[opendtv] Re: Digital Trends: ESPN may pull its finger out of the Internet-TV dam, unleash a flood of change

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 5 Feb 2014 11:01:44 -0500

Bert, let's not get standards, regulation, and industries regulated as 
monopolies/oligopolies mixed up. Clearly there are some overlaps on a Venn 
diagram, however, using the Internet as an example, we can have highly 
competitive markets operating within a regulated infrastructure. Unfortunately, 
from a historic perspective, competition is almost completely absent in what 
have been characterized as "natural monopolies."

Broadcasters compete for ratings, however, as a business they operate as an 
oligopoly.

A case in point, deregulation in the electric power industry is now a major 
focus. Everyone delivers power over a public grid that is owned and maintained 
by a large number of investor owned and public utilities, but there is no 
reason why we should not be able to have competition among the generation 
facilities, which all feed that grid.

> On Feb 4, 2014, at 9:11 PM, "Manfredi, Albert E" 
> <albert.e.manfredi@xxxxxxxxxx> wrote:
> 
> You make it sound like a bad thing, but in fact, *someone* has to create and 
> enforce the standard.

Clearly, for a period of time we had multiple standards for electric power, and 
overlayed distribution infrastructures. The desire to have a single 
distribution infrastructure, supported by both the power industry and the 
government required a single power transmission standard. It was the 
industrialists who proposed the idea of natural monopolies, as they saw the 
potential to minimize price competition - a win/win for both the monopolists 
and the regulators.

So the U.S. picked a power standard. Good.

But Europe picked a different power standard. Not so good. 

In part because of this, there were multiple analog video standards, which 
begat standards converters; I'm sure Mark could stand up and give a 2 hour 
speech off the cuff on this subject.

While electricity became a monopoly, we have multiple fuels and competition for 
home heating, and water heating. Heat pumps, natural gas, propane, fuel oil, 
kerosene, wood, coal, etc.

> Mark mentions the telegraph. How useful would it have been if Morse Code 
> hadn't been standardized?
> 
> Almost as if by magic, the IEEE and the IETF seem to have been capable of 
> becoming the regulatory bodies, for layer 2 and layer 3-7 digital 
> communications networks. Without government intervention. Point is still, 
> some such organizations and standards are needed, and for government to take 
> on that role seems logical to me. Better yet is when the players use 
> "enlightened self-interest" to do the right thing. Doesn't always work.


Standards are clearly important, and to some extent they are independent from 
the businesses that use them. The ITU and ISO have been important from an 
organizational standpoint in the development of standards used in both the TV 
industry, and more recently for the delivery of still images and video over the 
Internet.

But industries can also use standards to create barriers to competition, as was 
the case with the MPEG-2 standard. MPEG-1 came in under the radar for the 
television industry. But when General Dynamics demonstrated a viable digital 
compression technology based on MPEG-1 for DBS, and then HDTV, the video 
industry took notice, and co-opted the MPEG-2 standardization process. Many of 
the basic components of the standard were in, or about to move into the public 
domain, and it was well known that interlace, itself a form of image 
compression, caused many problems for the entropy coding techniques used in the 
MPEG standards. 

The computer industry, and a few enlightened video equipment manufacturers 
fought to keep interlace and "59.94" out of the MPEG-2 standard, and to move to 
formats with square samples and natural multiples of the basic block 
transforms. But the Japanese video equipment manufacturers in particular used 
the standards process to entrench their 1125/60 HDTV standard, and the "601" 
SDTV standard. There was great concern, especially among the Japanese, that a 
progressive scan, square pixel SDTV standard (e.g. 864 x 480 or 1024 x 576) 
would look "too good" when compared with interlaced 1440 x 1035. In the process 
these manufacturers tweaked some of the old technology that should have been in 
the free and clear, creating a bunch of new patents that are soon set to expire.

While the traditional TV and MVPD industries are still mostly using the legacy 
MPEG-2 standard - in part because the MVPDs have deployed hundreds of millions 
of MPEG-2 set top boxes, MPEG-2 never became a factor with Internet video 
services, primarily because of the high MPEG-LA royalty rates. 

It is perhaps a bit ironic that Bert continues to champion the proprietary 
Flash video standards, rather than arguing for the h.264 standard. But this 
apparent dichotomy illustrates another important "feature" of what happens in a 
digital medium where the transport is standardized, but companies are free to 
innovate with new technologies. The IETF typically seeks to codify industry 
practices into standards, rather than trying to invent technologies. 

Thus Bert can watch a variety of TV services using multiple formats and 
multiple compression standards, because the PC he uses to connect the Internet 
to his TV can accommodate multiple standards, and new standards yet to be 
developed.

Regards
Craig 
 
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