interoperable standard such as the Cable Lab's cable card that can be used across systems. It is clearly not feasible for consumer electronic companies to deploy all of the proprietary content security systems that the U.S. IPTV providers are using in their products. There has to be a single standard that they can implement.

FCC Pushing Cable Companies to All Digital

In a ruling today, the U.S. FCC gave relief against the requirement that banned set-top boxes with integrated content protection on the condition that these companies convert to all digital by February 17, 2009. This ruling effects some IPTV providers such as Verizon and Qwest for its IPTV trials in Phoenix and Denver. The purpose of this ban is to open up a competitive retail market for set-top boxes. The conversion to all digital will free up spectrum and permit new services to be offered.

This is bad news for the IPTV providers in the U.S. such as AT&T and Verizon. Forcing the U.S. cable companies to go all digital will give them a significant amount of spectrum that they can use for DOCSIS 3.0 services, IPTV, and interactive TV. This will make the U.S. cable companies that much more competitive with the IPTV services.

U.S. FCC Addresses MDUs

The U.S. Federal Communications Commission (FCC) ruled that competitive video providers must have access to the inside wiring in multiple dwelling units (MDUs) at the terminal block in order to provide video services. It also ruled that wiring behind sheet rock is considered to be inaccessible as is wiring behind brick or cinder block. Consequently, competitive video providers should not be forced to cut into sheet rock to provide service.

This ruling will help ATT and Verizon to offer their IPTV services in MDUs where the cable companies are already established. This is particularly important t0 Verizon that serves a large number of MDUs in New York City and other large Eastern cities.

FCC Rules on Video Franchising

The U.S. FCC found that the current operation of the local video franchising process in many jurisdictions impedes cable competition and accelerated broadband deployment. Local video franchising has been raised as an issue by AT&T and Verizon in their efforts to deploy IPTV networks. These companies have to acquire a video franchise from each local government that they plan to serve. This requires thousand of separate agreements, which is an expensive and time consuming process.

The FCC addressed drawn-out local negotiations with no time limits, unreasonable build-out requirements, unreasonable requests for “in-kind” payments that attempt to subvert the five percent cap on franchise fees, and unreasonable demands with respect to public, educational and government access (or “PEG”).

The full text of this ruling can be found at http://www.fcc.gov/

It is interesting that the FCC did not fundamentally change this local video regulatory system. It made adjustments that reduce the flexibility available to the local authorities. This all seems quite reasonable. The only real issue that we have is that it reduces the ability of the local authorities to get certain benefits such as providing service to schools and libraries that can provide significant public good.

What this ruling did not do is move this regulatory authority to the states or to the Federal government. A number of states such as Texas and California have already moved this authority to the state level.

While this will help AT&T and Verizon, it still forces them to slog through the video franchise process one local authority at a time. Verizon had accepted this requirement and has been working through it. AT&T has been fighting against it and will have to comply.