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Prying Open the Cable Market 89

garzpacho writes "In an interview, FCC chief Brian Martin discusses his efforts to make it easier for new entrants--especially telecoms-- to compete with traditional cable and satellite companies in delivering video services. The focus of this effort seems to be in addressing local franchising authorities' current bias towards incumbents. He also talks about current congressional efforts to enact national franchise legislation."
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Prying Open the Cable Market

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  • by Beatbyte ( 163694 ) on Friday April 14, 2006 @03:52PM (#15132592) Homepage
    Who owns the physical media in the ground.

    • by Alaren ( 682568 ) on Friday April 14, 2006 @04:03PM (#15132657)

      The thing is, a lot of that media in the ground, though owned (on paper) by the big players, was laid with taxpayer monies.

      Yes, I know a lot of that copper is put there at the expense of private corporations, and that is a whole different argument. But a sizeable amount of the media in the ground is put there by municipalities or state or even in some cases federal funding. Taxpayers allow it because, frankly, it makes our lives easier no matter who owns it.

      But if those big corporations stop acting for the public good (and no, that doesn't mean they can't act for a profit--they can profit by serving the public good), then we can seize their stuff (whether we initially paid for it in taxes or not) and give it to someone who will serve us better. People's homes get seized for the public good of building freeways all the time. Let's do the same thing to the big telecom companies.

      Yeah, I know, it would never happen, not while they have our congressmen in their pockets. But I can dream, can't I?

      • Good idea, Comrade.
      • by Crashmarik ( 635988 ) on Friday April 14, 2006 @04:36PM (#15132853)
        BZZZZZ

        The amount of cable/fiber for public telecom infrastructure is vanishingly small. What the public gave is the right to exclusively lay cable to provide a particular service (telephone or cable originally). Initially for cable this was a reasonable deal as installing a municipal cable system was something that operators were reluctant to do if there was good reception.

        The problem is we are still operating on agreements that were negotiated when there was no such thing as premium cable, and often were made by bought and paid for politicians.

        My own feeling is that anyone should be able to offer cable service to a neighborhood if they can post a bond and meet basic operating competencies for a public utility. Same goes for phone.
        • The amount of cable/fiber for public telecom infrastructure is vanishingly small. should read as cable/fiber laid at public expense
        • Yeah,

          Guess who owns dem dar ground holding up yer poles?

          You don't like it, you can take your copper back!

          Oh well, at least it looks like they are fighting amongst themselves for now.
          • This poster has a point. The easements are easily worth... oh, I would guess 100.. times as much as the cables actually laid. Those easements aren't privately owned, generally. There was a certain telecoms company founded in the 90's on this principle, rather brilliantly. The VC bought a railroad, of all things. Why? Because of the easements. Easy way to lay down your own national network between most major point A's and B's that people cared about...

            C//
      • I know a lot of that copper is put there at the expense of private corporations, and that is a whole different argument.

        Every penny of that copper belongs to the public if it was laid under an exclusive franchise. Those who live by regulation, die by it. If they have infringed on the publics' right to free competition, they have obligations to that public. Every penny they invest comes from your loss of price competition.

        There are two ways to fix the problem. You let others compete or you limit profit

        • Here in Canada, they have gone a third way: limited time monopoly, but when that ends the lines open up to third party resellers who buy the telco or cableco's service wholesale and resell it to customers as their own. It means that you have a half dozen iterations of 'cable internet', all with vaguely similar pricing and with identical AUP policies, seeing as the Internet access is ultimately all coming from one source, but with at least a portion of your monthly fee going to someone other than the incumb
      • Last time I checked, most cable co's do infact own their lines. They laid the media in the ground based being given the local 'monopoly' on video service.

        This isn't about sharing those lines, it's about phone co's using their networks to supply video.


        • most cable co's do infact own their lines.

          Then why am I paying their taxes every month if it's theirs. They may "own" access currently, but that is a result of a regulated monopoly with restricted access to publicly owned easements. Try running your own cable down the road and see how far you get before yu're told you can't.
      • Rejoice fellow geeks, for our day of reckoning is finally upon is. Let us, the great pale masses, rise up now to claim that which is ours! Death to the capitalist pigs! Viva le resistance!

        I implore everyone reading this to begin purchasing as much gasoline and orange juice concentrate as budgets will afford. If they won't give it to us peacefully, we will burn them to the fucking ground.

        If any of you are questioned by the authorities, simply explain that, unless you are left alone immediately, you will

      • The thing is, a lot of that media in the ground, though owned (on paper) by the big players, was laid with taxpayer monies.

        Yes, I know a lot of that copper is put there at the expense of private corporations, and that is a whole different argument. But a sizeable amount of the media in the ground is put there by municipalities or state or even in some cases federal funding. Taxpayers allow it because, frankly, it makes our lives easier no matter who owns it.

        How much is a "sizable amount"? How much media

      • Trends:

        Corps get tax breaks to build infrastructure, then use this infrastructure to kill off competition, lockin customers, and illegally raise their new found monopoly prices.

        Sometimes customers revolt. Sometimes they look for alternatives. Usually they baah like sheep.

        Government lets this happen.

        Media promotes it.

        Eventually you're left with only a few services to choose from, most of which suck and are fundamentally pro-business/anti-consumer, and an uneducated population that's blissful to consume all
        • Just let me smoke my weed, if Freedom is really what you stand for.

          Amen, brother *fires it up*
      • Yes, I know a lot of that copper is put there at the expense of private corporations, and that is a whole different argument.

        Such as still being burdened with a tax to pay for the Spanish-American War?
    • No. It boils down to who has the greatest capacity for threat of violence. The ones with that make the rules. That's why you're government makes the rules instead of you. :)

      But we don't really need to boil it down. The ones who own the lines owe allegence to the one that owns the ground that the line is in. Since the majority of that is public land...

      A similar thing is true for satellite. The airwaves are public property.

      So if the people sticking their lines in the public ground or using the public ai
    • It is the entrance to the house that is the most expensive part. Typically, the cable in the ground is pretty cheap (loads of ROWs, etc).

      Since Comcast and others want to act like a fully deregulated entity, I would like to see congress do so. But to do that, the company should be willing to break into 2 parts.
      1. The first company should be a total monopoly with a fiber from the house to a green box. The box can be at a block level, or a section level. But it is to the green box that the first 50 companies sh
  • Bellsouth TV? (Score:2, Interesting)

    by IflyRC ( 956454 )
    I already hate their phone service enough! I don't want them encroaching on my television. At least maybe we'll get the cable and satelitte companies to start offering local and long distance packages in all markets.
    • Now that the AT&T/SBC/Ameritech overlords have taken control over BellSouth, things will only get better for you. If by better, you think service calls to 20 different divisions of people sitting in the same room and mistakes on every bill are a good thing.

      No joke, I was slammed by Ameritech for long distance carrier, charged $5 for a single 2 minute call across the street, and had to talk to service people at Ameritech, SBC, and AT&T Long Distance (though they are all the same fscking company). W
  • Then we can have a competitive playing field.
    • TWC Digital Phone, Vonage, Lingo, and cell phone services are already giving them a rough ride. Why else do you think (telcoms) they want to prioritize the IP packets?
      • Vonage tends to have mixed reliablity from what I've heard (especially in the e-911 department) and cells are not only expensive but even more unreliable. Now my understanding is that other parts of the world have true pay-as-you-go (talk for however long, they tally it at the end of the month and send you a bill, not that expiring charge-up crap). As a result, in many situations, they're just not a sufficient replacement for a POTS line. They have no right to priroitize packets like that, especially as
  • does permitting cable companies to become monopolies and not resell use of the cable or poles equal encouraging competition? Or eliminating the restrictions on phone companies? or any other losening of restrictions the FCC has done?
    • Re:Since when (Score:2, Interesting)

      by GeekyMike ( 575177 )
      I work for a cable company. Television signal and advanced services (VOD, PPV, High Speed Internet) are all distributed from the headend (Our satellite base station). There is really nothing to be gained by sharing the lines from a services standpoint, as the incumbant is already trying to build service capacity/line quality so we can compete with telcos in the telephony field and high speed internet. The reason CATV companies are pushing for this is that the bandwidth required for these services are ver
  • by creimer ( 824291 ) on Friday April 14, 2006 @04:03PM (#15132658) Homepage
    Can someone tell me why a network cable at a retail store cost two to three times as much as you would pay at an online store? The retail prices for a commodity item like network cables is bad enough that making your own would be cheaper. Damn cable monopolies.
  • He wants to allow the telcos, a demonstratively corrupt group of companies, access to traditional cable services?

    And this benefits the average customers...how exactly?
    • I for one, think that most cable companies (read: comcast) are terrible at dealing with customers. Do you all remember how cable companites used to say "on XX date from 9AM - 5PM", well after Satelite TV came out, suddenly they're more like a normal business, with a set time and day.

      Ideally this would happen again, light a fire under their ass. Remmeber, competition breeds excellence
      • Competition breeds excellence when companies compete by improving their products and lowering prices.

        What we see now is a different kind of competition that does not help consumers. It involves lawyers, politicians, and throwing your weight around for market position (by mergers or buyouts, etc) to improve profits.

        Big suprrise, but the industry most guilty of this kind of "competition" is the telcos and cable companies.

      • Except the telcos have more money than God. So what would actually happen would be we'd get a great package at a great price from the telcos while they try to starve out the cable companies ( but we'd still get the same bullshit we get from the telcos now. I bet they'd even try to slip the broadcast flag through ). Once they had control of the market, they'd bend us over a barrel.

        Speaking of the broadcasting flag, wasn't the FCC for it, but the cable companies against it? That'd certainly paint this int
    • He wants to allow the telcos, a demonstratively corrupt group of companies, access to traditional cable services?

      Unbelievable isn't it? You and I don't think it's a good idea to let Ma Bell extend their regulated reach. It would be fine if everyone was free to compete, but they are not. The crooks are about to be rewarded.

      The FCC has this strange idea that all you need is two companies to service all your communication needs. Really. The FCC thinks that all you need is one phone company and one cable

    • And this benefits the average customers...how exactly?

      It benefits me and all my neighbors for one. We had a little local cable company. Practically a co-op. We got decent service at a very good price. Then Comcrud bought them out and now our service is terrible. Many channels are clearer if you pick them up with rabbit-ears. And this is in a very wealthy neighborhood. Service has gotten worse, prices skyrocketed, and our cable modem speed (actual, not advertised) plummeted.

      The only competition is DirecTV

  • A New Jersey legislature committee OKed a bill (to go to the next step) which allows Verizon to bypass the local municipality for cable TV franchise. They have to put in fiber and be done with the fiber in any one town within six years of starting.

    Here's a news article that explains recent developments in New Jersey. http://www.freepress.net/news/14460 [freepress.net]

    I was surprised to read that it includes a tax on existing cable customers (essentially driving up their costs) that is used for "property tax relief" and su
    • California is doing this, too. I heard the radio ads a couple of times yesterday for a California Assembly bill, AB2987, that Verizon is backing in an attempt to leverage public support for their efforts to add video services over their private fiber-optic network. The claim within the commercial is that this will have the benefit of increasing competition for customers, thus lowering prices for everyone involved.

      Honestly, if Verizon is willing to run fiber into my apartment at decent rates, I'm willing t
  • by acoustix ( 123925 ) on Friday April 14, 2006 @04:33PM (#15132834) Homepage
    My experience (in central Iowa) is that the cable companies have been upgrading their systems for the last 5-7 years. They're spending millions and millions to upgrade their own networks. They've obviously been planning on offering new services (cable modems, VOD, more channels, more ppv, hdtv, VOIP, ...) for quite some time.

    Why haven't the telecoms be doing the same? Why didn't they push this issue earlier? As far as I can tell, Verizon is the only telco that is really serious about upgrading and using fiber to the doorstep.

    Nick
    • There's little reason for a telecom to uprade it's infrastructure. If they do, they have to give away access to competitors. Cable companies have no such restrictions.
    • Laying fiber costs billions of dollars on a national scale. Telcos want to utilize as much of the existing (copper) infrastructure as possible. They'll probably lay fiber to a neighborhood, and use the latest ADSL 2 / 2+ or VDSL technology to deliver service to homes in that neighborhood through the exisitng copper.

      Much cheaper than getting fiber into everyone's house, which has to be layed down, burried, and junctioned at fiber termination devices.

    • As far as I can tell, Verizon is the only telco that is really serious about upgrading and using fiber to the doorstep.

      Then Verizon is the only bunch of lames. There's no need for this whatsoever. You can get at least a gigabit over copper these days, and probably more. I doubt you can get that much on coax, but you can certainly get over 100Mbps, which frankly suits the home user just fine. I know they have these fancy gig and now even some ten gig fiber connections some places in Japan, but they're

      • You can get at least a gigabit over copper these days, and probably more.

        Not over thousands of feet of POTS-grade copper. The telcos are sweating just to get ~24Mbps over existing wiring.
        • While that's true, I still don't think the solution is fiber to the curb, at least not yet. You can get pretty decent run lengths at 100Mbps (more than enough for almost any purpose - major webservers belong in colocation facilities anyway) and fiber has dramatically higher installation costs than copper. When fiber comes down even more than it already has, especially if they can come up with some fiber that cleans itself up somehow when you cut it, my opinion will change.
          • Obviously, the CEO of Verizon disagrees with you. He was on Charlie Rose the other night talking about this issue. The way Verizon sees it, they could run fiber to the neighborhood like their competitors and have enough capacity for existing technologies, or they could run fiber to the premises and have suitable bandwidth for future technologies. There is more to this than internet connectivity. They are after the broadcast TV, VOD, and VoIP markets too. VoIP in particular worries them, it competes with the
    • Why haven't the telecoms be doing the same? Why didn't they push this issue earlier?

      Because the telecoms operate in a way where they won't ever invest anything unless they can get regulations passed that make it super attractive for them. Instead of investing money and marketing a desired product, they whine and stamp their feet about rules that allow competition.

      Now they're on a push to do away with local franchising rules so they can enter the CATV market. Again they're complaining about lack of fairnes
  • The 'benefit' of a National Franchise is that is would allow companies to cherry pick the areas within a city the server. None of this providing service to the entire city crap...
    • It should be possible to write a law that allows national franchises, but forces service providers to serve each city on an "all or nothing" basis, thus preventing redlining.

      Honestly, I don't even know what the justification is for the concept of franchising TV providers (except regulatory capture, of course).
  • by defile ( 1059 ) on Friday April 14, 2006 @04:37PM (#15132860) Homepage Journal

    Many people are totally ditching their landlines in favor of VoIP over cable broadband. Dialtone is such a commodity now it fills me with glee. No doubt this is troubling to the bells, so they decide to fight back against the cable offerings by running TV over their copper.

    This can only lead to more commoditized TV, which can only mean one day we'll be downloading/streaming your shows from web sites on our own schedule.

    Telco and cable company at each other's throats? I can hardly wait.

    • Telco and cable company at each other's throats? I can hardly wait.

      Not going to happen.

      So we move from a monopoly market to a duopoly market. The duopoly will learn real quick that it is in their best interest and our WORST interest to cooperate. Of course since cooperation is illegal, it will come through regulation as the telecom industry is already rife with regulatory capture. [wikipedia.org]
  • Granted there are other ways (streaming vid over TCP/IP etc.) but I feel sorry for any new company trying to enter the cable market. Even if you are running a small mom and pop company you still need franchise agreements, channel licensing, set top contracts, Internet infastructure, email etc.

    There is a huge trend right now in cable mergers where even the _existing_ Cable franchises are being gobbled up by the top ~3 players. In satellite there are even fewer players and the barrier to entry is even highe

  • Opening up all those networks sounds like a great idea until you realize that it'll drive all the smaller players out of the business entirely. The big players can always undercut the smaller players on price, or offer MORE features for the same price. Always. Economies of scale and all that.

    If the FCC mandates that cable providers open up their lines to other providers, then at some point we'll ALL be paying AT&T for our phone/TV/internet service. Didn't we break them up 20 years ago?
  • More like buy them out. There is no competition, nor will there be. This will just bring about more mergers. FTA: "And he has green-lighted the historic mergers of two Baby Bells, SBC Communications and Verizon Communications, with their onetime long-distance rivals." It is delusional to believe that this do anything to bring about better service and prices, or to allow any newcomers who don't "play ball". ATT&C (American Telephone, Telegraph, and Cable) will be the new name.
    • good point, I was reading a print copy of the Wall Street Journal in which they pointed out that the FCC in the Bush regime years has done more to encourage mergers, and stifle real capitalist competition, than any prior FCC.
  • Bits Over Fiber (Score:2, Informative)

    by EnsilZah ( 575600 )
    Here in Israel the major cable company pretty much does it all.
    You have phone, TV and Internet all going over the same fiber.

    I really think the old Telecom/Cable/ISP distinctions are becoming anachronistic, it's all bits over fiber after all.
  • Views (Score:3, Interesting)

    by tomstdenis ( 446163 ) <tomstdenis@[ ]il.com ['gma' in gap]> on Friday April 14, 2006 @05:04PM (#15133006) Homepage
    1. Have the government install it [by it I mean fibre or pipe to door] and companies are taxed, e.g. 1% or something to support it

    2. Have one company install pipe, own it, do whatever it wants

    3. Realize that the CUSTOMERS are paying for the pipe and ultimately they should have a say on how they use it [e.g. comcast could stop screwing vonage users for instance]

    I mean they put a coax from the box to my house once, like five years ago. Why would [or should] I pay a monthly fee for what amounts to 20 minutes of time and five dollars worth of cable?

    As for the miles and miles of cable that joins up the infrastructure I'd like to think that decades of paying stupidly high charges would have covered that.

    The problem is they say "the cable is worth 389 million" so every year they tell the customer they have to recoup that when the cable has long since been bought and paid for.

    Now on the other hand if we just had the government maintain it and fairly lease it out to bidders [that being the gotcha] we wouldn't have these problems. As for the "let capitalism run its course" folk look where we are at now.

    Why can I send 20 gigs of data ten thousand miles for 30$/month when I can't make a phone call [which is scratchy and all] overseas for anything less than 3 dollars a minute [on my cell]. ... hmmm 800kbit modem vs. 9.6kbit cell ... hmm ... which costs more...

    Telcos and the like can shove their heads up their collective asses.

    Tom
    • I mean they put a coax from the box to my house once, like five years ago. Why would [or should] I pay a monthly fee for what amounts to 20 minutes of time and five dollars worth of cable?

      Because your access line is not the most expensive part of providing service. In addition, that cable installation probably cost the cable company somewhere between $300 and $800. The aggregation router at the cable head-end costs between $100K-350K plus, say 20% per year in vendor support fees. The core routers, server
    • 4. Have one private company run the physical media, and multiple others run layer 3 and above.
  • The problem with TV run by the Feds is that it conforms to their (FCC) standards (e.g., no howard stern), while LOCAL cable conforms to local communinity standards and isn't under the control of the FCC.

    This is among other things an attempt to regulate speach on TV which the FCC can't do on cable (today).

    Since TV can already come in via the Internet (video.google & iTunes, etc.), the Air and via Cable and via the phone system (via DSL), i'm not sure that there is a market failure here.

    I repeat, this see
  • It's Kevin Martin.

    (and thank GOD its not Michael Powell . . .)
  • I like the idea... (Score:3, Insightful)

    by TheZorch ( 925979 ) <thezorch@gm a i l . com> on Friday April 14, 2006 @06:01PM (#15133268) Homepage
    I like the idea of mandating unrestricted access to municiple areas by competing companies. Right now only one cable company can do business in certain areas because of a deal with that city, and the city bars anyone else from coming in...unless they are satelite TV. More competition between cable TV services in the same area will lead to lower prices. Right now most cable companies can charge whatever they want because there aren't very many other options except for Direct TV, and we know how underhanded cable companies can be towards the satelite companies.
  • For must of the last century, the Bell System was the incumbent for the bulk of the USA. I didn't see them encouraging encroachment on their turf during that period. In fact, they had to be forced to allow the cable firms to hang cable from their poles. What resistance they get they deserve.
  • by teebob21 ( 947095 ) on Friday April 14, 2006 @06:41PM (#15133435) Journal
    Personally, I don't think the FCC should have even gotten involved. After I RTFA, it seems like a few big-dollar lobbyist went and bitched that the phone companies had requested a local franchise to deliver TV service, and the local governing boards said, "No, we already have a provider here."

    Boo-hoo.

    Government for the people, and by the people was working, then the feds decided to step in and bow to the corporate pressure of the Bells. Do we really need a national franchise for the telcos to enter the video market? Of course not.

    In the interest of fairness, if the FCC wants to tear down the barriers of franchising to new competition to the incumbent video carrier, that's fine. In that case they should also eliminate the requirements for new voice and data providers, especially in cases where the incumbent telco is out of compliance with the law. Case in point: I work for a cable company in Nebraska, and we are ready to launch VOIP service. We have fiber installed to 10 area towns, providing the backbone for a true high-speed data network, as well as digital TV service. However, since Qwest is 10 years behind in installing E911 (http://en.wikipedia.org/wiki/E911 [wikipedia.org]) in our rural towns, we cannot (under current FCC regulation) launch VOIP.

    What exempts the incumbent Telco from the law? Money. They simply pay their non-compliance fine every year, because its cheaper than actually upgrading. I wonder: if some lawyer's grandma has a heart attack and dies because Qwest doesn't have E911...will they upgrade, or just pay that settlement as well?
  • The government should NOT be interfering in the marketplace like this. Why?

    It's real simple.

    Problems are caused because the government cannot act and respond to market changes (ie; technology) as well as the private sector can. And when the gov interferes in the private sector and begins to regulate it, and then technology changes, all of the sudden we have outdated laws and "programs" that are causing a loss of money, and are obsolete.

    Governmental regulation fouls up the free market almost always. Look at
  • This misnamed "prying open" republican assault on local control over the public commons, ignores vital first amendment issues. Currently there are hundreds of public access tv stations giving the folks without big time media connections a chance to get ideas out to the millions of faces watching cable tv. Unless this vital production capability is preserved and expanded, the only media on tv will be controlled by huge corporations and governments. Our democracy depends on viable "wild" voices and images.

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