FCC Proposal “Compromise” Not Good For Entrepreneurs
Read this story on NPR.org first… Now back to me. Now back to them. Now back to me.
A little about me
I worked in the engineering department of a major MSO (AKA “the cable company”) for 6 years. I’ve spoken at CableLabs (the big MSO conference). I’ve met engineers and executives from a lot of other MSOs as well. In short, I know more about this issue than I would if I were just an MSO customer but I’m not currently working for one and never had the authority to set policy.
The issue at hand
The long and short of the issue is that MSOs are being relegated into 1 line of business. They are being pushed into providing data pipes and ONLY data pipes. Why? Because, frankly, they SUCK at everything else. They’re too big to be good at everything.
My former employer was the largest CLEC in the state of CA and our phone service still stunk. It was empirically proven that our service was worse than the established telco provider but our customer service was 1000% better than theirs so people loved us.
That’s not a technology advantage. After all, it’s not hard to provide better customer service than the phone company. Am I right?
We had gigantic problems running our network that nobody will talk about publicly. We were horribly immature when it came to change management. The technology we were using was constantly evolving and our engineering teams struggled to keep up and fought constantly with the teams in local systems about change management, technology choices, vendor selection, standards adoption… you name it.
When I left, our video services were starting to catch up with the future laid bare by “over the top” providers like Hulu long before but doing it in the most awkward way possible and not because we wanted to.
All the talk at CableLabs was about “providing value” to the customers as a defense against these over the top services. Proposals were everywhere to build phone and video services that nobody wanted. HD phone calls? Oh, that only works if both people have HD phone service? Pause live TV and start watching it on your iPhone? Yeah, let’s pay $3 million to implement that service…
The only recognition of the fact that this strategy seemed doomed came from the engineers in the audience. The executives on the panels either didn’t understand or wouldn’t admit the obvious truth.
Over The Top
I don’t think there is anything MSOs can do about over the top services for video and telephony. It’s an arrogant assumption on their part to think that they could each possibly be smarter or more inventive than the diaspora of services proliferating on the internet. Video and telephony services of ever increasing variety are sprouting up everywhere. Some are minor tweaks to what you’re used to using and seeing. Some are truly revolutionary ideas that no MSO would ever DARE consider.
Here is the key thing about MSOs
They are huge companies with political factions that have been developed over long periods of time. Some people, especially in the video departments, have been in their jobs for DECADES. Any new product that would threaten these entrenched, beloved and sacred lines of business is immediately set on fire, shot in the head and drowned in a bathtub. Sometimes the person with the temerity to propose it goes along for the ride.
Why do you think it took so long for the phone companies to develop DSL? Because they wanted you to buy… wait for it…. and ISDN line. I kid you not. Business DSL? Why deploy that? People will stop paying $500 a month for a T-1 line if they can get 20x the speed for 1/10th the cost!!!
Net Neutrality
To the NCTA (MSO trade group) Net Neutrality means being able to pinch off the data flow to companies who challenge their other lines of business by providing better services to their customers. This includes almost any service you can think of like Skype, Netflix, Google search, Hulu…
If they can’t compete with Netflix, they’ll take away your ability to choose to use it.
I know that the MSOs spent billions on their networks to make them faster, more reliable and more available. I was there. It was quite a thing to see. That doesn’t mean they should be able to use their data networks to stiff arm the competition.
What it means to you
If you’re starting a business that is going to challenge an MSO’s phone or video line of business, be prepared to have a hard time reaching their customers over their data pipes.
The FCC Compromise
The compromise that the FCC came up with is to not classify internet service as a “common carrier” service which would have forced them to treat all traffic equally.
What they will do instead is manage their networks however they want “as long as they publicly disclose their network management practices.” They can’t block services outright but they can disrupt the service and make it unusable.
Who do you think the consumer is going to blame for your new application or service not working very well? The MSO? Not hardly. Do you think they’ll bother to troll through the MSO website to see if your app or a competitive app provided by the MSO is listed explicitly in their public disclosure of network management policies?
If you believe that I have a summer home in Greenland you might be interested in.
Feedback
If you have an opinion on this subject you’d like to share or if you have any questions please comment below.
