With the heavy coverage of the Democratic Convention in Denver, I’ve read a few stories that talk about how viewership of the event is off.

For example, there is a chart in the Washington Post today entitled “TV Ratings Drop.” But they mean “network television ratings,” by which they mean ABC, NBC, CBS.  But that’s completely the wrong metric.  In addition to the Big Three and PBS, you can watch convention coverage on C-SPAN, CNN, Fox News, MSNBC, and even BET and TV One.

Here’s the story in TV Week: Cable News Networks Reap Political Ratings. In B&C: Cable Adds Viewers on Day Two. This AP story notes that CNN beat ABC and CBS during the broadcast of Michelle Obama’s speech during the 10:00 p.m. slot. And cable news viewership was way up over 2004, according to TV by the Numbers.

I mentioned this in July, during a discussion of the Emmy nominations,  but it’s always worth noting that people now turn to cable television very frequently to serve their needs for entertainment and information.

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When it comes to politics and cable, I don’t think anyone would disagree that C-SPAN is the jewel in the crown. I mean no disrespect to the fine work done by the various cable news networks, but C-SPAN started their coverage of this election (”Road to the White House 2008“) in December of 2004 and has shown somewhere around 5,000 hours of coverage so far.

C-SPAN has been advertised as “Cable’s Gift to America,” since it was created by cable companies as a public service in 1979 (contrary to the mistaken belief by some that C-SPAN is the Government Channel). Over the last three decades, “the political network of record” has now grown to three public affairs television networks, a radio station (also available on XM), and a website — all provided for through the support of the cable industry.

(Let’s recall that, in most instances, your local cable company pays a carriage fee to the programmer in order to bring you your favorite channel. Cable programmers have dual revenue streams — carriage fees & advertising — which is one of the reasons that a la carte would be harmful to them.)

C-SPAN, like other cable programmers, has been moving into the digital arena. As we enter the Academy Awards seasons of politics, with the Democratic Convention starting on Monday and the Republican Convention following the week after, C-SPAN has unveiled the Convention Hub.

This pair of portals (one for Denver and one for Minneapolis) includes a variety of features:

• Real-time tracking of credentialed state and national political bloggers, aggregated on the websites, to enable users to follow the latest online convention news and analysis;
• Video clips from the network’s convention coverage, embeddable, to facilitate use by political bloggers and other convention watchers;
• Linkable access to the complete C-SPAN Video Library, allowing interested users to fully search all C-SPAN video content;
• Live coverage of C-SPAN television and radio networks;
• Blogger Tips and Online Convention Video Finder tools;
• Real-time feeds from Twitter users using the hash-tags #RNC08 and #DNC08

New Media Strategies (NMS), an Arlington-based online intelligence and marketing firm, was brought on to design proprietary software technology for Convention Hub. C-SPAN maintains editorial control.

All this is on top of C-SPAN’s usual excellent election coverage, which will begin each morning with Washington Journal at 7:00 AM (ET) and run through the closing of each day’s floor proceedings. In addition, C-SPAN 2 will bring you events like live coverage of the Republican Platform Meetings and Ron Paul’s Rally for the Republic.

C-SPAN has expanded its traditional television coverage with the technological approaches in order to attract new viewers. C-SPAN’s loosening of copyright restriction over the past few months (embeddable video is new for the conventions) is enabling bloggers to use C-SPAN content in creative ways and helps to expand C-SPAN’s core mission to educate and inform the American populace.

But it’s important to realize that all this coverage may be a gift, but it ain’t free. It costs money to run C-SPAN’s operations and the support of cable operators is a critical part of the network’s success. Despite some criticism (like this), it’s important to remember that C-SPAN is a business, not a government program. This NY Times story makes the case:

In May, C-Span said that it had for first time asserted its copyright against a video-clip site, ordering YouTube to take down copies of Stephen Colbert’s pointed speech in front of President Bush at the White House Correspondents’ Association dinner. Clips of the speech had been viewed 2.7 million times on YouTube in the 48 hours before it was taken down.

“What I think a lot of people don’t understand — C-Span is a business, just like CNN is,” [C-SPAN Corporate Vice President & General Counsel Bruce] Collins said. “If we don’t have a revenue stream, we wouldn’t have six crews ready to cover Congressional hearings.”

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Robb Topolski recently penned a critique of metered pricing in which he takes issue with Internet connection speeds in an argument based on Moore’s Law. His thesis:

Moore’s Law, and its corollaries, all indicate that technology grows cheaper, or its capability increases, by a factor of two every 24 months or so. Networking technology is no different. Has your broadband bill gone down by half? Is your ISP bringing you about twice the speed and capacity than it brought to you two years ago? If not, then its a good bet that your ISP’s costs of delivering the same level of service to you have dropped during this time and they simply would rather not increase the network’s capacity as fast as you would like them to.

Moore’s Law, by way of background, has nothing to do with broadband connection speeds. It isn’t even a "law" as much as a collection of articles dating back to 1965 that taken together form "the law”.  The closest thing to a concrete statement of the principle comes from an April 1965 Electronics Magazine article:

For simple circuits, the cost per component is nearly inversely proportional to the number of components, the result of the equivalent piece of semiconductor in the equivalent package containing more components. But as components are added, decreased yields more than compensate for the increased complexity, tending to raise the cost per component. Thus, there is a minimum cost at any given time in the evolution of the technology. … The complexity for minimum component costs has increased at a rate of roughly a factor of two per year (see graph on next page). Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000.

In 1975, Moore changed his theory from one year to two years. However, he never attempted to apply it to networks. While some technologists have since attempted to apply "Moore’s Law" to just about everything (the "corollaries" Topolski mentions), there is no accepted "law" that dictates the doubling of broadband speeds every two years.

In other words, Topolski is attempting to make up a new theory to justify his policy positions.

However, even if Moore’s Law did apply to Internet connection speed, Topolski would still be wrong. He falls victim to the same arguments that cripple anti-global warming arguments - it takes one data point in a series and attempts to extrapolate it to a larger trend.

You can’t say global warming doesn’t exist just because it’s particularly cool today. It just doesn’t pass the smell test. Topolski’s theory, however, attempts to do just that.

If you look at the larger history of Internet connection speeds - rather than one two-year period - you’ll see that they have steadily increased. Rather than looking at one data point as Toploski suggests, you should view Internet connection speeds over time.

Verizon illustrated this point with a recent post on their site that looked at the history of capacity and speed development in internet connections. I have borrowed for the table below, their starting point of 300 baud modems in 1979. I think that is a reasonable point at which we can begin our discussion.

Using Topolski’s “Law” of Doubled Internet Connection Speeds, I will fill in, starting in 1979, what the "doubled" speeds would be equal to, and the commercially available speeds (either based on early modem speeds or offered broadband speed) over that same period of time.

If you look at the increase in capacity at the consumer level over the last 29 years, you’ll see that Topolski’s argument is in error. In fact, Internet connection speeds in the US have kept pace with the upward projection over the past three decades.

Will that trend continue? That’s difficult to say. If you assume that Internet connection speed as a broad category is the appropriate metric to use (as opposed to a particular type of connection) it’s likely that advances in technology will continue. Whether a particular technology scales up is a different question. The telephone companies found that they could increase the capacity of DSL lines only to a certain point due to the capacity of twisted pair copper wire. They began fiber deployments to increase their speeds and are currently offering 20Mbps connections where they have upgraded their capability.

Cable companies have begun the rollout of wideband modems with speeds up to 50 Mbps (a speed Topolski’s imaginary law dictates should not be achieved until 2014-2016.) Further, the channel bonding technology that enables those speeds is not limited to 50Mbps. Channel bonding can provide speeds well in excess of 50 Mbps because each bound channel is the equivalent of roughly 40 Mbps. The speed limit announcement at last years Cable Show was 160Mbps.

Under Topolski’s "Law", we should not achieve 160 Mbps until 2017-2018.

Does everyone have access to a 20 Mbps or 50 Mbps connection today? No. But Moore’s Law also never claimed that the moment a capacity doubled it would be instantly available to everyone.

As an example, not everyone had a 56k modem the moment they were available. In fact, at the time 56k modems were rolled out, the capacity had increased, but a fight over the modem standard that should be adopted delayed widespread adoption for some time. In other words, real world business decisions impacted the adoption despite the availability. Early adopters paid a premium and settled for modems that were often incompatible with their ISP until the v.90 standard was announced.

Similarly, there is not a single cable infrastructure. Different companies run on different networks and prioritize investments in those networks based on usage and cost. Business decisions still drive availability and adoption regardless of what may be technologically possible. Are most cable customers able to access the Internet at 5 Mbps (the Topolski’s "Law" suggestion for where we should be today). For the most part, yes. Again, though, different companies invest in upgrades to their network at different rates.

The fact is Internet connection speeds are increasing, prices are generally flat or declining, and all of this is being done despite what Topolski’s improper application of Moore’s Law would suggest should be the case.

Popularity: 13% [?]

Earlier this week, Google’s Chief Internet Evangelist Vint Cerf said something that brightened my day.

…the real question for today’s broadband networks is not whether they need to be managed, but rather how.

We couldn’t agree more, since I’ve expressed that same sentiment once or twice or thrice. Network managers know that networks need to be managed. Cerf even explained why:

Network capacity (bits per second or data rate) is a limiting factor in all communications networks. Users cannot send traffic faster than the amount of network capacity available to them. But when users’ aggregate demand exceeds the available capacity of the network, network operators naturally seek to manage the traffic loads… The end result is the potential for traffic congestion, leading to service delays and even outages for consumers.

Cerf then goes on to discuss various methods, such as transmission rate caps, low latency prioritization and bandwidth constraints, but they’re all based on that phrase: “…not whether [networks] need to be managed, but rather how.” [Emphasis added.] I take great interest in these remarks, because I’ve been following his arguments over the last couple years.

For example, back on June 13 of 2006, he appeared on Public Radio’s The Kojo Nnamdi Show. You can find that episode online; if you skip ahead to about 23 minutes in, you can hear Cerf speak of net neutrality for a few minutes. At that time, he argued that innovation will be stifled and users will not be able to freely access content unless the Internet is kept “open and neutral.” He said that the government may need to provide protection. Two years later, it’s unclear what innovation was stifled.

By October of 2007, Cerf was speaking of other concerns, such as at his address at the WebbyConnect conference, which I attended. He said in his speech that “net neutrality” as a phrase has been distorted and that he would clarify what Google was asking for.

• It’s okay to charge for higher capacity.
• It’s okay to address denial of service attacks, viruses and so on.
• It’s okay to provide low latency services.
• As long as all of these practices are done in a non-discriminatory fashion.

Even at this point, Cerf was arguing that network management was necessary, but he had his opinion about what methods ought to be used.  That approach is much better than comments (like this one) that argue that the “management” argument is a scare tactic. There are those who would claim we should just build a bigger pipe. But then you read this quote from a Singapore ISP executive: “Even buying more bandwidth will not work since stuff like BitTorrent is designed to gobble whatever extra bandwidth we buy.”

Cerf specifically mentions that conversations with Comcast engineers have led him to a better understanding of the underlying motivation and rationale for that company’s network management decisions. As we often see, when people examine the capacity constraints we face and the unique challenges of running cable systems, it can contribute to the conversation.

Now that Cerf has confirmed that network management is a fact and a necessity, we can begin to have the broader dialogue about the network management that needs to take place. Cerf argues the “how” of network management is the important piece of the puzzle, but I would suggest the “who” is even more critical – as in, “Who decides what network management practices are reasonable?”

Cerf argues that government should. I think that is the wrong approach. I think it makes more sense for engineers and companies to make those decisions, not government bureaucrats. Those decisions should be based on what methods of network management might be most efficient and which ones would provide the best experience for the largest number of their customers. They should not be based on the dreams and schemes of politicians.

I recently heard one of these people describe network congestion as akin to a mail truck being full. This kind of talk makes my head hurt.

I shudder to think of the regulations that would be dreamed up by the US Department of Network Management.

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There’s an interesting little item up today over at the FreeStateFoundation Blog.  It’s been giving us all a little chuckle, and we thought we’d share it.

 The FCC’s website contains the following statement: “The FCC does not regulate the Internet or Internet Service Providers (ISP).” Check it out for yourself here.

While the import of this statement has been “degraded” and “impaired” in various ways over the last couple of years, the FCC’s action last week sanctioning Comcast in the BitTorrent affair certainly now renders the statement, to put it nicely, inoperative. Or you could say inaccurate or false. You could find other similar declarations, but this one in the Commission’s news release indicates the extent to which the agency’s website statement is inaccurate: “The Commission announced its intention to exercise its authority to oversee federal Internet policy in adjudicating this and other disputes regarding discriminatory network management practices with dispatch…”

In the interest of accurate disclosure, I assume the FCC fairly promptly will correct the website statement. Perhaps in the interest of the fullest possible disclosure it will even provide a link to the Comcast order.

According to a note at the bottom, the page which disclaims the FCC’s non-involvement was last updated on July 10, 2008.  If nothing else, the dramatic reversal in position over the last 27 days should demonstrate how fast technology moves.

A tip of the hat to the FreeState gang for pointing this one out…

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In the last few months, a number of blogs have written about “a la carte” consumption of content as a cost-savings measure. In these tough economic times, managing your entertainment and information budget is certainly a good idea. But much of the discussion I’ve seen fails to note that this approach isn’t going to work for everyone.

For example, in early June the I Will Teach You To Be Rich blog argued in favor of cutting down on unneeded subscriptions: “Instead of paying for a ton of channels you never watch on cable, buy only the episodes you watch for $1.99 each off iTunes.” (Also see the discussion of this tactic on Lifehacker.) You also often see people talking about how little cable television they watch.

• The Short Bus: “After all, I only watch about 5 or 6 channels - none of them are a major network.”
• jetdawgg at Leatherneck.com forum: “Frankly, the only Time-Warner channel I REALLY want is Turner Classic Movies. Maybe a couple others.”

I’ve also seen people argue that they only watch a couple of cable series. And if you’re a low-level consumer of such content, perhaps this makes sense. More and more television programming is available online, either as free streaming video or available for purchase on an a la carte basis via services such as iTunes or Unbox. Some have asked if Apple TV could be a replacement. As the supply of broadband video grows, the theory goes, consumers can turn to an online supply of a la carte video to satisfy their needs, saving money at the same time.

So, let’s run some numbers. According to estimates from SNL Kagan, the Average Monthly Price for Expanded Basic Programming Packages (2007 estimate) was $42.76. You can buy some television programs on iTunes for $1.99. Once you’ve purchased 21 or so shows at two bucks a pop, you’ve now matched the price of expanded basic cable service. At that rate, you could watch one show each weekday night, but you’ll have to take the weekends off. But if you want to watch more than that, then subscribing to cable makes more sense.

Another measurement is to take the average basic cable rates from SNL Kagan and divide it by average basic cable network viewing time from the Cabletelevision Advertising Bureau to obtain the Average Price Per Viewing Hour, which was 24.5 cents in 2006 (see an explanation of PPVH here). Since a typical hour drama can be purchased on iTunes for $1.99 - which makes their Price Per Viewing Hour about 8 times more. Keep in mind that a half-hour show also costs $1.99, making the PPVH for fare like Family Guy and South Park even higher.

Naturally, there are a couple of built-in assumptions to the a la carte argument: how little TV you will watch and how much cable programming you can get online. A recent Nielsen report on TV, Internet and Mobile usage found that the average American is watching 127 hours, 15 minutes per month. To watch that amount of video at $1.99 per hour would cost more than $250 per month. And if half of those shows were half-hour sitcoms (also at $1.99) the monthly bill would come in at $380. The people above who are quoted as watching so little television fall well below the average.

What’s interesting about the discussion of this topic is that there’s an assumption of how much video is watched online by consumers. Sure, there are certain groups who watch a ton of video online and watch little, if any, cable TV. But that Nielsen study found that Americans are not only using the Internet more, but are watching even more television. You might think this doesn’t apply to young people, but the Nielsen study says that 18-24 year olds are watching over 103 hours a month, and a recent study from Alloy Media + Marketing found that 38% of college students aren’t watching online video at all.

This is not to say that there’s not growth in broadband video. For example, 37 million episodes were watched on ABC.com’s video player during the month of May, or a total of 815 million minutes of full-length content.. There’s a good deal of broadcast programming online. But your local news isn’t available online. And while some cable programming is available, much of it is not. Will Richmond explored this issue and explained the importance of cable programmer’s dual revenue model.

Finally, the study of economics demonstrates that people’s mental states can affect their perception of this equation. You may think a subscription makes more sense because you pay once and get a lot. If you consume less than you think, a subscription approach might not be right for you. But when it comes to consuming television, consider your cell phone.

Remember a few years ago when cell phones were new? You got one and selected a simple plan, because you were only going to use the phone for emergencies. And then you got in the habit of using the device, because it’s so convenient, and then your bill went through the roof. Today, it’s smart to get a plan with a lot of hours or unlimited texting or some other pricing system that’s economical. Similarly, if you truly only watch a very small amount of cable TV, and if your favorite program is available in some other form, then it might make sense to purchase your video programming by episode. But if you watch an average amount of television, which is more than 4 hours a day according to Nielsen, then one of cable’s various packages (basic, expanded basic, digital, etc.) definitely makes more sense.

UPDATE:  I just noticed that this January post during CES touches on many of these same issues.

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Coverage of today’s meeting and some reaction to the decision…

• Richard Bennet of Broadband Politics: A sad day for the Internet
• Randolph J. May of the Free State Foundation: Hard Cases Make Bad Law: On Regulatory Bits and Torrents–Part II
• Barbara Esbin of The Progress & Freedom Foundation: Legally and Procedurally Suspect and Misguided as a Matter of Policy
• Scott Cleland of The Precursor Blog: Takeaways from FCC Decision on Reasonable Network Management
• Cynthia Brumfield at IP Democracy: FCC’s Copps: Apply Net Neutrality Principles to Wireless Carriers
• Stacey Higginbotham at GigaOM: FCC Punts on Network Neutrality
• Matthew Lasar at Ars Technica: Reactions to FCC’s Comcast decision come fast and furious
• Drew Clark at Broadband Census: FCC Hammers Comcast For Deception and Unreasonable Internet Practices

UPDATE: Will Richmond at VideoNuze: The FCC’s Comcast Sanction: More Problems, Fewer Solutions Ahead

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During an Opening Meeting this morning, the FCC issued an adjudication in the matter of “Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer Applications.” The FCC said that Comcast’s “degrading” of certain Internet content was in violation of “federal policies” and were against the policy of reasonable network management.

In response, the NCTA  has released the following statement from Kyle McSlarrow, our President & CEO:

“One need look no further than today’s FCC decision for proof that engineering challenges on the Internet should be solved by engineers, not government officials. In second-guessing reasonable network management techniques (with no notice or guidelines in place) that benefit the overwhelming number of broadband subscribers in America, the FCC has inexplicably elevated the interests of a few bandwidth hogs over everyone else.”

As we further digest the decision, we will be following the reaction from others in the telecom policy sphere and will comment further and share what others are  saying.

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Given the FCC approval of the XM – Sirius merger, and the release of the “voluntary commitments and other conditions” that sealed the deal, one natural question that has arisen is “If satellite radio can do a la carte, why can’t cable providers do it?”

The answer, of course, is buried in the details.

To understand the answer, you need to understand several major differences between cable providers and satellite radio.  Some of these include:

• Ownership of content
• Advertising support and business models
• Delivery and ease of reproduction/pricing

Most XM/Sirius channels are produced and owned by XM/Sirius so they do not compete with each other for listeners or access to the satellite radio lineup because the company only produces channels that they launch.  In the video world, most channels are not owned by the distributor so they compete against each other for access to viewers, ratings and advertising dollars.  In an a la carte world, this competition would require each video channel to spend significantly more money on marketing and promotional costs to attract viewers, driving up the cost of that programming to the subscriber.

In addition, satellite radio was founded on the notion that most of its channels would be commercial free or have very limited advertising.  Unlike video programming which relies heavily on commercial advertising, XM/Sirius programming is supported almost entirely by subscriber fees.  So with each channel relying on little or no advertising support, applying an a la carte model to satellite radio would not require each channel to boost its price (or reduce its quality) to make up for lost advertising revenues.  In the video world, that is exactly what would happen.

You also must consider the programming.  While satellite radio does have a respectable diversity of programming, each of the channels is essentially a technical reproduction of the other and the cost of production (which largely consists of recorded music and other material) is lower than video production and generally does not vary widely. Obviously attracting well known personalities like Howard Stern can affect costs (including potential litigation costs), but generally speaking, music and talk programming are fairly consistent.

In the video world, however, the cost of producing channels varies greatly and the cost gaps continue to widen with the growth of high-definition and more and more original programming. For instance, it costs more to produce an episode of Burn Notice than it costs to produce How Do I Look? So, while XM/Sirius may be able to offer customers the opportunity to purchase any fifty of its music channels at the same per-channel price, it is impossible for cable operators to offer video channels in this manner.

Finally, aside from the structural business issues mentioned above, it’s also important to understand that what Sirius-XM has agreed to is not actually ”a la carte”. Despite the marketability of attaching the words “a la carte” to their new options, according to their channel lineup and pricing document, XM and Sirius are offering consumers the opportunity to purchase smaller bundles.  You can choose either 50 channels from ONLY one provider (out of a total of 100 possible choices) or 100 channels combined from both.

The pricing document makes it clear that the “a la carte” option will not be available for a year, and will require new equipment.

A la carte programming will be available beginning within one year following the merger, and the other programming options will be available beginning within six months following the merger… A la carte programming will only be available for subscribers using new radios, which will be developed following approval of the merger.

There is no opportunity to buy only 1, 3, 5 or 6 channels.  You have to start with at least 50 channels.  That’s not what most people describe when they talk about a la carte.

There’s no comparison between cable’s business model of delivering ad-supported television purchased from multiple competing providers and satellite radio’s model of delivering ad-free content of their own design.  People may try to make such a comparison in order to argue that since XM and Sirius have agreed to provide “a la carte,” cable must be able to do it, too.    Unfortunately, as study after study has shown, the facts just don’t support the fiction.

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This Friday, the FCC will hold an Open Meeting and the first agenda item is the complaint by Free Press and Public Knowledge against Comcast. According to an article in the Wall Street Journal today, the agency “will rule that the cable giant violated federal policy by deliberately preventing some customers from sharing videos online via file-sharing services like BitTorrent…”

As I wrote just last week, it’s critical that we can all agree with the principle that “some kind of network management is necessary to ensure a quality experience for our customers.” Once we get past that concept, we can discuss and debate what’s the best way to achieve the goal of a quality Internet experience, but we can hopefully also agree that the government is not the best body to make these decisions.

In this morning’s Washington Post, FCC Commissioner Robert M. McDowell poses the question: Who Should Solve This Internet Crisis? He outlines past network challenges and describes how “engineers, academics, software developers, Web infrastructure builders and others” came together to find solutions. He then answers his own question.

The Internet has flourished because it has operated under the principle that engineers, not politicians or bureaucrats, should solve engineering problems.

P2P apps present particular challenges for network managers, as McDowell acknowledges, and just building bigger pipes doesn’t fix the problem. That’s not to say that this challenge (and others) can’t be addressed. McDowell points out that we need to avoid creating a bigger problem.

Our Internet economy is the strongest in the world. It got that way not by government fiat but because interested parties worked together toward a common goal. As a worldwide network of networks, the Internet is the ultimate “wiki” environment — one that we all share, build, pay for and shape. Millions endeavor each day to keep it open and free. Since its early days as a government creation, it has migrated away from government regulation.

If we choose regulation over collaboration, we will be setting a precedent by thrusting politicians and bureaucrats into engineering decisions.

Popularity: 35% [?]