[opendtv] Re: Migration to Internet-delivered TV
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Tue, 3 Mar 2015 08:11:48 -0500
> On Mar 2, 2015, at 9:18 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
> wrote:
>
> Trying to get Bert to agree to something, Regards
> Craig
>
>
>> Let's skip forward a few years to the point in time where the
>> facilities based linear streaming infrastructure of the local
>> monopoly pipes is no longer needed.
>
> IT'S NO LONGER NEEDED NOW, CRAIG.
Wrong. It is very much needed as the broadband infrastructure is not yet
capable of handling the complete conversion to IP delivery for more than 100
million homes.
I agree that it is possible today to access most content without using the
legacy pipes, although there are still some significant holes in your argument.
By that, I mean content that has not yet been licensed for Internet delivery.
But 2014 saw a major change in attitudes among content owners, and they are all
actively migrating their content to the Internet. I would point out that many
are doing so while remaining behind the MVPD pay walls, deploying TVE solutions.
I spent some time yesterday researching the history behind TVE and
infrastructure that is emerging. I will put the info in a separate post, but
one important fact I uncovered is that Comcast and Time Warner were the early
force behind the TVE concept, beginning deployments of infrastructure as early
as 2009. This led to industry wide adoption and the first deployments by
content owners in 2011.
> And, the broadband pipe CAN AND DOES ALREADY CARRY CONTENT BELONGING TO
> DIFFERENT LOCAL MONOPOLIES.
This is largely incorrect. The only local monopoly provider that is ALSO a
major content owner is Comcast (NBC). Time Warner is also a content owner, but
that is a different company than Time Warner cable, which Comcast is trying to
buy. There are some local content franchises owned by MVPDs including regional
sports networks and a handful of local news channels. I do not know if most of
this content is being made available via the Internet yet, but it all requires
a MVPD subscription.
>
> How many times have I repeated that this far-future you keep referring to is
> now? The problem is, you only listen to yourself, Craig. And yes, Craig, I
> deleted a whole bunch of unnecessary verbiage, in which you go around and
> around on these same points. Check back to your post.
You can repeat this until you are blue in the face. That does not make it
correct. We are not there yet.
> That's why so many people complained, Craig. Comcast is making money from
> broadband subscribers who pay for the faster links speeds, Netflix was
> willing to fund their own CDNs, and still Comcast wasn't happy.
Consumers were not complaining about the fact that Comcast was asking for
access fees Bert. They were complaining about poor quality of service - the
inability to access content because of congestion, the inability to stream at
higher resolutions, and buffering causing program interruptions.
Netflix was complaining that Comcast was not accepting traffic, or slowing
traffic from the CDNs and peering companies they were paying to distribute
their bits.
The fact that Netflix ultimately decided to build its own CDN and deal with
ISPs directly is just the reality of building a very large OTT business. Apple
is building out their CDN around the world - they just announced new data
centers in Arizona and Europe. Google is building its own CDN. And Amazon is a
major player in this area via Amazon Web Services, a portion of their business
that receives little attention, but is both growing and profitable.
And Comcast is a major player here too, via Comcast Wholesale.
http://www.comcastwholesale.com/
> It's a bit like the Russians pretending that all they want is to protect
> people being brutalized, in the Ukraine and previously in Georgia. We know
> their history. Whatever they pretend today, their history precedes them. So
> now, Comcast got Title II. Do you think their antics played no part in that
> decision? The simple fact is, Tom Wheeler got such a huge avalanche of mail
> on this subject, in the millions, the vast majority demanding NEUTRALITY,
> that he went as far as changing his previous position.
And interesting analysis. I will have a related analysis too in another post.
Let's just say that at the behest of the President, Wheeler had placed the FCC
squarely in the middle of the business of operating the Internet. As was the
case with telephony, the interconnection business was the reason that Title II
was created, and we are seeing this repeated now with the Internet, where
regulating interconnections is the real meat in the new FCC rules.
>
>> On the other hand, if I could buy my MVPD service from Comcast, as
>> you suggest, and many other Cox ISP customers did the same, then a
>> local Comcast edge server might be required.
>
> Whatever, Craig. These are design details made as needed, if Comcast wants to
> morph into a ubiquitous OTT site. Or they can let others manage the TV
> content instead, and Comcast becomes only a neutral broadband provider.
It's not that easy. There are legal issues in play here as well. There are
local franchise agreements, anti-trust issues, and governments that want their
pound of flesh. Comcast is playing at every level of this new game, and they
are trying to dominate it. They will never be a neutral broadband provider
unless they are forced to divest some of their current businesses.
They own content - NBC Universal
They have the largest ISP network in the U.S.
They have the largest number of MVPD subscribers
They have a huge wholesale business offering content hosting, CDN services and
other components of the interconnection puzzle.
Existing local cable franchise agreements assumed that content and carriage are
tied. Now these agreements are being challenged by the reality that these
monopoly pipes have become perhaps the most important part of the Internet -
cable dominates high speed broadband throughout the country.
When DBS started to compete with local cable systems, state and local
governments wanted their pound of flesh. After several court cases, the
solution was to allow states to tax the DBS services, then share the revenues
with the local cable franchise authorities. It is likely we will see something
similar play out now with the "virtualization" of MVPD services.
I suspect that the ultimate resolution will be to tax the ISPs and give up
trying to tax the delivery of entertainment over these pipes. But we may see
some interesting court cases, if for example Comcast tried to compete with Cox
cable here in Gainesville. This is another reason we are not there yet Bert;
the "system" has built in speed bumps that are going to cause this transition
to drag out for at least another decade.
> The only point I was making is that your street address should NOT be
> relevant to what TV bundles you have access to. Why is it so hard to get such
> simple points across?
Because I already have access to multiple MVPD services, and all of the OTT
services that you can access. All I am saying is that we are in a transition,
and we will likely see a great deal of friction in the coming years with
respect to opening up local markets to MVPD competition from out-of-market
facilities based MVPD franchisees. I agree that such competition is possible.
The question is what will the regulators and the franchisees do to prevent it.
> Does your street address determine whether you can get Netflix? No. As long
> as you have a broadband pipe to your device, you can get Netflix. If Comcast
> wants to offer online TV bundles, THE SAME SHOULD APPLY.
See above.
>
> Impressive! And I can reach a practically infinite number of businesses on
> the web, Craig. I'm certainly not limited to three!! (Sling is not an MVPD.)
Sling IS a MVPD Bert. Please stop this nonsense.
It is no different than what you say I should be able to do - i.e. buy my MVPD
content from Comcast.
>
> I very much doubt that. Speaking of "pure speculation." The FCC *might* do
> what they do to telephone service. In order to provide broadband to those who
> can't afford it, they dump a bunch of taxes and fees on your broadband bill.
> But let's not make up fantasy scenarios. If you want a scenario that's AT
> LEAST as credible, without Title II, Cox could obsolete your IP appliances,
> and insist you only buy their own proprietary systems.
I did not make any of this up. It is a "composite" of all of the analyses I
have read about what the FCC can do under Title II regulation. As with
telephony, the real challenges came from modernizing the regulation and cost
structure of the interconnections. Remember when Ma Bell had a nation monopoly
on long distance service. Remember what it cost?
You like to point out that utility rates are fairly stable. No doubt, the cost
to the consumer for ISP service will be fairly stable, even as the definition
of broadband (now 25 Mbps), keeps evolving to higher speeds. The battleground
will be the interconnection fees and taxes. Sooner or later (probably sooner)
Netflix will be forced to raise its rates (again) to cover new interconnection
fees and taxes. Dittos for every other OTT service.
> Regional sports are already available over other media than just MVPDs, right?
No. Most of these are exclusive to the MVPD networks in the region. Only a
small amount of this content is available OTT.
> And I'm certainly NOT the only person who thinks, or thought, that sports is
> the last bastion of MVPDs. I've posted more than one article that said the
> same thing. Which makes Sling TV that much more amazing. Another example of
> something happening almost instantly, right after Craig claimed it would
> never happen.
Sorry Bert, but you have blinders on. Yes sports is very important because it
is the last bastion of appointment TV and has little value as VOD after the
event. But people subscribe to MVPD bundles for many reasons. This is
especially important to families; each member of the household typically has a
different group of favorite channels.
And for what it is worth, Fox News Channel is the second most expensive network
in MVPD bundles, as people log many more hours watching it than live sports.
ESPN does not get the largest number of viewing hours by MVPD subscribers -I
have not watched it since the end of football season. It is the most expensive
MVPD network because of the high rights fees, and the hug value to to consumer
when there is an event they want to watch.
Regards
Craig
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