Ensuring a #CommActUpdate for the Twenty-First Century

The Republican-controlled House Energy and Commerce Committee has been collecting input for a comprehensive update of the Communications Act for over a year now, with an eye towards a “technology-neutral” law that avoids placing different technologies in different regulatory “silos” and instead treats equivalent technologies equivalently. Towards that end, it has been issuing a series of white papers on issues surrounding the effort, and the most recent one concerns an issue that, perhaps even more than net neutrality, illustrates how much this effort is desperately needed: the video marketplace.

I sent in my thoughts on the state of the video marketplace and on the more general question of what I would like to see in a technology-neutral Communications Act, which you can see here. You may also want to read the comments I sent to the FCC on its ownership review and on a la carte television, assuming the FCC site is up.

SlingTV Isn’t Breaking Up the Cable Bundle. It’s Preserving It.

Dish took the wraps off its long-in-the-works Internet-delivered TV service today, long known as “NuTV” but now officially known as SlingTV. (Dish has a working relationship with the Slingbox company but there is no other relationship between SlingTV and Slingbox.) For $20 a month you can sign up for a dozen channels from Disney, Turner, and Scripps, including the A&E networks partly owned by Disney and – crucially – ESPN, all delivered over the Internet, plus additional genre-based add-on packages for kids’ channels, news and info channels, and eventually, sports channels. The techie blogosphere, long friendly to “cord-cutting”, is over the moon at the possibility of being able to watch ESPN “without a cable subscription”, “liberated from the cable bundle” in GigaOm’s phrasing. GigaOm calls it “a cord-cutter’s best friend”; “a cord-cutter’s dream”, agrees Deadline; an “over-the-top alternative to the cable bundle”, writes TechCrunch.

None of these are in any way true. Sling TV may not be a cable company in the sense that they string a bunch of wires to your house (or in Dish’s case, put a satellite dish on your roof) and deliver hundreds of channels through it, but it is very much a cable bundle, even if a smaller one. You can’t pick and choose which channels of the base package of twelve you want and discard the rest, and you certainly can’t forego any of those base channels if you want any of the genre packages – especially important when Dish’s existing DishWorld service will be folded into SlingTV. Dish seems to be indicating it intends to keep the SlingTV suite lighter than a typical cable subscription, but make no mistake: the only reason this service doesn’t have more channels is because Dish hasn’t been able to get any other companies on board. If they could get AMC (and the other networks owned by AMC Networks), FX (and the other Fox-owned networks, including Fox Sports 1), or most other big companies’ packages of networks (especially Comcast for USA and NBCSN), they would.

Although Comcast and Time Warner Cable are the two most hated companies in America for a variety of reasons, the desire to be free of “the cable bundle” has never been about anything specific to them or their infrastructure. The channels have always been what’s mattered; how they’re delivered is immaterial. In that sense, what SlingTV is offering isn’t much different from what any other traditional cable provider is offering – something that should be especially apparent when the FCC is considering new rules that would treat Internet-delivered TV providers the same as any other cable or satellite company. TechCrunch paints Dish Network’s original launch as a challenge to the existing hegemony of the cable companies; Dish is now part of that hegemony. What makes them think SlingTV will be any different? Sure, it is cheaper than a traditional cable subscription for now, although given that cable companies often charge as much or even more than Internet alone than they do for Internet and TV, don’t expect to save all that much.

SlingTV believes access to ESPN is its killer app, but I won’t buy that any service like SlingTV is really going to break up the cable bundle unless and until it makes it easier for people to be able to not get ESPN. Anyone who signs up for SlingTV because of the programming on Food Network, Disney Channel, or A&E is supporting ESPN’s hegemony over the sports landscape every bit as much as they would be if they kept their existing cable subscription – and people who are interested in sports won’t get access to the regional sports networks that may be the real reason they aren’t cutting the cord. ESPN is the big winner here: it gets to appeal to “cord-cutters” without losing its hold on its lucrative business model that collects millions of dollars from people with zero interest in sports and funnels that into programming like the NFL playoffs and the College Football Playoff that make it a peer of the broadcast networks. SlingTV does nothing to break up that hegemony; it preserves it.

So to me, the real interesting part of this announcement (besides the ability to sign up and cancel the service any time with no long-term commitment) is that Dish is not including the broadcast networks, not even ABC, in SlingTV, even though a big reason it was able to get Disney on board was to settle ABC’s suit against the company for the AutoHop feature to skip commercials on broadcast networks. When Dish eventually does offer them, it’ll be as a separate add-on. The implicit message: We shouldn’t have to pay retransmission consent fees and jack up the price of our slimmed-down, low-cost service when our customers tend to be urban and capable of picking up broadcast signals with an antenna (not to mention, can watch a lot of broadcast shows on Hulu). I’m not sure they’ll be able to do that if the FCC makes them play by cable’s rules, since cable companies are required to carry any station that doesn’t ask for retrans on their most basic package and do the same for any station they agree to pay retrans for, and I’ve come out against “a la carte” proposals that make it easier to go without broadcast stations without making it easier to pick and choose cable networks like the “local choice” scheme that was floating around Congress a while back. But considering Dish has made clear it doesn’t see Sling TV as a full-fledged replacement for cable or satellite, if they can in fact make broadcast stations optional, perhaps it will serve as an impetus for broadcasters to invest in their signals instead of disdaining their own nominal medium in favor of being just another kind of cable channel.

The Other Threat to Net Neutrality

The issue of net neutrality flared up again earlier this week when, after FCC Chairman Tom Wheeler introduced a new “hybrid” franken-proposal that ignored all the reasons why so many millions of comments supported Title II reclassification by only putting half the market (a half that had never been seen as a separate market before) under that bracket of telecommunications law, leaving everyone unhappy in the process, and the same day net neutrality supporters rallied in front of Wheeler’s house, President Obama came out swinging, not only staunchly defending Title II reclassification but laying out several specific principles he’d like to see in any net neutrality plan. Combined with the public smearing Sen. Ted Cruz received after comparing net neutrality to Obamacare, it’s become apparent that this will end with the Internet being reclassified under Title II, or strong, litigation-proof net neutrality protections being installed in some other way, no matter how long it takes. The masses of the Internet will not let it end any other way.

But if you think the broadband companies are going to stop fighting to tear down net neutrality, or that simply codifying it in law will prevent them from undermining it in other ways such as Comcast’s interconnection blackmail of Netflix, you’re mistaken. There’s something else the FCC is doing, far more under the radar, that is just as much a threat to the ideal of net neutrality than their explicit Open Internet rules – maybe a bigger one, because it could completely undermine the ability to maintain net neutrality in the long term. That would be the broadcast incentive auctions recently postponed to early 2016.

Read moreThe Other Threat to Net Neutrality

Quote of the Day:

It really begs the question about, how are we going to get our sports in the years ahead? If technology changes in the next five years as much as it’s changed in the last five years, we’re not going to be getting our sports by cable TV. I don’t know what it’ll be. But increasingly, we’re using mobile devices … Google Network and Apple TV and things like that are coming into play. … I’m not sure the world needs another exclusive college cable network. Rather than trying to do what everybody else has done, I would much rather try to figure out what tomorrow’s technology is and get on the front side of that and be a part of what happens going forward and monetize that.

-Big 12 commissioner Bob Bowlsby, at the Oklahoma Sports Hall of Fame’s Leadership Luncheon, asked about how the Longhorn Network affects his long-term TV plans (read: how it keeps him from starting a conference network).

It’s hard to say whether or not he’s just saying this to try to save the appearance of being behind the eight ball because he can’t get on the conference cable network gravy train the way the SEC, Big Ten, and Pac-12 have. It’s also hard to say what trying to “get on the front side of tomorrow’s technology” would entail, certainly beyond what’s already covered by the conference’s contracts with ESPN and Fox (color me skeptical that it would involve “Google Network” or Apple TV in any significant way). But just the fact he knows enough about these things to make these points is very encouraging. Of course, if “tomorrow’s technology” is what I think (or at least hope) it is, I’d say the ACC is further ahead than the Big 12, which seems to have gone backwards on that front.

Against the Tyranny of Nielsen

Last year, Nielsen announced that it would be adding “broadband-only homes” to its television ratings sample and viewing universe. This category consisted of people that not only didn’t subscribe to cable television, but didn’t even have an antenna to watch broadcast television, and thus couldn’t watch any programming on any platform that Nielsen normally measures, so their inclusion in the sample must have seemed superfluous and useless. As a result, ratings, and the estimated universe of people that could watch cable channels, fell. On the other hand, Nielsen also announced that starting this year, it would begin including online viewing of content in its TV ratings… so long as the ad load on those programs was exactly the same as when it aired live.

This unusual outcome is the result of the tension between Nielsen’s actual role in the television industry and the role it inadvertently fills as a result of it. Television networks pay Nielsen to tell them how many people are watching the ads accompanying their programming, because the ads are what are paying for the programming and the people who buy ad time want to know if they’re getting their money’s worth and where they should spend it if they want to. For most of Nielsen’s history, that meant measuring how many people were watching the programs, and as such Nielsen became the barometer for how popular America’s TV shows were.

As time-shifting became more popular, however, and as Nielsen’s measurement practices became more refined, these two purposes became increasingly at odds with one another. Today the currency in the TV industry is “C3”, or how many people are watching each minute of commercial time either live or within the first three days of DVR playback; some media buyers this year have adopted “C7” as their currency, which is exactly what you think it is. In other words, if you fast-forward past the commercials, your viewing counts for jack all to the networks even if you’re in a Nielsen household. Neither of these are widely reported, but it doesn’t matter because most people do, in fact, fast-forward past the commercials, and waiting the amount of time it takes for the C3 or C7 ratings to come out isn’t always practical (especially if you have a ratings flop on your hands), so the live-plus-same-day ratings that are widely reported are good enough for most purposes. (Nielsen’s definition of “live” is so restrictive that there are enough same-day viewers watching enough commercials to be useful.)

Nielsen’s move to counting broadband-only homes is a direct response to criticism from outside the TV industry that Nielsen dramatically undercounts the true popularity of many shows, especially in the most valuable demographics, by not counting viewership on alternative platforms besides live TV and time-shifted DVR – an attitude that expects and assumes Nielsen to be primarily concerned with its role as barometer of shows’ popularity. But in order for measurement of online viewing to be in any way relevant to the networks that are only concerned about who’s watching the commercials they sold for those shows, Nielsen has to impose the bizarre “same ad load” requirement, which no network or online platform would put in place without the incentive of being counted in Nielsen ratings, preferring dynamic ad insertion techniques that can adjust based on a viewer’s location and Web browsing habits. I try to stay away from authenticated TV Everywhere services, but I did have occasion to use my Dad’s account to use WatchESPN recently, and I found that even there, even while watching the live feed of an ESPN channel that is supposed to be no different from watching it on television, the ads were not the same as on TV, meaning no one using WatchESPN could be counted in Nielsen ratings. Heck, there were one or two commercial breaks where no ads were inserted into the feed, and I still wasn’t getting the ads that were being shown on television, just a placeholder slide.

It is certainly true that the model of television on which Nielsen is based is becoming outdated, but the reality is that Nielsen shouldn’t have had to create such contortions to count online viewing towards its TV ratings, because no matter how many viewers aren’t being counted, as far as the networks are concerned, Nielsen is working exactly as it should. The problem is not that Nielsen is falling short on the goal it doesn’t really have to serve as barometer of the popularity of television shows; the problem is that that role is still relevant even though Nielsen should not really be concerned with filling it. The problem is that the success or failure of television shows is staked to a system that, structurally and by design, can only capture a fraction of its popularity. And this is not a problem with Nielsen, but with the networks.

The vast majority of big-budget, big-studio shows are still widely assumed to need a place on a linear television network’s schedule, to be underwritten by the network and distributed by them to the network’s audience. The network, however, only cares about the show – or at least, should only care about the show – insofar as the show can attract people to the advertisements they can intersperse throughout the show. If not enough people are watching it live to serve as a captive audience for the commercials, the network can and will cancel the show. If a show is on network television, its existence is dependent on the commercials the network airs, or else the network can cut bait and abandon the show, potentially driving it out of existence no matter how popular the show may be on platforms that don’t expose their audience to the same commercials.

Shows should not be dependent on this system, on networks that will stake the show’s existence to a particular set of commercials inserted into the network’s feed. The presence of a show on a linear television network, and thus a show’s ability to attract audiences to a linear network’s commercials, should not be a precondition for a show’s existence; rather, a show should have a presence on a linear network only if that network has reason to believe that they can sell commercials off it and attract the show’s audience to those commercials by giving them a reason to watch it “live”. We’re a long ways away from the day when a show’s presence on linear television is a recognition of its value to the network rather than a precondition of its existence – we’ll know that day has arrived when a show that originated on the Internet moves to linear TV rather than the other way around – but we’re at least seeing halting steps towards throwing off the tyranny of the linear networks and of Nielsen, through the original shows on Netflix and Amazon and through Yahoo’s recent move to give Community one last season. The arrangement between CBS and Amazon for Under the Dome also frees that show’s fate from being dependent on the Nielsen ratings, though as it happens the show has done quite well for CBS, especially for a summer show.

Just as I don’t think linear television is necessarily completely obsolete in the age of the Internet (and it may in fact be of paramount importance, if lessened compared to pre-Internet days), so I don’t think Nielsen needs to worry about its core business going under; even with the prospect of broadcast linear television colonizing mobile devices, given the appeal of that prospect to the consumer and the basic nature of the technology there will always be a place for Nielsen’s measurement methods so long as the transmission of advertising isn’t dependent on a two-way connection over the Internet. I only hope that, so long as linear television remains the primary mode of video consumption, Nielsen does not overly hobble the prospective future where it is not, and that by the time that future arrives both networks and ad buyers (and to some degree the public) will be fully aware of Nielsen’s limitations.

Will Three Million Comments in Favor of Net Neutrality Sway the FCC – and Should They?

Over the past few months, the FCC has seen a level of public participation unprecedented in the agency’s history. Largely spurred on by John Oliver (not to give short shrift to numerous consumer groups mobilizing the masses), over three million comments were filed in the FCC’s net neutrality proceeding, many by people who couldn’t name more than one or two commissioners and who only knew the name of chairman Tom Wheeler because Oliver told them. The overwhelming majority of those three million comments begged the FCC to preserve net neutrality and an open Internet and not to adopt “paid prioritization” rules that would undermine the concept of net neutrality, with the only comments in favor of paid prioritization being cable companies and people paid off by cable companies.

With so many people weighing in on the issue, surely the FCC will bow to the will of the people and pass real net neutrality, right? According to Seeta Peña Gangadharan writing in Slate, and drawing on his experiences with the 2002 and 2006 ownership reviews when the FCC ignored the input of hundreds of thousands of comments from ordinary Americans, the answer is a resounding no. Depending on how cynical you are, that may not be surprising; what may surprise you is what Gangadharan says are the reasons why, something that he says “points to a much larger tension between federal agencies and the public—and one that we must address if we want our agencies to help restore trust in government and strengthen their civic purpose.”

According to the FCC commissioners and staffers Gangadharan spoke to, the public has a misconception that the comment process is like a vote, when it’s actually “more like a court proceeding” where “systematic, reliable evidence, not emotional expressions” win the day. They considered the many comments filed in the ownership proceeding by people who probably never filed comments to the FCC any other time as “emotional and superficial content”, “prone to error” and “lack[ing] truthfulness”. As one staffer put it, not “usually very deep or analytical or, you know, substantiated by evidence, documentary or otherwise. They’re usually expressions of opinion.” Another went so far as to say some of the comments they received were downright “hilarious” because “you know you’re reading something, and you know it’s not true. And you’re guessing, you know, the person is hallucinating.” As a result, many comments don’t even make it very far in the commission’s bureaucracy, because in the eyes of staffers, “they [don’t] need to”. As Gangadharan puts it, to sway the commission you need to “become a lawyer, economist, or researcher and meet the commission’s expectations for what reasoned input really means.”

If the majority of comments from ordinary citizens to the FCC fail to “meet the commission’s expectations for what reasoned input really means”, perhaps that’s because they aren’t “reasoned input” by anyone’s expectations, and if they consider those comments “emotional and superficial content”, perhaps that’s because they are. By and large, when “ordinary citizens” file comments to the FCC they not only tend not to be all that well-argued, resorting to “emotional and superficial” appeals, they often are riddled with spelling, grammar, capitalization, and punctuation errors. The Sunlight Foundation characterized “at least” 60% of the 800,000 net neutrality comments the FCC had received at that time as “form letters written by organized campaigns”, in other words, letters written by people who were able to cogently and coherently articulate their position but which got repeated over and over by numerous people. The fact that a bunch of people were able to submit the same comment over and over and each get counted suggests the commissioners and staffers are not far off in thinking most people, even those that should know better, see the comment process as a “vote”; if the comment process is supposed to be a battle of rational arguments, those numerous repeated comments shouldn’t even count towards the total, but should simply be listed as signatures on a single petition. Otherwise, it’s what people who disagree with their position can dismiss as astroturfing. What does that leave? Here’s a not-quite-random assortment of some of the comments from the remaining 40% – some of which may out to be form letters! – that were posted to the FCC’s site right before the Internet Slowdown protests resulted in a surge of form letters, all of them reprinted in their entirety:

Please do not change the current laws regarding net neutrality. Even under the current laws, ISPs in America are oligopolies in the best cases and monopolies in many rural and suburban areas, and abolishing net neutrality would give them an even stronger stranglehold on the market. The Internet in its current form is a precious resource and should not be sold out for the sake of the bottom line of a hand-full of companies who just so happen to be some of the richest lobbyists in Washington. At the very least, please honestly consider the repercussions of abolishing net neutrality before acting to protect the interests of Big Cable.Daniel McArtor

Net neutrality is the First Amendment of the Internet, the principle that Internet service providers (ISPs) treat all data equally. As an Internet user, net neutrality is vitally important to me. The FCC should use its Title II authority to protect it.abc

I believe in the free accessibility of the internet for all people. The internet is a right that should not be filtered or throttled by corporations or governments. Please defend the free internet by maintaining net neutrality.Stephen Winter

Based on my knowledge internet was invented by research organizations and then given to public to bring the whole world closer. Verizon or comcast do not have any right over it just because they own the hardware which facilitates the internet. These companies precisely understand the importance of the internet, how everyone is dependent on it, and it is just a scam to make more money on one of the basic commodities in this country. I oppose the plea by comcast and verzion primarily for the following reason: It is not wrong for these companies to provide faster service to companies who would want to pay more, but my concern is how it will affect other companies/people who cannot afford the speed. I work with entrepreneurs who work on internet start ups, who hardly have any money or they are usually on a strict budget, but our projects sometimes compete with bigger companies. My biggest concern is as it is start ups face uneven field to start off. Now, on top of that if internet provider companies start providing faster service for the rich companies then the field gets even more uneven making it harder for small companies, startups, small businesses to compete with their rich counterparts. Last but not the least, I have a comment on Comcast. Comcast which is the largest internet provider.Gansh Soms

Stop the corporate greed, you stupid twats.  The public actually cares about this issue.  Baaaaaaaaaa.Common Sense

The FCC should amend its rules to ensure continued net neutrality.  The pending proposal does not do that.  Instead, it allows an already heavily concentrated industry to gain even greater control over public access to information by selling rights to a “fast lane.”  It also puts businesses, particularly new entrants in the market and those with less capital, at a clear competitive disadvantage.  This will harm the economy in the long term.  The proposed rule is poor public policy and should be rejected, and replaced by a rule that treats these corporate behemoths like the common carriers they are, as a practical matter.  Thank you for considering my comments.Darrell Murray

When people speak of the greatest inventions of mankind we speak of things like soap (combating bacteria and disease), steel (providing strength to structures our mind can conceive of), and the printing press (allowing the common man the chance to learn to read). Prior to the printing press and the Gutenberg Bible, literacy was solely for the church and the very few. The internet, in its current iteration is available for all and  the greatest tool to spread information. Please do not move forward with the Net Neutrality act. There is NOTHING to be gained by the people who use the internet if this is to go forward. Thank you, Charles Schoenherr

KEEP NET NEUTRALITY! KEEP NET NEUTRALITY! KEEP NET NEUTRALITY! I don’t want the cable companies bending me over my work table and @*!X#$ me up my nether regions. The internet doesn’t need a no move lane and laser speed limousine lane. Fire Wheeler. Putting him in charge of the FCC is like hiring a convicted child molester to baby sit your kids!Edward Mosle

Please protect net neutrality. The Internet and its use by regular consumers has advanced far enough that internet/broadband service providers should be treated as any other telecommunications service provider and regulated as such. Competition is good, and consumers should have multiple choices, but for a provider to interfere with the speed of data reaching the consumer or charging unfair prices by creating “fast lanes” is not fair to the consumers.Anahit

I favor HS Internet but I favor more competition among vendors for the consumer & retain the Tier pay plans for users alone & to regulate ISPs as Utility IE Information Utility alone can do much to expand Internet. Pricing should be competitive for consumers esp small business & home users. CUT regulations that deter this from marketplace. CUT any FCC bureaucracy that can impact Net neutrality alone BUT expand FCC enforcement div alone. & one should be able to change users for HS Internet like one can with mobile phones. Hate the mobile phone contracts anyway, consider wireless phone carriers as a Utility like Pacific Bell was years ago.Stephen Russell

Former Democratic Commissioners Michael Copps and Jonathan Adelstein, who were on the commission for the 2002 and 2006 proceedings, have “argued that labeling the input of all ordinary citizens as worthless and emotional is misguided”, that the stories they tell “spoke to the failings of a consolidated media marketplace.” Going off their comments, Gangadharan calls on the FCC to “concede that personal experience can be substantive, too”, just as agencies do with consumer complaints, and set a precedent for all agencies to “treat[] rulemaking as a genuine democratic process, that value[s] peoples’ voice, history, and context”. But court proceedings, and other big decision-making processes, are not supposed to make decisions based on anecdotal evidence, but on actual data – especially since most ordinary people don’t have any concrete anecdotes that would argue against net neutrality. If there is a “much larger tension between federal agencies and the public”, it’s even deeper than Gangadharan indicates, because if people are simply sending in their personal anecdotes it’s because that’s what sways ordinary people like themselves, so if there is anything wrong with government agencies it’s in expecting human nature to be anything different from what it actually is. In any case, most of the above comments aren’t even anecdotes; at best they’re just parroting the talking points from the numerous places covering the issue. The commission shouldn’t make their decision based simply on how many comments come in on one side of the issue if the vast majority of them are irrelevant crap that add nothing to the debate (especially those coming from the Internet trolls Oliver specifically called on to comment), and if they do, it will be more out of consideration of the PR consequences, a recognition of the sheer number of people aware of the issue and their reaction to the FCC’s proposals, than anything else.

I filed my own comments to the FCC earlier this month on the current ownership review, which does not seem to have attracted the same intense interest as the ones Gangadharan references (perhaps because the commission is proposing more tightening of regulations than loosening this time around), and read through the rounds of comments that had already been submitted as part of my research for it, and as such I feel I have a good sense of the sorts of comments the commission is actually looking for. Assuming even those comments that do “meet the commission’s expectations for reasoned input” make any impact on the commissioners, as opposed to their minds already being made up for whatever reason on most issues (many of the comments on Gangadharan’s piece point to money being more of a motivating factor than quality of comments in the Commission’s decisions – see Wheeler’s cable-industry-lobbyist background), I think ordinary Americans can get their comments noticed by the FCC if they have a solid understanding of the issue and the arguments being thrown around about them, and at least a basic college-level understanding of rhetoric and argument. I invite you to look at my comments on the ownership review; they’re not perfect (I cite Wikipedia multiple times, including at least one thing that may be just plain wrong, and may be wrong about other things), but at 20 pages and with copious citations, as well as actually confronting the stakeholders’ arguments on the issues I address, I’d like to think it at least provides a framework for ordinary citizens to at least try to compete on a level playing field with the big corporations.

Ultimately, I think the real problem is that the things the FCC does just don’t get much attention from the media, except when it comes to super-obvious things like net neutrality, even though the things the FCC does affect every American. Of course, the big media companies probably don’t want anti-consolidation citizens weighing in on proposals that affect them, but even blogs don’t cover the FCC on a regular basis, focusing on a few big issues like net neutrality or the big cable company mergers with obvious impact on the consumer, without any appreciation of the larger context surrounding the debate on those issues (or even a nuanced discussion beyond the talking points), and mostly when the FCC’s proposals are things they hate (the sports blackout rule notwithstanding). There’s been little coverage of the incentive auction or the general issue of spectrum management (and those that are aware of it tend to support giving more spectrum to wireless companies, unless they’re specifically interested in the state of broadcasting, even though preserving and supporting broadcast TV is vital to preserving net neutrality in the long term), or of the ownership review, or of issues surrounding retransmission consent and a la carte, or of the House Communications and Technology Subcommittee’s Republican leadership soliciting input on a proposed update of communications legislation. These are things that could have as much or more impact on the lives of Americans as the issues that get all the attention, but they tend to go under the radar. Having an FCC that works for the people may be more important than with any other agency, because preserving net neutrality and a diversity of voices in general has the overall effect of strengthening our democracy and ensuring the rest of the government works for the people as well, and thus keeping an eye on the FCC is more important than with any other agency as well.

MLB is fixing its blackout policy!!! (not really)

Everyone loves to hate MLB’s “outdated” blackout policies. Of course the NBA and NHL have similar policies and presumably don’t allow you to watch in-market teams online, and they don’t come in for nearly as much hatred, so perhaps the hate towards MLB’s blackout policies is more part of a larger rush to rag on MLB rather than cause of what’s ailing it. Or perhaps it’s because NBA and NHL teams’ blackout areas don’t reach out to a ridiculous extent with no regard to the actual availability of the teams, with the result that areas further away from any MLB teams end up blacked out of more teams than they were if they were closer, with the end result that if you live in Charlotte, the fifth-largest market without an MLB team, you’re blacked out of the Nationals, Orioles, Braves, and Reds, with some markets blacked out of even more teams!

But fret not, because MLB Advanced Media may be about to fix those notorious blackout rules – with a catch:

In an interview this week, Bob Bowman said he is optimistic that a deal could be reached soon with various cable operators, channels and ballclubs. The catch is that even with an MLB.TV subscription, which starts at $20 a month, fans will also need a cable or satellite TV subscription to view hometown teams at home.

That doesn’t seem like it would actually fix any of the problems people have with the blackout rules. People who don’t have a cable subscription still won’t be able to watch any of their local teams’ games; okay, fine, baseball doesn’t want to fix that problem because they’re raking in too much money from RSNs, and baseball games on RSNs are the biggest obstacle to cord-cutting at the moment because of the tremendous popularity of local baseball teams. But presumably, in order to authenticate your cable or satellite subscription you’d need to actually get the RSN your team is carried on, and if you get the RSN your team is carried on you wouldn’t need MLB.tv or MLB Extra Innings to watch it in the first place!

It seems like this change is oriented more at solving another, very real but mostly unrelated, problem: how slow RSNs have been at embracing streaming. The Yankees shut down their ridiculously-expensive streaming service after five underwhelming seasons this year, leaving no US teams with any in-market streaming capabilities. The main issue appears to be that RSNs want to offer streaming at no additional cost while teams want to be reimbursed on top of what they’re already being paid to be on the RSN to begin with, at a time when virtually every national rights deal includes streaming rights, and the distinction between carriage on linear television and streaming services is an artifact of times past. MLBAM’s solution appears to be using the existing MLB.tv infrastructure to create in-market streaming for all teams through brute force, with an eye towards seeing how much extra revenue they can collect that way while still forcing customers to authenticate (though don’t expect it to be very successful when you’re charging more than what YES was charging – $20 a month v. $69.95 a year). If that’s what you want to do, that’s great, but don’t bill it as “fixing the blackout rules” when it’s not.

Is There a Place for Common Sense in Supreme Court Decisions?

The Supreme Court Wednesday ruled 6-3 against Aereo, declaring the start-up’s array of miniature antennas available for rent to consumers in violation of copyright law. Astoundingly, the three dissenters were Justices Scalia, Thomas, and Alito, three of the court’s more conservative members. If you had to pick one person to symbolize the modern Supreme Court’s tendency to favor moneyed interests over ordinary Americans, the law, intent of the Constitution, and precedent be damned, it would probably be Scalia, followed by Thomas, then Alito and Chief Justice Roberts neck-in-neck. I would never have expected the conservatives to actually believe what they say they do enough to stand with the consumer and the scrappy, innovative start-up at the expense of the big, multi-national conglomerates, and as much as Democratic politicians may be in bed with Hollywood, I never would have expected every last one of the liberal justices to stand with the big corporations against the ordinary American. I know President Obama’s Justice Department filed a brief supporting broadcasters, but that was widely seen as disappointing, not sadly expected; I suspect this is an issue on which the Democratic decision-makers are well out of step with their rank and file. Maybe I’m just naïve (support in Congress and opposition among the public to SOPA was, after all, largely bipartisan), but it would be hard for me to deal with it if this turned out to be an issue on which I stand with conservatives and against Democrats.

But that’s not what I want to talk about. Rather, I want to talk about the tendency for pro-Aereo corners of the blogosphere (as well as Aereo itself) to decry the decision as being obviously wrong, to gloss over the sketchier elements of what Aereo was trying to do, take its own description of it at face value, and dismiss the majority’s reasoning as the “looks-like-a-duck test“, to speak of Aereo’s setup being designed to follow the law as opposed to “going around” it as though that were more than a semantic distinction. One of the things Americans don’t like about the legal system is the tendency to create overly complicated documents written in horrendously obtuse language with no resemblance to anything ordinary Americans could recognize so that people can get off on obscure technicalities. But when the Supreme Court finally looks past the technicalities and boils things down to what they actually are, but we happen to be on the side that wanted to take advantage of those technicalities, suddenly we want the court to follow the obtuse legal language, ignore what we’re actually trying to do, and let us skirt through the loophole?

I personally felt that, while Aereo was clearly trying to take advantage of a loophole in the law, it was the place of Congress, not the Supreme Court, to close it, and it sounds like the commenters on (the very liberal) Daily Kos agree with me. But I don’t think we’re giving the position the majority accepted enough credit. Leaving aside the technicalities of how it all works, what Aereo was selling was the ability to watch broadcast television stations, regardless of whether you had the ability to view them at your current location if you had an antenna, indeed without you needing to worry about having an antenna or where it was located. You, the viewer, don’t see where Aereo’s antenna is and don’t even necessarily know anything about where Aereo is getting the signals from. All you know is that you are giving Aereo money and they are supplying you with a bunch of television channels you may or may not be able to receive otherwise. Boiled down to those facts, there really is very little difference between Aereo and basic cable service (and some of the things Aereo had said about potentially carrying cable channels didn’t really help their case).

What this shows is that our communications and copyright laws are woefully outdated and rooted in assumptions that don’t hold water, that failed to anticipate technological developments that rendered the technological distinctions encoded in the law obsolete. The entire Aereo affair had a company resorting to technological contortions to provide a fairly basic service there was a clear demand for and broadcasters being undermined by the very nature of, and wanting to be rid of, their own nominal method of delivery, their own neglect of which helped create the demand for Aereo in the first place (and while they’ve won this battle, they may ultimately lose the war). The court said that if Aereo wanted relief they should go to Congress when they should have said that to the broadcasters, not only because that would have been the right approach but because the broadcasters would likely have been more able to get that relief. But putting the onus on Aereo does give Congress incentive to clear up a regulatory framework that assumes the primacy of the obsolete technology of cable television and undermines the potential of broadcasting, while creating perverse and unintentional disincentives for maximizing the distribution of content.

The Nexus of Television and Sports in Transition, Part IV: Pricking the Bubble

The cable business model might be the greatest scam in history, and the best part is that it’s entirely legal. It’s not merely that cable networks get to collect money from the dual revenue streams of advertising and subscriber fees. It’s that they collect subscriber fees from every single person who subscribes to cable. ESPN and ESPN2 were in about 96.2 million homes each in March. ESPN2 collects about 70 cents a subscriber, so the two of them combined take $6.24 out of your cable bill. Do the math: 96.2 million homes times $6.24 means ESPN is raking in $600 million dollars every month before it sells a single advertisement. That adds up to $7.2 billion every year from subscriber fees alone, the vast majority of ESPN’s yearly revenue – and it’s going up so fast it crossed the $7 billion threshold just last year. Not a bad chunk of change if you can get it. By contrast, TNT – which is actually in more homes at 96.9 million – is only collecting $129 million a month or $1.5 billion a year, and it wouldn’t be collecting nearly that much if it didn’t have valuable NBA inventory. The amount ESPN pays each year for Monday Night Football or even the SEC would chew up most of that amount.

These subscriber fees aren’t determined strictly by popularity; in terms of total viewership, the USA Network is actually more popular than ESPN, thanks to a combination of WWE Monday Night Raw and a collection of critically-acclaimed and popular original series. But USA collects only 71 cents a subscriber, about sixth-most in cable and roughly neck-and-neck with ESPN2, because if you drop USA you’re only pissing off a few wrestling fans and fans of a few original series, but if you drop ESPN you’re pissing off fans of just about every popular sport under the sun, including the almighty NFL – and those fans can’t live without their sports. Even so, even by the most optimistic estimates, only about 80 million of that 96.2 million watch any ESPN at all that’s taking so much of their cable bill. Far fewer, probably less than a third, would decide ESPN is so indispensable they would pay six dollars a month for it. Yet ESPN is raking in the dough from every one of those 96 million. ESPN’s certainly happy with this state of affairs, and so are its rights partners, who get to count the money from the lavish rights fees ESPN pays them. No wonder everyone else wants in on the action. But if you’re an ordinary cable subscriber, especially if you’re not a sports fan, you’re not so happy.

For several years now, many have called for the government to step in and do something about the subsidization of sports networks, and media companies have resisted those efforts mightily. The most popular idea is to force cable companies to offer their wares a la carte, allowing you to only pay for the networks you want; Senator John McCain introduced an a la carte bill last year, and the effort has attracted the support of none other than Senator Richard Blumenthal, who represents ESPN’s own home state. Media companies claim that most channels are underpriced compared to what they would receive in an a la carte world, that cable is still a good value for the vast majority of customers who would gladly pay as much as what they do now for what they do watch, and that a la carte would actually end up hurting consumers in the long term: because each network would have far fewer customers, it would need to jack up rates considerably. On average, people would end up paying the same or more for their cable than they do now and getting less for it, although sports fans would likely pay more and non-sports fans would pay less. Media companies claim the effects would be so catastrophic that the vast majority of cable networks would go out of business, especially those targeted towards minorities and underserved communities; the number of networks that would be left might be in the single digits.

You could poke several holes in that logic and point to evidence that the eventual outcome might not be quite so dire. But even if things happened exactly as the media companies say, someone with a good grasp of the overall video landscape might find reason to say: “So?”

It’d be one thing if sports fans were merely passionate enough about their sports that if a cable operator were to drop a sports network they’d leave en masse. But it turns out sports fans are incredibly important to the other half of cable’s dual revenue stream, advertising, as well: as said before, they are disproportionately likely to be in the male 18-49 demo, which just so happens to be the most valuable demographic to advertisers, and they’re the one type of programming that’s DVR-proof, meaning sports fans are a captive audience to actually watch the advertisements. But these two things are connected in a way that casts a long shadow over the future of the entire television industry.

Concerns over time-shifting are nothing new; the television and movie industries attempted to kill the VCR when it came out, and once VCRs caught on, sports rights already became incredibly valuable for their immunity to time-shifting, to the point that many of the same points being made over the sports rights bubble, as Deadspin pointed out, were being made in 1989 in response to CBS’ multi-million dollar baseball deal. But these days, DVRs are, or at least should be, the least of television programmers’ worries, if not so much advertisers’. The biggest reason why those age 18-49 are so valuable these days is simply because they watch less television than older people, and while that has a number of reasons, the biggest is because of the rise of the Internet as a source of entertainment.

Well aware of the futility of attempting to fight piracy and the rise of YouTube, content providers have increasingly embraced the Internet as an alternative venue for their content, through sites such as Hulu and Netflix. But the Internet challenges some of the deepest assumptions of the television industry in a way few within it have recognized and, to the extent they have recognized it, they have resisted at all costs: if non-live programming can be watched any time you want it, why does it need a spot on a linear television schedule at all?

Before the Internet, the only way to consume content was to watch it when someone else told you it was on, unless you rented a video from the video store. You visited the movie theater when they decided the movie was going to start; you watched a program at the time the broadcast station or cable network scheduled it for. Each television station or network, even with the increased capacity of cable, had to be assigned a certain portion of spectrum, a channel, that could be used to show one piece of video and one stream of audio at a time, so any program that wanted an audience on television had to find a channel that would show it at a particular time. But once a video is on the Internet, you can pull it up any time you want. You don’t need someone else to schedule it for you. The traditional linear television schedule is an artifact of these pre-Internet days.

It’s entirely possible the prospect of hundreds of channels falling by the wayside may end up falling on deaf ears, because we may not need hundreds of channels anymore. It’s very possible that the vast majority of programming that would find itself without a home because of the collapse of so many cable channels would be able to find a home on the Internet without a problem, though admittedly the financial infrastructure that would support that may not be in place yet. It’s even tempting to wonder if the Internet could pick up the slack even of live programming, which would render television completely obsolete.

More is at stake here than just sports. As much as the likes of CBS, Fox, and NBC may want a powerful sports network for their own sake, they also want a popular network cable companies can’t afford to drop. That way, they can force those companies to carry a bunch of other, far less popular, channels.

Just six companies own the vast majority of channels on your cable lineup. Go down the list of cable networks with the most penetration. Once it’s properly ordered, at the top of the list is the Weather Channel, which is owned by Comcast, which also owns NBC, USA, Bravo, E!, Syfy, Oxygen, the Esquire Network (formerly Style), and G4, besides NBCSN and the Golf Channel. Next is the Food Network, a relative independent owned by the E.W. Scripps Company, which still owns thirteen ABC and NBC affiliates as well as HGTV, the Travel Channel, the Cooking Channel, and DIY Network. TBS is owned by Time Warner, which also owns TNT, Cartoon Network, CNN, HLN, HBO, Cinemax, truTV, and TCM. Discovery Channel is another relative independent owned by Discovery Communications, which also owns TLC, Animal Planet, and a host of smaller networks. Nickelodeon is owned by Viacom, which also owns Comedy Central, MTV, Spike, VH1, TV Land, BET, CMT, and numerous MTV and Nick spinoffs. A&E is owned by A+E Networks, a joint venture of Disney and Hearst (split 50-50 this time) that also owns Lifetime, History, and smaller networks like Bio and H2. The Disney Channel is, of course, also owned by Disney, which besides ESPN and ESPN2 also owns ABC Family, Disney XD, and others. AMC is another relative independent owned by AMC Networks, which also owns IFC, We, and Sundance. Fox News Channel is owned by Fox, which also owns FX, the National Geographic Channel, and spinoff networks Fox Business, Nat Geo Wild, FXX, and FXM, to say nothing of Fox Sports 1 and 2.

CBS is the last of the big conglomerates, owning Showtime, TVGN, and the CBS Sports Network. The broadly-distributed commercial networks not owned by one of these companies can be counted on one hand, and most are owned by formidable corporations themselves. A cable company that wants the popular channels – ESPN, TNT, USA, Fox News, MTV, Showtime, arguably even AMC, Discovery, and Food Network – has to carry the lesser ones. The result is a situation where a cable company’s hands are tied as much as the consumer’s are.

In the same breath that they stand side by side with media companies in opposition to a la carte, cable companies also push back against the increased price of sports networks that they’re stiffed with and left to pass on to consumers, thus either losing customers or taking less profits. They’ve been working to roll back the sports subsidy as much as they can. As far back in 2011 the president of Dish Network raised the prospect of some company deciding to go without sports programming entirely and market itself as a low-price service for non-sports fans. These days, DirecTV has started imposing a $3 fee to customers in markets with multiple regional sports networks, and multiple companies have experimented with offering sports-free packages to customers.

Those sports-free packages haven’t achieved much penetration, though, in large part because the contracts sports networks have with cable companies guarantee them a certain level of penetration, and cable companies can’t risk accidentally breaking those contracts. Moreover, the bundle works both ways: cable operators may be stuck taking lesser networks if they want ESPN, but they also can’t just drop ESPN without dropping other channels like the Disney Channel, and that means people who might not otherwise have an interest in sports suddenly have their kids pestering them to get the Disney Channel back. In turn, the contracts cable networks have with leagues and especially conferences require them to have a certain level of penetration.

And because of this, even the relatively modest advent of the sports-free package has the potential to completely pop the sports cable bubble. ESPN only has the rights to the new college football playoff because it happens to be in the vast majority of households. How many leagues and conferences would bail on ESPN once people start electing not to pay for it en masse, leaving only sports fans still getting it? How many sports would be willing to risk completely shutting out the casual fan? Considering how few sports went the way of boxing, with all the top-caliber fights on pay-per-view and the remaining fights of any consequence on premium networks like HBO, the answer may not be something any of the programmers of sports networks would like.

There is one way to collect ESPN-type money, at least on a per capita basis, in cable. That’s to run a regional sports network airing the games of local MLB, NBA, and NHL teams. $2.50 is the baseline subscriber fee in the regional sports business, and more than a few charge north of $3; some even dare to demand more than what the mighty ESPN charges. As a result, teams have benefitted from the sports rights bubble as much as larger leagues and conferences – especially in baseball.

When the New York Yankees founded the YES Network in 2002, it was a milestone in the history of baseball. Under Bud Selig’s tenure as commissioner, baseball has attempted to even out the imbalance between the “haves” and the “have-nots” without instituting a salary cap by means of various revenue sharing schemes. The Yankees are indisputably one of the “haves”; in fact, after one luxury tax went into effect, the Yankees were the only team in all of baseball to be affected by it. The Yankees collected a rights fee from YES like from any other RSN, but it also owned a sizable chunk of the network itself – and the money it raked in from the network’s profits, unlike the rights fee, wasn’t subject to baseball’s revenue sharing. In a sport without a salary cap, that loophole was huge for the Yankees to maintain its spot atop the heap.

The rest of baseball took notice, and these days, it seems like if you pick a baseball team at random they probably own an RSN – even some of the more unlikely ones, like the Cleveland Indians who sold their SportsTime Ohio network to Fox last year. After purchasing the SportsChannel and Prime networks in the 1990s, Fox had attained a near-monopoly in the RSN business and attempted to mount a challenge to ESPN with them using the overall branding of “Fox Sports Net”; it failed, but Fox still had a lucrative revenue stream and a lofty position it would be hard to knock them off from. That is, until Comcast began offering teams equity stakes in its networks – the Cubs, White Sox, and other Chicago teams, the Mets in New York, various other MLB and NBA teams elsewhere. Fox had long resisted offering teams equity stakes in its networks, but eventually decided it had to offer such stakes to the Angels and Rangers to keep them in the family. Meanwhile, Time Warner Cable, after years of messy disputes with regional sports networks, decided to get in on the lucrative business themselves and launched new networks with the Lakers and Dodgers.

Yet it may also be here that the sports rights bubble is already starting to burst, specifically in the heart of Texas. Comcast recently convinced the Astros and Rockets to leave Fox and start a new regional sports network they would own a stake in, giving Comcast an effective monopoly over the Houston sports market. A year later, the network is largely considered a disaster and a laughingstock, failing to pick up carriage agreements with any cable companies other than Comcast, putting it in less than half of Houston-area households, not helped by the Astros being a laughingstock themselves as the worst team in baseball. The network has declared bankruptcy, and the Astros have accused the bankruptcy proceeding as a way for Comcast to keep the Astros from pulling out of the arrangement. If the Astros or Rockets can put good, attractive teams on the field things might start looking up for CSN Houston, as New York’s MSG learned in 2012 when Jeremy Lin caught fire for the Knicks as MSG was in the middle of a heated carriage dispute with Time Warner Cable, forcing TWC to abruptly end the dispute. That may help explain why the Rockets signed Lin that offseason. But a playoff Rockets team with multiple stars hasn’t been enough to boost its RSN, at least not yet.

Across the state, the University of Texas’ attempt to bring the RSN to college sports, the Longhorn Network, has similarly struggled to pick up carriage agreements and has also been considered a laughingstock. Pushback may be spreading outside of the Lone Star State: Time Warner Cable’s LA-area networks have struggled to pick up distribution, with the Dodgers network basically unavailable to any providers that aren’t Time Warner, to the point that the Dodgers’ own legendary announcer, DirecTV customer Vin Scully, can’t get the network in his own home. For teams across the country, the money train may be running out, and cases like these may increasingly become a cautionary tale.

There is an unassuming warehouse in Brooklyn housing something that media companies are completely panicked over: thousands of teeny-tiny little television antennas. These antennas belong to a startup called Aereo, founded by mogul Barry Diller, who once helped the Fox network get off the ground and who is now – so the broadcasters, including the network he helped launch, claim – completely destroying the foundation of their business. Aereo charges customers in the New York area, and a growing list of other places, $8 a month to rent one of its tiny antennas. With those antennas, you can watch any broadcast channel you like over the Internet and even record up to 20 hours of programming using Aereo’s DVRs. And broadcasters are apoplectic about it.

They’re apoplectic because the once-fledgling retransmission consent program, created to level the playing field and allow broadcasters their own piece of cable networks’ dual revenue stream so that broadcasting could survive the rise of cable, has now completely warped their incentives and made it so that broadcasters would be first to destroy it themselves in order to save it, so they could place all their programming on cable and collect retransmission consent fees from all their customers. Literally: multiple national networks, including CBS, Fox, and Univision, have floated the possibility of pulling their programming off the free airwaves if they don’t win their court challenges against Aereo. The courts have so far yet to make any actual ruling on the matter, but for the most part have refused to grant the broadcasters’ requests for injunctions against the service. That in itself is too much for broadcasters to bear: they’ve gone so far as to ask the Supreme Court to weigh in on the matter, again before any lower court has actually come down with an actual answer.

To be perfectly honest, I wouldn’t be surprised if Aereo ultimately loses the court challenges against it, and I’m not even sure it should prevail even if it might be on the right side legally; Aereo’s claim that they’re simply making it easier for consumers to use an antenna to pick up the free over-the-air broadcast signals they’re entitled to anyway seems somewhat chintzy and getting off on a technicality, and even if they do ultimately prevail in the courts I wouldn’t be surprised if Congress closed the loophole shortly thereafter. In fact, Diller may not actually be interested in Aereo’s success in and of itself so much as pushing broadcasters to change their business model to one more based around the Internet, if his comments to the Wall Street Journal are anything to go on. But even if we took Aereo’s claims at face value, there seems to be a question that has been insufficiently explored: why is Aereo necessary to begin with? Why would someone sign up for Aereo instead of simply putting up an antenna themselves and watching TV that way?

There are several answers to that question, starting with the fairly basic one regarding the hassle of putting up an antenna at one’s house – especially when they often need to be oriented towards wherever the signals are coming from, which ordinary people can’t be expected to know, and beyond a fairly short distance away retrieving said signal requires more than just rabbit ears, but a huge rooftop antenna, which unlike satellite dishes with a similar footprint and restriction you probably won’t find anyone who’ll install it for you. Then there’s the DVR access you get with the Aereo fee, which can be especially important when most cable and satellite subscribers get their DVR service from their cable or satellite provider. But perhaps the one that is, if not most important, certainly the most telling, is mobility: the ability to connect to your Aereo antenna from any device, including your computer, tablet, or smartphone.

The DVR question is not prohibitive – it certainly is possible to get a DVR that will record straight from an antenna, though the options are limited – but the other two raise questions about the nature of the digital transition that America’s broadcasters went through in 2009. Digital signals are all-or-nothing – no ghostly, static-filled images anymore – and many areas that could have once gotten at least the latter from a set of rabbit-ears now appear to be out of luck. But the more serious issue is the lack of mobility – and it goes beyond the new digital standard failing to anticipate technologies that didn’t exist yet at the time it was adopted.

The digital transition may have actually killed off the existing market for battery-powered portable TVs – interference makes it impossible to watch an unmodified digital signal while on the move. The digital standard is thus ill-suited to be watched on anything other than a typical, stationary TV – thus not merely failing to anticipate, but actually becoming less well-prepared for, mobility becoming the new watchword among consumers. It is actually harder to watch digital television “anytime, anywhere” than it was to watch an analog signal.

To some extent, the broadcasting industry has recognized this, adopting an addendum to the digital standard that allows them to send a second signal that achieves an interference-free mobile picture by sacrificing picture quality, resulting in an image suited for smaller smartphone screens. (The portable TV market is still thriving in Europe in part because their DVB standard included a similar addendum from the start.) But even this shows the relative neglect America’s broadcast television infrastructure has fallen into without the general public making use of it and without anyone having much of a financial interest in promoting and maintaining it; not only have you not heard of it, the vast majority of devices don’t support it natively, requiring you to plug in an antenna dongle, and of the largest network stations in the New York area – the epicenter of the Aereo controversy – only three transmit mobile feeds: the NBC, Telemundo, and surprisingly, Fox stations.

If a la carte isn’t coming down the pike and a sports-free package isn’t coming to a cable system near you, there is still another way for consumers to take control of all the money being siphoned off their cable bill to pay for ESPN: cut the cord entirely. Services like Netflix and Hulu make it increasingly easy to watch the shows you want whenever you want, regardless of whether you have a cable subscription. Long feared by media and cable companies, it’s becoming a growing reality: nearly 900,000 people cut the cord in the past year, more than doubling the number the previous year, according to one analysis – and for all their problems, deals like the recent one between Comcast and Netflix could help build a network robust enough to make buffering a thing of the past and make the online streaming experience closer to on par with cable TV, which could accelerate cord-cutting (or at least “cord-shaving”) even further. And media companies are putting as many roadblocks in its way as they can.

Media companies want the Internet to work for them, not against them, but the way they tend to do so is to keep people tethered to their cable company – and thus, to the cable bundle and their millions in subscriber fees – as much as possible. The future they see is termed “TV Everywhere”, and it allows you to watch the shows you want to watch not just on your TV, but on your computer, tablet, or smartphone – so long as you “authenticate” with a participating cable provider. In the case of services such as HBO GO, this includes the ability to watch popular shows like Game of Thrones and True Blood anytime you want to. HBO already operates on the a la carte business model, but so far has refused to offer HBO GO standalone to people who don’t want to subscribe to cable, although Comcast has begun offering it to customers who sign up just for its Internet service. A considerable amount of Internet-delivered video is being restricted to maintain a structure that by all rights should be becoming obsolete – and not even everyone has the future yet: until very recently only about 20 million subscribers could get ESPN’s TV Everywhere offering, WatchESPN, which ESPN president John Skipper admits is in large part “a significant measure to preserve the current system.”

Yet cord-cutting doesn’t seem to have had an associated increase in antenna viewership, at least outside of areas where Aereo has set up shop; most coverage of cord-cutting has limited its implications to Internet viewership, to the point that most cord-cutters may not even consider putting up an antenna – in fact, some might even be eagerly awaiting the demise of broadcasting, even as they benefit from it. Cord-cutting should be a boon for broadcasters who can find themselves a willfully captive audience limited to their wares and whatever is offered online, yet not only is broadcasting woefully unprepared for the demands of the modern consumer (whether cord-cutting or no), the companies with the biggest pockets in the industry are more worried about losing their retransmission consent revenue – not to mention the revenue from their lucrative cable networks – than in any way excited over what must seem like a hollow “opportunity” presented to them by cord-cutting. As a result, the general public doesn’t even understand the modern broadcast landscape very well, to the extent it’s even aware it still exists.

These are tough times for the broadcasting industry, under attack from multiple fronts to the point of seeming to be on life support, and it’s not even clear how many people would miss it if it went away. Wireless providers covet their spectrum, cable operators would love to eliminate the free competition provided by an antenna, even broadcasters themselves would love to ensure every one of their potential viewers is paying retransmission consent fees. Those that do watch broadcast television on an antenna tend to be older and poorer, pretty much the antithesis of the people those in the television industry care about.

With the traditional linear television channel seeming to be obsolete in the age of the Internet, it’s easy for even an idealist to assume broadcasters are a relic of a bygone age, hogging spectrum that could be put to more productive use. Already the federal government has set up a two-way auction, currently scheduled for 2015, allowing stations to voluntarily give up their spectrum, either going off the air entirely or sharing spectrum with another station, to auction off to the wireless carriers and take a cut of the proceeds – seemingly just a waypoint to the complete liquidation of over-the-air television spectrum. What purpose could it possibly serve that couldn’t be served by the Internet? The answer requires a good technical understanding of how the Internet works – and there is a supreme irony about the whole debate over sports and cable television waiting at the end.

When you call up a video on Netflix, or any other video service, the device you use to access it sends a message asking for the video and sends it to the ISP or wireless provider, which sends it on its way through the network to Netflix. Netflix receives the message and sends the video on its way back through the network to you. If someone else wants to watch the same video, they go through the same process, even if they’re on the same ISP. Streaming a live event works the same way: your device tells the streaming provider it wants to watch the stream, and the streaming provider sends the content of the stream back through the network to you. It does this for each and every person that wants to access the stream, again regardless of whether or not they’re on the same ISP, even though they’re watching the exact same thing at the same time, with each new person joining the stream joining at the exact same point, yet each of them watching, in effect, on their own individual “channels”.

You can imagine what the effect is when a huge number of people want to watch the same thing at the same time, and indeed NBC’s streaming coverage of the 2012 London Olympics was notorious for running into massive issues as as many as a million people tried to access it at the same time. No one has ever heard of a television channel, whether broadcast or cable, regularly freezing while it buffers or fluctuating in picture quality, or even being completely inaccessible, without thinking something was wrong with their signal or connection, yet such is often the norm when it comes to watching things online, at least in the case of a live stream. Broadcast stations send out one signal, and that signal can be received by anyone with an antenna; similarly most cable companies send out their offerings in one burst, and anyone can tune in to the sliver they want while leaving everything else for everyone else. It is infinitely scalable in a way the Internet, at least as described here, can never be.

Video puts a massive strain on the Internet; Netflix alone can make up 30 percent of an ISP’s traffic despite a very small minority of consumers actually using it, and video traffic as a whole make up a majority of all traffic on the Internet. A disproportionate amount of bandwidth is being used by visitors to a few video sites, many of which are now paying ISPs for faster transit through the network, as with the recent Comcast/Netflix deal. The amount of video people consume may well pose the single most serious threat to net neutrality, the backbone of the free and open Internet, and it will only get worse as more and more people discover the selection of video available online and as more and more video currently being consumed on linear television channels moves to the Internet. Deals like Comcast/Netflix may help capacity keep pace, but at the expense of allowing ISPs to be gatekeepers by forcing video providers to pay a tax, exactly the antithesis of what has built the Internet – including Netflix itself – into what it is today.

Considering all this, it should be apparent that anything that can take some of the video load off of the Internet as we know it today should not be dismissed out of hand, and there are some within the industry that have at least started to recognize as such. Of course this argument could apply equally to either broadcast or cable channels, but there are a couple reasons to expect broadcast to be the more important; for one, broadcasting is pretty much the only option for reaching mobile devices that can’t be connected to (or at least can’t be expected to be connected to) a cable connection (and mobile devices are no small matter; already, according to one study, people are now spending more time in front of their phones than in front of the television). Further, as was hinted at earlier when talking about how many teams and leagues would desert ESPN if it no longer reached the vast majority of homes, content providers will always seek to reach the widest possible audience, and that means reducing the amount they’ll have to pay to be part of that audience as much as possible. At the very least, there will always be demand for a YouTube of linear television as opposed to a Netflix.

Considering what advantages the Internet brings to the table to begin with, what sort of content would people be willing to watch at a particular time set by someone else? Certainly people may still want to simply turn on the TV (or whatever would fill that role) and have something on in the background while they do other things or watch a parade of thematically connected programming without having to think too much about actually picking out anything specific, but this question really boils down to, what sort of programming would benefit from the linear television model, in that it inspires a large number of people to tune in to the same thing at the exact same time? Certainly anything, including scripted programming that theoretically can be seen at any time, can inspire people to want to see it as soon as it’s available if they wish to avoid being spoiled about it on social media (or conversely if they want to take part in the conversation surrounding it), but what really inspires this sort of behavior is live programming.

And it is here that we come upon the supreme irony in all of this, because while live events can encompass a number of things such as awards shows or breaking news, the vast majority of this sort of live programming, the exact sort of programming that broadcast television is best suited for, is the same exact sports that it is increasingly being deprived of. Indeed maybe this isn’t so surprising; perhaps, for all the talk about captive audiences and DVRs and money demos, what ultimately underlies the entire rush to pour so much money into sports, all the skyrocketing contracts and subscriber fees, all the multimillion dollar contracts and abandonment of tradition and principles, all the rush to build new sports networks, is the simple, largely unacknowledged fact that sports is one of the last few things holding people to traditional linear television at all, and the fact that so much of it has benefitted cable networks is a simple reflection of the fact that cable has so far enjoyed a decided monetary advantage without much in the way of substantial audience loss.

The Free and Open Internet: 1989-2014?

This is the way net neutrality ends: not with a bang, but with a whimper.

That’s my takeaway from the FCC’s unveiling a little over a week ago of its proposed new net neutrality rules, the replacement for the rules the courts threw out this past January, that effectively undermine the core premise of net neutrality by allowing ISPs to charge content providers for “priority” service to their customers. While ISPs could not outright block service, and FCC Chairman Tom Wheeler says he would not allow any company to use the rule to quash potential competitors or otherwise discriminate, such a rule would still advantage moneyed interests and make it harder for newer, smaller content providers to compete, especially those engaging in bandwidth-intensive services like video, which already have high capital and maintenance costs.

The truth is, though, this is the culmination of a series of moves that have slowly chipped away at the open Internet. AT&T has already flirted with making certain sites effectively cheaper for its customers, and the Comcast/Netflix deal may have been a bellwether for ISPs to impose such tolls with or without new rules. Moreover, over the past decade the Internet itself has undergone numerous changes as people have been increasingly filtering their Internet experience through social media and apps, both of which have the potential to undermine the open Internet and thus degrade support for it. We’ve reached the point where people within the industry are openly trying to argue against net neutrality – sometimes claiming in Orwellian fashion that ending or degrading net neutrality will somehow help preserve Internet freedom – and for “smarter” networks, with the chief of staff for an FCC commissioner arguing for networks that can “discriminate” between “vital healthcare info” and “a YouTube video of John Travolta mangling Idina Menzel’s name at the Oscars.” Of course, it should not be the place of ISPs or government to determine what is “vital” or not, but we may fast be approaching the point where that is precisely what they do.

Earlier this year, we marked the twenty-fifth anniversary of the World Wide Web. Before the Web came along, the Internet consisted primarily of expensive terminals at college campuses, and a series of walled gardens that effectively represented the Internet to the few people able to access it at home. Over the course of the 90s the Web effectively crushed all the walled gardens that had been built up and became synonymous with the Internet in most people’s minds. Now we may be drifting back towards an Internet landscape of walled gardens, under the aegis of ISPs, social media sites, and apps, where independent voices become harder and harder to be heard.

If one image could explain how we got to this point, it would probably be the one that accompanied Chris Anderson’s infamous 2010 Wired piece declaring “The Web is Dead”. It didn’t quite say what he wanted it to, but it did show that by 2010, video made up 51% of all Internet traffic in the United States. Keep in mind, this was over a year before Netflix’s Quikster fiasco, when the company tried and failed to split off its DVD distribution service, let alone Netflix’s major venture into original content with House of Cards and the like; YouTube was probably the biggest engine of all that video traffic in 2010.

As Anderson’s critics pointed out, this wasn’t because people were spending half their time on the Internet watching video, but simply because of the massive amount of bandwidth video consumption chews up. Now imagine video consumption double or triple, or even more, what it was in 2010 – that is to say, imagine all the other uses making up half, a third, or even less what it was then relative to the rest of the Internet. Imagine every ounce of video consumption that currently takes place on traditional broadcast and cable television moving to being carried over the Internet – a future that looks increasingly plausible. It’s easy to see how the Internet could become, from the perspective of the ISPs, first and foremost a video delivery service, even as all the other uses could easily make up half or more of its popularity, with the vast majority of the traffic on its wires coming from a small number of services. At that point, charging those services for the traffic coming down their pipes would make too much sense (even if ISPs were more willing to upgrade their networks on their own than they are now). Net neutrality would seem a quaint notion ill-suited to the realities of the modern Internet. (Better compression technologies will help, but those gains could be wiped out by demands for 4K and other high-end video technologies.)

The Internet may technically be able to absorb the intense demand for video coming its way over the course of the rest of the decade, but it’s looking likely that net neutrality will suffer greatly, if not be an ultimate casualty – unless we have some way to take some of the demand for video off of the Internet, or at least reduce the strain it might cause. The answer to that could come from a surprising source – a blast from the past flirting with its own complete obsolescence. This week I’ll have a series of posts on how sports is increasingly traditional linear television’s main reason for being, and how that’s warping both industries – and what that says about the Internet-centric future video is starting to transition to, as well as the role different technologies could have in saving net neutrality… if it isn’t killed off first.