[opendtv] Re: Spectrum is too valuable

From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
To: opendtv@xxxxxxxxxxxxx
Date: Mon, 23 Nov 2015 09:33:03 -0500

On Nov 22, 2015, at 8:53 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:

Craig Birkmaier wrote:

The problem is that your definition of "progress" is killing the
existing business model.

The problem is that you think this is a problem. I can understand if the
MVPDs think of this as a "problem," if they are not yet convinced that they
will ultimately benefit from progress. But human history is chock full of
just such transitions.

They are already benefitting from "progress." The average bill for a cable
company has more than doubled in the past decade thanks to the ability to sell
broadband and VOIP alongside the TV bundle. It is absolutely clear that they
are making the transition, but at a pace that you are uncomfortable with.

This is a "case study" in why engineers are rarely successful running
companies. An engineer can understand technology, and may be able to see
"transitions" sooner than the marketing and financial guys. But you need a team
grounded in all of the disciplines to build successful products and companies.

Wozniak was a talented engineer, but it took a Jobs to start a revolution. And
together they were unable to convince HP - run by a couple of engineers
building test equipment - to get into the computer business.

Bill Hewlett and Dave Packard missed the window of opportunity, trying to
figure out how to grow their company in new directions. I know, because I was a
consultant on several video related products trying to leverage their success
with printers. I used to work at their campus in Cupertino - the one that Apple
bought and tore down to build the new spaceship campus.

You completely miss a very important aspect of the cable and telco industries:
they make a huge amount of money off of the cash flow. And the cash flow for
the cable industry has never been higher, even when they sold video bundles to
more than 90% of U.S. homes.

Hey Craig. Internet streaming also killed the Blockbuster DVD rental model.
Are you seriously going to bemoan that change? If you were personally
invested in the Blockbuster DVD rental model, I might understand your
chagrin. Otherwise, it makes no sense.

I have used this change as an example of how we have weathered technology
transitions. Once again you are missing the forrest for the trees...

The rental business at Blockbuster fell off a cliff. The income and cash flow
disappeared. And the cable companies played a major role in killing them,
providing the broadband networks that now deliver movies without the need to
get in a car.

Maybe autonomous cars will be able to pick up movies some day, but I think it
will be too late...

It is important to remember that the HD transition began in the
late '80s at the behest of the broadcasters, as a ploy to
protect "their spectrum" from land mobile.

Yes, Craig, this has been your mantra for years and years. But it's beside
the point. We were LONG overdue for an upgrade to TV image quality
especially, less so audio quality, as TV audio had been fairly convincingly
improved over the years (first network HiFi in the 1970s and then stereo in
the 1980s). But image quality was ante-deluvian. I couldn't care less what
ulterior motives the broadcasters may or may not have had. Same as now with
broadband capacity, TV had to progress beyond the dark ages.

The mantra is 100% accurate. Broadcasters did not care about HDTV. They cared
about preserving their oligopoly. Most thought they would never have to upgrade
from NTSC.

The real transition in TV quality was driven by the computer industry. Not the
digital processing behind digital compression, but the manufacturing technology
needed to replace CRTs with lightweight high resolution displays.

The development of flat panel displays for laptops begat the larger flat panel
HDTV displays we have in our homes today. And UHDTV is now being driven by the
technology behind "retina" displays on computers and smartphones, AND the need
for an extended color gamut and improved dynamic range for all applications.

I was in the middle of all of this in the early '90s when the ATSC standard was
developed. We wrote a report for the Advisory Committee on Advanced Television
Services, Working Group 4, outlining the need to support all of these issues:

- progressive scanning
- orthogonal sample grids (square pixels)
- variable frame rates
- extended color gamut
- extended dynamic range
- and extensibility

But the ATSC designed a HDTV standard for huge CRT displays with NONE of the
above. We are just now evolving past the limitations of sRGB, which is based on
CRT colorimetry.

TV was dragged kicking and screaming into the future, with heels firmly dug in.
The DRM debate alone slowed things down for more than a decade. And the TV
equipment industry I once worked in is all but gone...like Blockbusters.

I claimed this? You are again confused.

Nope. If you were streaming TV programs in 2005 they either used a proprietary
codec like those in FLASH, or h.264.

The image compression protocol is H.263. Look it up, Craig. H.263 was the
original protocol for constrained pipes. And check out the dates, and the
compression algorithm:

http://www.itu.int/rec/T-REC-H.263/en

h.263 saw limited adoption in teleconferencing and portions of it were used in
MPEG-4 video. Neither saw any significant use, as MPEG and the ITU joined
forces to develop h.264, and the computer industry put their back up to force a
licensing regime for h.264 that was economically viable, unlike the MPEG and
ITU standards that came before.

Either H.263, or an equivalent protocol, was used early on in multimedia
streams over the Internet, Craig. Long, long before 2010, for pete's sake.
Where were you in those years, Craig

Working as a consultant helping companies implement these standards and writing
about them for industry trade magazines.

There were MANY failed attempts to develop viable video streaming technology.
And many attempts to co-opt industry standards by Adobe, Real and Microsoft. In
the end h.264 won the day, in large measure because it was economically
feasible to deploy the encoders and decoder to hundreds of millions of devices.

Apple STARTED iTunes video with h.264 in 2005 Bert. You may have been addicted
to FLASH, but by the time Netflix introduced its streaming service in 2008,
h.264 was winning the day.

Agreed! That real estate is very valuable, and very profitable.
Even IF the capacity existed to make the switch, and that is
questionable,

What's questionable about it? Is there something difficult about deploying
DOCSIS 3.0 today?

It is deployed Bert. But there are too many homes on most PONs to switch from
broadcast MPEG streams to Internet UDP delivery. We went through this ad
nauseum - the only way to do this now would be to limit the average bit rate
per home to less than 10 Mbps. You even stated this, and continue to claim that
something less than 5 Mbps is adequate for video streaming.

Is there something difficult about expecting cable subscribers to use
standards-based IP client systems? Is there something infeasible about
letting consumers buy their own DOCSIS modems, so the cable company doesn't
have to invest a huge amount on them?

Most people are already doing both - they are buying modems, smart TVs, Apple
TVs, Roku boxes, and Chromcast, and subscribing to Netflix and Hulu.

The transition can happen starting immediately, a few channels at a time.
Edge server capacity seems like the biggest change required. The cabling
doesn't need to change at all.

IMMEDIATELY! a few channels at a time.

Make up your mind.

IMMEDIATELY is not happening.

A few channels at a time IS.

Cox is now delivering all of our local broadcast stations and about 10 others
in clear QAM - no STB required. We are actually using the ATSC tuner in the
grandkids room to watch HDTV without a STB. The channels being used for these
bits were recovered from other services.

The cable industry is managing the transition, and making a "bundle" in the
process.

You tear down the aging shopping center to replace it with what people want
today. Happens all the time.

What people want today is what they are getting, albeit with too high a price
tag. The limiting factor is not the technology Bert.

It is two oligopolies managing a technology transition in a manner that
protects, AND ENHANCES their cash flow. There is a reason the content congloms
are more profitable than ever.

The hilarious part of this is that Craig thinks increasing broadband capacity
is a problem, and that retaining walled garden nets is preferable.

I am resigned to the reality that walled garden bundles are going to be
fundamental to the TV business model moving forward. Netflix and HBO Now are
walled garden bundles.

I am hopeful that new competition will help bring the cost of TV entertainment
under control, in part by providing more consumer choice, and in part by the
demise of channels we are forced to pay for but do not watch.

The broadband capacity issue is real. There is no reason to invest in
additional capacity faster than the level of demand to support the investment.
Unless there is real competition (more on this in a moment).

Especially in the face of rapidly evolving standards that keep improving
network performance. The cable industry is now starting to deploy its fourth
generation of DOCSIS; it will take another 2-5 years to to fully realize the
promised improvements, AND billions of dollars.

After you've increased broadband capacity, the cabled infrastructure will be
able to carry even TV content, for the masses. This will then lead to
unwalling of TV content delivery, as the MVPDs figure, why not sell outside
my old garden walls? This is progress, Craig. It's not a problem.

This is fantasy.

I don' know which is primary and which is secondary.

Really, Craig? If a cable net dedicates 1 Gb/s aggregate for every PON (if
you're lucky), and walls off maybe 120, 130, 150 channels, equivalent
capacity ~ 4 to 5+ Gb/s for legacy linear streams, you really don't know what
they consider primary and secondary?

I was not talking about them. I was talking about my perceived value of the
services I am buying. I would give up TV before broadband if I was forced to
choose.

How the cable companies perceive the relative importance is nothing more than
the kind of engineering work you do. They have multiple services and
technologies sharing the same wire/fiber. They balance the load and invest in
new infrastructure as the market demands.

It is highly noteworthy that the cable and FIOS systems become more competitive
with broadband when Google moves into town. Yet Google is not more competitive
with the MVPD bundles they sell to about half of their customers.

This should tell you something Bert. The MVPDs are not controlling this
transition. The content conglomerates are, and they are firmly in control.

Regards
Craig

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References:
- [opendtv] Re: Spectrum is too valuable
  - From: Manfredi, Albert E

[opendtv] Re: Spectrum is too valuable

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