Friday, January 30, 2015

Hello Left Hand, I'd Like You To Meet Right Hand

One of the best articles I read yesterday was "FCC Chairman Mocks Industry Claims That Customers Don't Need Faster Internet" by Jon Brodkin over on the ARS Technica site.  What elated me the most was how Chairman Wheeler used the industry's own words against them to refute their assertion that the then current state definition of broadband (4Mbps down/1Mbps up) was sufficient.  He noted how the industry's lobbying arm argued against redefining the minimum upload and download speeds a service must offer in order to qualify as broadband.  He then pointed out how each of the major ISPs fighting the updated minimum levels were ALL actively marketing speeds in excess of the new limits to their customers.  The telecommunications companies are upset because existing DSL services meet the old 4Mbps down/1Mbps up; however, they no longer qualify for the "broadband" moniker based upon the updated definition.


AT&T offers high speed internet service via Digital Subscriber Line (DSL) and U-verse.  AT&T's DSL comes in three flavors: 768kbps, 3Mbps and 6Mbps.  Their advertising page for DSL illustrates that a 4GB video file take more than 12 hours to download on the low tier, 3.1 hours to download on the middle tier and 1.3 hours to download on the "Xtreme 6.0" tier.    Their highest level of service is the ONLY level of service capable of serving up even a single HD video stream in real time.  The "AT&T U-verse High Speed Internet" product page lists service that begin with a 3Mbps service tier and continue with 6, 18 and 45 Mbps tiers. 

As of yesterday, AT&T can no longer claim their DSL service is "broadband" as it is no longer capable of meeting the new definition for minimum level of service.


The "High Speed Internet from XFinity by Comcast" product page lists 6Mbps, 25Mbps, 50Mbps and 105Mbps service tiers.  Their description of the "Performance" tier service which offers download speeds of 25Mbps is good for streaming online video and sharing photos.  It is not until we get to the 50MBps "Blast!" tier where they start talking about streaming and downloading HD video content, gaming online and supporting households with three to five devices making use of the internet connection.

Time Warner Cable

Time Warner Cable has a nice little "WiFi*Denti*Fier" page which lets you "Dive in and Learn How You Can Enjoy the Internet Even Better".  They recommend a 15Mbps connection for a single person watching television, streaming video and using a computer online.  Add your significant other and one additional computer into the mix, and you're now better served by their 30Mbps tier.  Bumping their model up to a family of four, where each person has a computer, and you have two video streams and the "Ultimate" 100Mbps package is what you need.


On Verizon's "Check Out the FiOS Experience" site, they describe the 25Mbps download tier as being good for normal, every day use if you live alone or perhaps share your connection with up to two people.  They describe usage such as web surfing, reading and responding to e-mail, online shopping and using social media.   They also indicate you can stream two high definition videos simultaneously.  The FiOS 50Mbps download tier is described as being the best for your family's day to day use allowing you to share photos and files quickly, enjoy online gaming and stream up to five high definition videos at the same time.  Verizon also features 75, 150, 300, and 500 Mbps plans.

Party Line Vote

What I also find telling is how the votes on re-definition of broadband followed party lines: Chairman Wheeler, Commissioners Clyburn and Rosenworcel voted in favor while Commissioners Pai and O'Reilly dissented.  Pai and O'Reilly are the two Republicans on the commission and they sided with the industry against updating the minimum requirements to qualify as "broadband" service.  The two Democratic commissioners sided with the Mr. Wheeler in support of the new definition.

O'Reilly argues that the FCC's report indicating a 25Mbps download service level is required for streaming 4K television supports a TV format that is "...not expected to be widely adopted for years to come."  As a counterpoint to Mr. O'reilly's assertion, I would like to cite a statement made back in March of last year by Barbara Kraus who is a Director of Research at Parks Associates.  In a their study entitled "4K Today: Bringing Ultra HD to Market", Ms. Kraus is credited with the following assertion:
The price curve for 4K TVs will be similar to that of HDTVs but at a slightly faster rate of decline. While 4K is priced at the high end now, it will decline to mass-market levels over the next two to three years. Like flat-panel HDTVs, 4K TV prices will continue to decline as unit sales volume increases.
A few months later in September, Marco Chiappetta describes how Vizio's launch of a its P-Series of 4K Ultra HD televisions with an entry level price point of $999 for a 50" television illustrates 4K televisions are closer to mainstream adoption.

Contrast this with Commissioner Rosenworcel asserts "[w]e invented the internet. We can do audacious things if we set big goals, and I think our new threshold, frankly, should be 100Mbps. I think anything short of that shortchanges our children, our future, and our new digital economy..." 


The cable and telephony duopoly are fighting against the FCC's recent moves to provide more oversight for the broadband internet market.  Their excuse is that it is incredibly expensive to maintain and upgrade their existing networks and FCC regulations would place an undue burden upon their shoulders.

To me, it isn't a question of the availability of funds but rather where these companies want to spend their money.   Comcast, for example, purchased AT&T's cable television business back in 2001 for $47 billion dollars.  They spent $4.8 billion to acquire MGM in 2004. In 2009, Comcast spent $30 billion dollars for a 51% stake in NBCUniversal.  Four years later, they spent an additional $16.7 billion to acquire the remaining 49%.

AT&T clearly has some extra funds available considering they agreed to Federal conditions on approval of their $48.5 billion dollar acquisition of DirecTV back in August.  A few months later, on the 7th of November, AT&T announced that they are going to acquire a Mexican wireless provider for $2.5 billion dollars.

Back in 2005, a book entitled "$200 Billion Broadband Scandal" was published.  The book outlines how during President Bill Clinton's tenure, there was an aggressive "National Infrastructure Initiative" to rewire ALL of America with fiber optic cable.  The Bell companies at the time agreed to step up to the plate and complete the work.  It is estimated that the Bell companies netted $206 billion dollars in excess profits and tax credits and in exchange, American Citizens got DSL.

The incumbent ISPs have demonstrated that they will only invest to improve their networks unless they are forced to.  Given the limited choices consumers have, they have little if any compelling reason to do so.  I applaud the FCC for taking steps to protect consumers and move to improve the current state of affairs in the broadband world!


Abrams, Rachael. "Comcast Hast History of Big Deals." New York Times. 13 Feb 2014. Web. 30 Jan 2015. <>

AT&T. "AT&T to Acquire Mexico Wireless Provider Lusacel." 07 Nov 2014. Web. 30 Jan 2015. <>

AT&T. "AT&T DSL Internet and Home Broadband Service." Web. 30 Jan 2015. <>

AT&T. "AT&T U-verse High Speed Internet." Web. 30 Jan 2015. <>

Broken, Jon. "FCC Chairman Mocks Industry Claims That Customers Don't Need Faster Internet". ARS Technica. 29 Jan 2015. Web. 30 Jan 2015. <>.

Chiappetta, Marco. "4K Ultra HD Inches Closer to Mainstream Adoption". Forbes. 29 Sep 2014. Web. 30 Jan 2015. <>.

Federal Communications Commission. "FCC Finds U.S. Broadband Deployment Not Keeping Pace." 29 Jan 2015. Web. 30 Jan 2015. <>.

Kosman, Josh. "AT&T Agrees to Conditions With Feds in $48.5B DirecTV Purchase." New York Post. 25 Aug 2014. Web. 30 Jan 2015. <>

Kushnick, Bruce. "The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net".  New Networks. 01 Oct 2014. Web. 30 Jan 2015. <>.

Tretbar, Alex. "Study Projects 4K Will Expand Like HD, Only Faster". Digital Trends. 28 Mar 2014. Web. 30 Jan 2015. <>.

Parks Associates. "4K Today: Bringing Ultra HD to Market". 20 Mar 2014. Web. 30 Jan 2015. <>

Verizon. "Check Out the FiOS Experience". Web. 30 Jan 2015. <>

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