One exciting announcement from the Consumer Electronics Show (CES) in Las Vegas last week was Dish’s Network’s announcement that it will stream ESPN and other channels over the Internet. This announcement is especially timely because it comes just ahead of an FCC ruling on net neutrality set for next month. Whether streaming video will reduce ISP bills and free consumers from the grip of cable companies depends on what transpires at the FCC meeting.
Cutting the Cable Cord
For years, cable subscribers have wanted to ditch their subscriptions and simply choose what TV channels to pay for. Consumers feared, however, that there would be no change in the current state of the industry, because of the cable companies’ cozy relationships with both the content providers and politicians. The channel bundle seemed destined to remain the only option, mainly because of the billions of dollars broadcasters receive in fees from the cable companies.
A major cash cow for cable companies is broadcast sports. Some viewers may want to only watch college football, and ESPN happens to own many of the rights for broadcasting those games. There are few to no legal alternatives online. With Dish Network’s new service, however, for $20 per month you can say “goodbye” to your cable subscription and watch ESPN on your cell phone, tablet, Roku, or other supported devices. DirecTV will stream CNN too, who might want to change their name. After all, they are called the “Cable News Network.”
The FCC and Net Neutrality
The FCC is set to rule on the principle of net neutrality in February. Their ruling could prohibit Internet service providers from charging one customer a different price than another in exchange for “fast lanes” on the internet. Proponents of net neutrality fear that in such a market, large companies will continue to dominate the Internet. They say this will hamper innovation at startups and smaller companies, and that we will remain without alternatives under the clutches of Time Warner and Comcast.
Politicians have been helping cable companies in the past retain their grip, but this time their options are limited, as the FCC is an independent agency. For example, when the city of Chattanooga, Tennessee, fed up with slow Internet service from the cable companies, built their own citywide fiber optic system, cities elsewhere passed local ordinances prohibiting similar measures. The result of this lack of genuine competition is that America’s Internet speed is not even in the top 20 in the world.
One way this plays out is in peer-to-peer settlement fees. Every ISP needs another ISP to forward its traffic. Usually these companies do not charge each other for that service because such charges would cancel each other out. However, AT&T has threatened to remove this relationship for smaller ISPs. Comcast also stated they would slow Netflix traffic, unless Netflix paid to upgrade Comcast’s equipment. Netflix caved into their threats and now pays a surcharge to Comcast. This scenario violates the principles of net neutrality.
Before becoming too hopeful regarding whether the FCC will prohibit surcharges on internet bills, remember that the chairman of the FCC is a political appointee who used to be, you guessed it, a lobbyist for the cable companies.
The Freedom to Stream
Much hangs in the balance with the impending FCC ruling regarding the future of internet usage. If the cable companies succeed, then the cable monopolies could retain their control over the market. We may even begin to see Dish Network or Time Warner charging extra fees to carry traffic over their networks for high-bandwidth streaming services other than their own.
If the FCC were to declare the internet a public utility, like they did with phone company telephones lines some years ago, then the scales would tip in favor of consumers. Regardless of who owns the infrastructure, consumer options would then begin to open up with more ISP choices in their local area. Although it may be a long battle, consumers still have hope that more choices for smaller TV channel bundles and new ISP’s will begin to crop up.
Another year has passed and so has another CES. At Seamgen we keep up with the latest trends in technology and follow technical news. So come back here again and we will tell you what is new in computing and the larger issue of Internet and media access.