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By Tom Cushing

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About this blog: The Raucous Caucus shares the southpaw perspectives of this Boomer on the state of the nation, the world, and, sometimes, other stuff. I enjoy crafting it to keep current, and occasionally to rant on some issue I care about deeply...  (More)

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House of Cables

Uploaded: Feb 19, 2014
The new House of Cards series on Netflix has been a riveting experience on multiple levels. Don't worry, no spoilers here – just to say that part of its fascination has been the Sopranos-like absence of any heroes, or practically anyone with any redeeming qualities at all. It's a dank, fantastical shadow world of naked, no-rules power that's just plausible enough that we fear it might be real. Unseen machinations control our daily routines in ways we could scarcely imagine if we wanted to, and we don't. Civics class was never like this, or we might've paid better attention.

The series also delivered to my house a demonstration of the mess that is our cable and broadband access system. It is way too slow, too complicated, too unreliable, and way (way) too expensive – for reasons not unrelated to House of Cards-style shenanigans.

For example, I have taken a latter-day homesteader's pride in my ability overcome the many obstacles that seek to starve my eyes of Netflix. I have a broadband wireless router at one end of the house, a separate extender to reach the TV at t'other end, a blu-ray player/receiver, a port to receive its signal among a dozen TV source settings, and an array of remotes designed for a Mensan's smarter sibling. These were each installed and activated in protracted episodes of extreme frustration, abetted by the best tech-service minds of the Asian subcontinent – and each is protected by codes longer than well, they're long.

Calling myself an internet frontiersman, I have scurried about to set-up this rube-goldbergian sequence to bring-in House of Cards (HoC), hopeful of winning the admiration of My Beloved. Except that then I get confronted with an interminable loading delay, punctuated by warnings that my system sucks and will probably barely trickle, much less stream the desired content. The popcorn starts getting stale. My Beloved wonders aloud who won ice dancing. And I finally ask myself: why do I put up with this crap from my TV?

Why indeed.

In the rest of the First World, HoC would come rocketing into my living room, and bedroom, and laptop, phone and iPad, in several languages and at the touch of a button. The USA's internet access is half as fast as Korea's, and it is fully four times as expensive as faster service in France (France?!? Yes, France! THAT France – the one that takes-off All of August for les vacances, to drink fine wine and watch le TV).

Okay, so how'd that happen? First, we need to understand that cable and broadband access in this country are tightly linked, and that cable is dead. The future of bundled TV services is, shall we say: exfinite, meaning that it's going the way of rabbit-ears and land-line telephones. If you are my age, your offspring are already getting their TV directly from the web, most likely via their wireless phones. And you and I are dinosaurs; plant-eating reptiles – meals-in-waiting for our cable providers.

As an extended aside, that's why the cable aspects of the proposed merger between rapacious raptors Comcast and Time Warner Cable really doesn't matter much, price-wise. Those two leviathans do not hunt geographically for the same customer prey, so they will not be eliminating competition that never was. Now, they will wield more discount-demanding power "vertically" against their suppliers of content, like NetFlix, and did I mention that they already own NBC and Universal? But they can be counted-on not to pass-along those savings to us fern eaters, so we're not likely to notice the change during our sorry lifetimes.

There's even a pretty good argument to be made, for the medium-range reality, that having a dominant cable player is a good thing, in case the future is wireless. If there is a trend toward getting our signals to our TVs and computers the way we get them to our phones, then having a strong hard-wire alternative will exercise some price discipline on those more evolved telecomm predators.

And probably the best argument to allow the Comcast combination is that there is so much creative destruction in tech markets that we just can't see the future. That implies that we really ought to temper any consumerist regulatory zeal with a large dose of humility. Ten years ago, after all, Microsoft was all set to rule the world, and before that AOL was the unstoppable "It" company of the proto-web 1.0.

So, after that digression, what IS the Real problem? It is this: the Real future is fiber optics cable, not copper (phone) or coaxial (cable). So-called FiOS is what they've already installed in Korea, and France, that allows the next quantum leaps in data speed and volume. FiOS is contemporary commercial and entertainment infrastructure at least as crucial as highways and bridges, and necessary to work in conjunction with schools. Unfortunately, the entrenched cable and broadband interests are fighting it like Francis Underwood attacking a plate of ribs.

Who, one might ask, chairs the FCC, the agency with primary regulatory authority over these matters? Why, Tom Wheeler, recent former head of the cable industry's primary lobbying association. Who bundled $1.2 million for the Democratic candidates, including a fund-raising dinner in Philadelphia? Ten points if you answered David Cohen, Comcast's chief lobbyist. And who had the Prez over to his humble compound on The Vineyard (Martha's) for a cook-out? That would be Brian Roberts, CEO of wait for it Comcast. Uh-oh.

Further, much of the FiOS distribution system energy percolates at the state and local levels, in places long under the thrall of cable operators who enjoy having the field essentially to themselves (and because they are so competitively lonesome, they have correspondingly little incentive to innovate). Some municipalities have sought to finance and build their own FiOS networks to serve their citizens, much like roads, water and sewer services.

So guess who pushed through legislation in Colorado (and similarly in twelve other states) to prohibit or hamstring that process? The Colorado Cable Telecommunications Association is who. And by now it won't surprise you that they also opposed Longmont, CO's several referenda to sell bonds and finance a local FiOS system, to the tune of $225,000. In that case, they hinted darkly that 'foreign interests' were behind the plan, in a tactic worthy of HoC arch-villain Raymond Tusk (which is saying something). Nor will you be amazed to learn that cable money: helped defeat a similar plan in Minnesota, and the incumbent Mayor of Seattle who backed FiOS, and underwrote an unsuccessful lawsuit against such a network in Tennessee. The Fix is in, in every way except the one that improves my access to the web. Worse, it is financed in part by my own cable bill, and yours.

In a larger sense, American internet infrastructure – both its cost and its speed – will continue to lag the rest of the organized world until we come to grips with how to fix it. That process starts with defining the kind of thing that it is: is it a "public good" like an Interstate highway or the radio spectrum, a "natural monopoly" like a public utility, or just another private commodity? We have treated it, by default, as just a commodity, with the resulting pokey speeds at ruinous expense.

A natural monopoly characterization would allow regulation that is theoretically in the public interest, but is anyone who's familiar with history or our local public utilities really pleased with those outcomes? Does the term "regulatory capture" ring a bell (as it does in San Bruno, Hinkley and elsewhere)?

This situation does require that government define the internet infrastructure as a matter shot through-and-through with the public interest – it is as aligned with the nation's future interests as its highways, ports, or the electric grid. We can then choose from among a variety of public and/or private options to promote the public's ends (perhaps another blog topic). This massive upgrade needs to be an urgent public priority, as well. The form and pace of that upgrade must also be determined in public, and in the public interest. It should not be determined in the tangled wiring of current cable politics, or in backrooms, or boardrooms, or on Martha's Vineyard.

Comments

Posted by Cholo, a resident of Livermore,
on Feb 20, 2014 at 12:10 pm

You've posted an excellent plan re: how to make people CRAZY!

When do you relax? Take a nap? Eat popcorn? Go fishing? duh...

So why not legalize mary-anna so that at least a few folks can kick back and relax...talk about Sochi circles in ponds the clouds...hmmmmmmmmmmmmm?

After all we only get one time around on this planet...what's the hurry?


Posted by Steve Case, a resident of another community,
on Feb 20, 2014 at 12:19 pm

Play it, cholo -- once more, for old times' sake: Web Link


Posted by POLOLO MOLOLO, a resident of Livermore,
on Feb 20, 2014 at 1:36 pm

definitely not the voice of mary-anna the coloratura...HOORAY!


Posted by Hilda, a resident of Another Pleasanton neighborhood,
on Feb 20, 2014 at 2:39 pm

Dear Pleasanton Weekly Editors,

May I claim a prize for being the only reader to have finished the above slog ... I mean blog? A television watcher. Who woulda thunk it?

Sincerely,
Hilda

P.S. I lied. I never made it to the end. Was there an end? Forget it, I don't need to know.




Posted by Tom Cushing, a resident of Alamo,
on Feb 20, 2014 at 4:05 pm

Bad news, Hilda -- the RC's been renewed for another season. Another thirteen exciting episodes. At least! Crank up the coffee pot, dear reader, or turn the page.


Posted by Northern Lights, a resident of another community,
on Feb 20, 2014 at 6:42 pm

Tom - I read every word of this column, and I sympathize with your plight. Leaving aside the (substantial/serious) question of whether you should trade in your House of Cards for Nova or American Experience, your television viewing issues are caused directly by the public sector that you would invoke as your savior. Ronald Reagan's famous line from his first inaugural address rings particularly true here - government is not the solution to your problem, it is the problem.

FiOS (stands for Fi-ber Optic Service) is a brand name of a product offered by Verizon in the areas in which it is a incumbent local exchange provider. AT&T, the incumbent local exchange service provider in this territory, offers a similar Fiber-based service called Uverse. I have that service in my home; I have no problem streaming any Netflix movie and I have fast and reliable wifi throughout my entire house. The competitive pressure from Uverse and FiOS has lead to huge subscriber losses for Comcast and Time Warner, leading many analysts to predict the demise of the cable industry (see Web Link) and creating the alleged business imperative underlying the proposed Comcast-Time Warner merger.

So if a service exists that would solve your problem - and it exists here in California, not in Korea or France - why can't you get it? Here's where your beloved public sector comes in. Many cities, fat and happy from the largess paid by the cable monopolies' franchise agreements, fought tooth and nail to keep AT&T from deploying Uverse. AT&T even had to sue the City of Walnut Creek in both federal and state court to get permits to build the infrastructure for Uverse. The legislature had to create a new statewide franchising scheme, taking power away from local governments, before most communities would allow AT&T to build. Contra Costa County was among the very worst - it took AT&T more than 2 years of negotiating with County staff before it agreed to issue permits to AT&T, and the few permits it manages to get through the bloated regulatory process even today are subject to unprecedented and costly conditions. More than 7 years after it first announced Uverse service, AT&T is still trying to get permits to build the infrastructure in this area.

Not all local communities were so short-sighted and dismissive of the needs of their residents. San Ramon and Danville struck early deals with AT&T to get Uverse rolled out in their communities and it is widely available there.

Instead of advocating more government regulation by such ill-advised tactics as declaring internet service a "public good," you might try giving competition a chance. Try moving to a community that has a more enlightened local government, one where you can purchase Uverse. You - and Kevin Spacey - will be glad you did.


Posted by john, a resident of Another Pleasanton neighborhood,
on Feb 20, 2014 at 10:24 pm

"Try moving to a community that has a more enlightened local government, one where you can purchase Uverse. "

Did you really just post this? Move to a different city for faster internet access? It is very hard to tell who is joking sometimes on these forums.

Do you work for AT&T? Plenty of people get terrible Netflix bandwidth from them in San Ramon and Danville.


Posted by Tom Cushing, a resident of Alamo,
on Feb 21, 2014 at 7:53 am

NL and John: thanks for your comments.

I understand the temptation to roll out St Ronnie's "government can't help" bugaboo and cite individual tribulations as evidence. It's a good, noddable, low-info tactic. I'm sure those locals can make life difficult and ensure full-employment of lobbyists within the immensely profitable cable/telecomm sector.

But government sets certain boundary terms for competition in EVery market, and here, misguided, incestuous and Small Picture policies at all levels of government have created conditions of local monopoly all over the country. And, as with any monopoly market, quality is too low (slow), cost is high, innovation suffers and profits are unjustifiably elevated – not because of merit, but because the field of competition is empty.

Don't take my word. Here's Susan Crawford, a leading critic of current policy:

"Instead of ensuring that everyone in America can compete in a global economy, instead of narrowing the divide between rich and poor, instead of supporting competitive free markets for American inventions that use information--instead, that is, of ensuring that America will lead the world in the information age--U.S. politicians have chosen to keep Comcast and its fellow giants happy."

As they say in the law: 'res ipsa loquitur:' the thing speaks for itself. In Seoul, for about $30/month(!), I could get a choice of broadband from any of three private sector companies, at speeds twice the USA average. Here, or in NYC, similar speed costs $200 -- if you can get it. Such is the power of "real" competition for the last fifty-feet of distance to the consumer – terms set by the Korean government, which requires bid-based access to a common carrier pipe. Those results really do 'speak for themselves.'

At the federal level, top FCC appointees and lobbyists play musical chairs to a perpetual melody, and campaign contributions flow like water into the Congressional so-called 'warm pond.' At the state and local levels, cable and telecomm lobbyists work diligently and well to bolster the local monopolies of their clients. In what other mammoth national market could the Numeros Uno and Dos competitors propose to merge, and claim a trivial antitrust impact because they don't compete with each other?? Again, 'res ipsa.'

So, we have a problem of market structure, with poor boundary conditions that serve immediate commercial interests, but neither consumer interest$ nor longer term social interests. Government must hit Reset. There are hundreds of ways it could be done, for example: the Korean model that fosters actual local competition in a three-way, all the way up through nationalization (which I do not favor). But we've got to appreciate the massive scope of the current structural market failure, define the problem, and choose a solution in the national and consumer interest – and that's a government role.

You can look to rural electrification, or the interstate highway system for examples of past, similar public imperatives where "government was Not the problem." I'm certain that toll road operators were unhappy when the Interstate came through, and some were no doubt compensated for their lost property. But a Big Picture solution was needed, and implemented to EVeryone else's benefit. Nothing that extreme is needed here, but fundamental policy change IS needed.

One thing is for certain – if the USA keeps whistling past this 21st-century graveyard as a matter of policy, our economy will surely come to inhabit it.

(and don't EVEN get me started on abject absence of wireless phone access in little ol' Alamo ... I had to resort to a Land-Line, fer cryin' out loud! I feel like Grampa McCoy. Web Link)


Posted by Northern Lights, a resident of another community,
on Feb 21, 2014 at 11:02 am

John, yes I did mean what I said. The solution to the internet problem isn't more government, it is more competition. And despite the ridiculous waste of resources, providers are still trying to build fiber closer to homes, and not just AT&T and Uverse. Yesterday Google announced it will be bringing its Google Fiber service to San Jose (Web Link). Is there any coincidence that San Jose City Halls happens to be a reasonable place to get permits?

Tom, I certainly am not a free market extremist. Government is a major component in the American "free market" - always has been and always will be, and not just (as the tea partiers might suggest) by setting the rules of the game (such as defining property rights) or spending money (which we all know it does easily, and those expenditures skew every market). That is not necessarily a bad thing, although we all can and should quibble where and under what circumstances government should actively intervene (e.g., unemployment, health care, tax incentives, etc); and we have to be concerned over the size of government expenditures, whether the dole is being managed properly, and how much we are placing our kids in hock for our representative's favorite pet project. I also don't trot out Mr. Reagan's famous quote often precisely because, as you imply, it is so overused.

But I maintain it does apply here - in spades. Leaving aside your tendency to overuse the term "monopoly" and throw around conspiracy theories like Oliver Stone, the simple fact is that residents of Contra Costa County would have had more of a competitive choice for internet access for YEARS if the County would have worked in your best interest. And if that money had been invested years ago to build a better internet experience for the County, we might even be moving toward something that is more cost-effective. Rather than responding to me, I suggest you write your County Supervisor.


Posted by Tom Cushing, a resident of Alamo,
on Feb 21, 2014 at 1:25 pm

Thanks, NL – I might just do both. Watch out Hon. Madame Andersen! (San Ramon Valley Office: 309 Diablo Road, Danville, CA 94526)

Now, it is interesting that the terms 'monopoly' and 'conspiracy' come up in the same sentence. You're right, of course, that most cable/broadband markets are not 'pure' classical monopolies in the Econ 101 sense. They are, however, crudely concentrated to the point that active, backroom deals among participants are not required to maintain the Bad Effects of monopoly – of which there is ample comparative evidence.

Like gas stations on opposite corners, they can easily maintain supra-competitive prices. They also have little incentive to push the speed envelope. I believe Oliver Stone and everybody else might call that "consciously parallel behavior" among oligopolists. Further, they are allowed to act together as well-financed and coordinated – and successful -- industry lobbies. The fact that it may all be strictly legal should not be equated with the idea of the public interest, or consumer interests, however.

Now are cracks appearing, despite legal obstacles conjured by the House of Cables? Yes – Longmont won on its third try, and Google may be serving San Jose before the A's get there. That does not gainsay the systemic, structural, national-sized market problem. Neglected market failures may not endure forever, but every day they exist inflicts damage on the future interests of the offspring we always trot-out as ultimate innocent victims of our misdeeds.

I'm saying that we can hasten that day by proactive leadership to clear away obstacles and facilitate innovation -- lest the USA fall further behind the resty of the world to the benefit of the ISPs. That may – hell, it must – wean the incumbents off their, ahem, monopoly premiums (e.g. the $200 - $30 = $170 monthly premium in the SF vs. Seoul case), and make them compete to the benefit of my immediate wallet and our grandkids' job prospects.

Finally – I forgot to ask: jeans okay tonight, because right now my wardrobe is whatever still fits. RSVP. And note to trolls: I really do appreciate the tone of Northern's argument in this exchange. It's aggressive on the merits without the personal jibes-and-nasties: a regular aurora borealis in a normally dark sky. THAT's how it's done.


Posted by Tom Cushing, a resident of Alamo,
on Feb 22, 2014 at 9:25 am

In case anyone's interested in further reading, here's a good column in today's NYT: Web Link

"I guess it's time to root for Google."


Posted by Candace Andersen, Contra Costa County Supervisor, a resident of Danville,
on Feb 22, 2014 at 2:11 pm

At Tom's invitation, I'm happy to jump into this conversation. As a Danville Council Member I strongly supported U-Verse coming into Danville. It provided another option for our residents with faster broadband speed and more television viewing options. The competition among providers was good. We just had to work through some of the aesthetics of larger boxes going into neighborhoods. Fortunately, AT&T was helpful and cooperative as we went through the process.

Interestingly, now as a County Supervisor and a Vice-President of the East Bay Economic Development Alliance (eastbayeda.org) I have been strongly encouraging our communities to move high speed broadband further along. East Bay EDA is part of the East Bay Broadband Consortium. Go to their website (ebbroadband.org) and see some of the initiatives we're bringing forward. There's even a Let\'s Get Fast Pledge we encourage cities to adopt.

Although I share Tom's frustration when my Netflix viewing sputters along, interrupting my viewing, I also see high speed internet access as being essential for our Economic Development in this region. If we're going to attract businesses to the East Bay we have to have the infrastructure already in place for businesses to come here. Commercial Realtors will tell you that the speed of the fiber going into a building makes all the difference in where someone chooses to locate.

San Leandro provides a great example of how a public/private partnership can make a significant difference. It's a remarkable story of how an entrepreneur named Dr. J. Patrick Kennedy wanted to keep his business OSIsoft LLC in San Leandro. Partnering with the City, he installed the fiber he needed, while benefitting the City and helping them attract additional businesses. At litsandreando.com you can read more details.

Locally, Bishop Ranch is a great example of a property owner recognizing what businesses need to relocate here. Sunset Development has done a great job of ensuring that the broadband needed by their tenants is in place. They advertise to prospective tenants that "A dedicated SONET ring (Synchronous Optical Network) provided by AT&T encircles Bishop Ranch ensuring not only blazing speed, but also unparalleled reliability and disaster recovery."
They have been able to attract businesses because of the infrastructure they provide.

A few weeks ago I moderated a panel in Oakland on this topic which featured representatives of AT&T, Comcast, a commercial realtor, small business owner, and Dr. Kennedy. The panel was devoted to how each was improving broadband/digital in the East bay. There is a lot of innovation moving forward.

As an elected official I see many opportunities for local government to help. We need to work to develop the private/public partnerships to make it happen. We can streamline the permitting process, keep our fees in a reasonable range, and certainly encourage competition.

I'm happy to hear your thoughts on the topic. I can always be reached by email at candace.andersen@bos.cccounty.us.


Posted by john, a resident of Another Pleasanton neighborhood,
on Feb 23, 2014 at 4:49 pm

Interesting turn of events.

Web Link


Posted by Tom Cushing, a resident of Alamo,
on Feb 24, 2014 at 12:40 pm

I agree, John -- especially since we\'ve now discovered at my house that our blu-ray player, which does double duty as a streaming box, will no longer play "some more recent" discs in the player part, without a software upgrade.

Further, the manufacturer (Vizio), whose "live chat" was actually "email" (how quaint), and who addresses me as a Valued Customer, strives for excellence and wishes me a great day, Does Not Have that Fix for my model VBR 334. How can ANY blu-ray player already be obsolete while they\'re still charging more for blu-ray discs than the standard DVDs that they are still pumping-out on Netflix and RedBox? Cripes.

So, the sooner I can get All my Netflix content via preferential pipe, the better. I\'m confident that P err, Vice President Underwood agrees with me.

So, does anybody know how this will actually work, from the receiving end?


Posted by Doug Miller, a resident of Country Fair,
on Feb 25, 2014 at 5:05 pm

Doug Miller is a registered user.

As NL said, "The solution to the internet problem isn't more government, it is more competition."

And County Supervisor Candace Andersen agrees. I particularly like her humility and limited perspective: "I see many opportunities for local government to HELP."

When citing specific things local government can do, she says, "We can streamline the permitting process, keep our fees in a reasonable range, and certainly encourage competition.

How refreshing!


Posted by Ben, a resident of Birdland,
on Feb 26, 2014 at 1:34 pm

Do you honestly think Comcast buying up Time-Warner will not effect pricing?
Since when has Comcast ever been a customer first company? When was the last time cable/phone/i-net bill went down because of a Comcast decision? Competition breeds innovation and technology. What incentive would Comcast have to innovate after it buys out its only true competition? Guaranteed your Comcast bills will skyrocket if the FCC allows this "merger". But then again, the FCC is really not on the consumers side as it stands now anyway.


Posted by Tom Cushing, a resident of Alamo,
on Feb 26, 2014 at 2:55 pm

Hi Ben: the trust busters can only worry about injury to the competitive process, and the fact is that Comcast and TWC simply do not compete with each other in very many markets -- all of them local, geographically. Therefore, together they are not much worse for consumers than they are separately. That's why that merger doesn't matter much -- which is not the same thing as saying that competition is healthy. It's not, and the cable lobbies, where they can all get together and pursue their common interests before the government, have been very successful at protecting their clients from competition.

It's a tangled web of cables.


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