Strung Up With Cable TV

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Sat, 28 Feb 2004 00:27:40 -0800
From: "Lawrence A. Rowe" <Rowe () CS Berkeley EDU>
Subject: Re: Strung Up With Cable TV
To: rob () twp com

Hi -

I too have seen cable rates here in the SF Bay Area go up dramatically. But in
our case Comcast used a different strategy.  They moved HBO and some of the
other popular pay channels off analog and onto digital. Now if you want HBO -
think "Sex in the City" (RIP), "Sopranos," "6 Feet Under" - you are required to
buy digital cable which is more expensive than analog. And, for just a 
couple of
dollars more a month they give you N more channels.

Well, I'm turning off HBO and the other channels because we rarely watch them.
One reason is channel switch time is horrible (1/2 - 2 seconds) and the visual
quality is often poor (see below). Most of the extra channels show movies - on
their schedule, not mine - so we have subscribed to NetFlix and get movies we
want to watch when we want to watch them.

Careful analysis shows that the advertised NetFlix rate is higher than paying
the additional cable expenses.  Well, here's two ways to deal with that. First,
if you have PVR like a Tivo, just look through the list of scheduled movies and
record the ones you want to watch using the cable rate.  Or second, got to
www.netflix.com and say you want to cancel your subscription.  They will offer
you a cheaper rate -- I forget the details, maybe $10-$15/month rather than 
$20.
I'm sure the DVD's won't be shipped to you as fast as they are for the "premium
price" service, but that may not be a problem depending on how frequently you
watch movies.

Lastly, I am pretty sure that analog and digital cable already run on the same
physical cabling - assuming the cable is good, which may not be true if you are
on one of the old systems.  In fact, the limit on how much material the cable
companies can send you is really the bandwidth they forward through their 
system
and the headend equipment.  Most modern systems send 500 MHz, I 
believe.  Analog
channels are 6 MHz, digital channels are typically sent at 3 Mbs MPEG2 encoding
with 6-8 channels multiplexed into one 6 MHz band.  So, most of the digital
channels are being sent in 10-15 analog channels worth of space.  In our
neighborhood the cable Internet service uses two 6 MHz bands. That gives them
plenty of bandwidth for Internet users.  The real bandwidth hog on the cable is
the "pay-per view" channels that show movies (10-20 digitial channels), NBA
games (10-15 channels), and the like.  I have never heard the number, but I am
sure the cable marketing guys know exactly what revenue the various services
produce (i.e., analog channel, digital channel, premium channel, etc.).  Might
be interesting to find out.

In fact, my guess is that the reason Comcast is upping their Internet service
from 1.5 Mbs down/128 Kbs up to 3-4 Mbs/384 Kbs is that they really have excess
bandwidth and this is a good way to use it to compete with DSL service that
already has bandwidth limitations in many installations.

Taking all of this together, my sense is that the *real* reason cable rates are
going up is that the companies have a monopoly so they can raise prices.  The
company needs capital to build their business and they are using current
customers to fund that growth since Wall Street has always been suspicious of
the cable business.

So here's an idea -- the best way to improve the service and choice is to
deregulate cable monopoly.  Either allow more than one company to install cable
in a neighborhood -- there's plenty of space on the telephone poles to string
another cable -- or treat the cable as a common carrier and allow different
companies to deliver services.  The later approach would be to remove the
vertical integration monopoly.

Interesting question: why doesn't the producer of the HBO programs produce
first-run DVD's rather than run it exclusive on HBO?  Right now it is because
HBO funds the production, but eventually someone will figure out that direct to
DVD is a viable distribution channel.  In fact, some movies - typically
children's movies and "losers" - do this already.

Ok FCC, how about it?
	Larry Rowe 

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