Digital TV Facts: The Latest

The most striking evidence this week of the gathering waves around the video-distribution marketplace is the increasingly tinny ring of proclamations from the defenders of the status quo.

Seattle’s City Council renewed Comcast’s cable TV franchise agreement, under which the company pays the city 5 percent of gross revenues and spends millions more on arts and public-access funding. As newspaper columnist Bill Virgin notes, it is a process that Comcast negotiates in thousands of cities and counties around the country.

As AT&T, Verizon and other phone giants launch their own subscription video services, they would rather deal with a few Congressional committees than 10,000 town clerks. Who wouldn’t?

Cable companies, that’s who:

“We are comfortable with the existing structure,” said Mark Funk, a spokesman for the Broadband Communications Association of Washington, whose members include Comcast and Millennium Digital Media (which also has a franchise agreement with the city). “This is how we’ve operated for the last 30 or 40 years.”

(And why not? Comcast profits tripled in the first quarter.)

Localism is under fire in broadcast TV, too, with affiliates’ hackles raised by networks releasing prime-time shows over the internet.

Jack Perry blogged about a meeting with a “major dot-com player” who crossed a line with him by calling network affiliates “irrelevant.” Affiliates are taken for granted, Perry writes. “The model still works.”

But how long can such a model persist when it exists primarily for historical reasons? The Ozymandias pose won’t work anymore.

The great big draft telecom bill released by Senate Commerce this week comes with a big bloviating name, the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006 (that’s its SHORT TITLE, actually). But in its pages what you will find are many amendments to the Communications Act of 1934, called into being by FDR and modified several times since, which established what is now the FCC. Airwaves being a scarce commodity, it made sense to establish a structure that would provide radio, and eventually television, service to the entire nation. And though it wouldn’t have to happen this way, the U.S. broadcasting system was designed to favor localism. We have reaped many benefits from it, too, especially during the years when local stations took seriously their obligation to inform local communities.

But when programming can be distributed over not only cable and satellite, but IP networks, and billions are spent laying fiber, where is the scarcity? (That doesn’t rule out oligopolistic tendencies, granted—especially without effective net neutrality protections.) The over-air TV audience is down to about 15 percent. Big marketing and packaging apparatuses will always exist. But you no longer need a TV transmitter to provide local video content. You no longer need a TV to watch it.

Local TV has already begun the process of its unraveling. There will long be a place for it—hell, Western Union didn’t stop sending telegrams until this year. But I think we can no longer imagine that this isn’t happening.

• Links: Seattle Post-Intelligencer, Chief Titan WeBlog

Will AT&T scale back Project Lightspeed, its plan to bring 200-channel TV service to 18 million homes? That’s what ThinkEquity analyst Anton Wahlman is predicting—and he expects stepped-up marketing of the phone company’s Homezone product (which is Dish Network plus add-ons) in the interim.

Karen Brown, reporting on AT&T’s quarterly earnings in Multichannel News, finds the company has surprisingly little to say about its multibillion-dollar IPTV project:

…the earnings were notable in part for what was absent—updates on AT&T’s Project Lightspeed fiber-to-the-node buildout or U-verse TV service, which is now in a San Antonio trial, were not even mentioned in the earnings release, and during the conference call Tuesday morning, seldom was heard a word about either.”

Lightspeed’s core problem, according to Wahlman: It’s too slow.

He believes AT&T needs to sharply increase VDSL2 bandwidth speeds if Lightspeed is to compete with cable. “AT&T is likely realizing that 25 megabits isn’t going to do the trick, but rather that it needs to plan for 100 megabits or more to the home today, with a path to Gigabit Ethernet to every home in the next five to 10 years at the most.”

Lightspeed’s hybrid transmission system of fiber and copper wire is called into question by Jim Carlini, an adjunct professor at Northwestern University.

If you’re going to go through all this redeployment, AT&T should be setting its sights higher on real broadband and long-term capabilities. Providing another flavor of DSL is shortsighted.

• Links: Multichannel News: one and two; Wisconsin Technology