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Value in Television

Brief look at rental racket in cable, and the future with autonomous vehicles.

Happened to see a repost about an old (2011) report by the Natural Resources Defense Council (NRDC) finding high electrical costs associated with cable boxes. The environmental cost of rented equipment often gets overlooked, along with the economic losses it perpetrates. Mostly, renting helps the environment. But chronic/long-term renting, where the energy costs or other negative environmental factors are obscured, should not be confused with short-term, purposeful renting.

But, of course, we went down the equipment rental road with Ma Bell for decades before the government finally stepped in and ruled their scheme illegal. Today most people own their own telephones; the few that still have landlines, anyway.

Still, adoption of subscriber-owned equipment appears negligible in television. Digging around turned up a speech/statement from then-commissioner Susan Ness, 11 June 1998 (that’s 15 years ago) (see FCC: Text document: stsn816.txt). It discusses the FCC implementation of Section 629 of the Communications Act. That section charges the FCC with adopting regulations allowing consumers to replace their rented set-top boxes with commercially-available devices. That section was enacted in 1996.

To date, the adoption rate is dismal. It remains a work in stasis: the government has no ability to bootstrap markets in the manner the law dictates.

We see this pattern repeated. Industry, happy with their oligopolies (hell, just look back at Ma Bell, she never did voluntarily sell phones; it took the government breaking the company up to get it done), maintain them. And that’s what we see with cable. And that’s what we’ve seen with tobacco’s sluggish entry into the electronic cigarette market. And so on.

But given enough time, evolution takes its course. The advent of Internet Protocol video services has begun to foster new set-top boxes. New services. Although still developing, it seems clear that before long the industry that didn’t want to evolve will become extinct. Or will likely use whatever cash they have left to buy some small piece of the new industry just as their mast splinters and their sails (and sales) fall to the sea floor.

Ahoy, but a new raider appears on the horizon. We’ve been reading about self-driving cars, and that the ownership of cars will die off. That’s both good and bad, depending on how quickly an oligopoly develops. We will face the same sort of shipwreck of capitalism that cable has been. Like Michael Caine in The Island, stranded on a desert island of bloodthirsty, inbred swashbucklers.

Does the rental racket, per se, mean oligopoly? Not hardly. The oligopoly of phone and cable came not out of necessity but the desire for an extra subscriber fee. Maybe with a provision similar to the Affordable Care Act’s 80% rule (that 80% of premiums go to actual care), it could have been avoided: if all rental fees had to be at least 80% provisioned for equipment replacement/upgrade.

But for cars, as long as the fleet-ready regulations are low enough, anyone could likely purchase and maintain a vehicle that could generate revenue. That is, if the requirements for an autonomous car to be rentable are low enough (some simple quality test system, payment/route system, etc.), it will thwart the ability for some few companies to simply control the market, excluding competitors.

IP Neutrality

RFC791, published in 1981, states that datagrams are independent entities, unrelated to any other datagram. Let’s call it what it is: Internet Protocol Neutrality. Viva IP!

Let’s stop calling it Network Neutrality, and let’s start calling it what it really is: Internet Protocol Neutrality.  If you are sending data via Internet Protocol (IP), then it should conform to the rules that have existed since the Internet began.  What are those rules?  Let’s quote from RFC791, shall we?

The internet protocol treats each internet datagram as an independent entity unrelated to any other internet datagram. There are no connections or logical circuits (virtual or otherwise).

What does that mean?  It means that if I send you a file, it filters down to the low levels of your Internet connection and is broken up into datagrams, chunks of data.  When these are sent out over the Internet, they are to be treated as wholly independent messages and routed as such.

That is the essence of network neutrality: a datagram is a datagram.

Now, let’s analyze the Google/Verizon proposal.  I do not have the stomach to ramble endlessly on each point, so I am taking pains to be brief on each of their “key elements.”

Consumer Protections

There is this word that crops up repeatedly in the document: lawful.  The word is problematic for a number of reasons, but primarily it is because the suggestion is that all data be inspected as deeply as needed to determine its legality.  Not only is this impossible (as data can always be disguised in a novel or unexpected fashion), but it flies in the face of the above-mentioned RFC.  It’s treating each datagram as a potential bad egg (if: blacklist) in the best case, and in the worst case it would only allow data it deemed innocuous to be routed (if: whitelist).


This is probably the funniest of the “key elements.”  It states that data should be treated fairly, unless “the presumption [is] rebutted.”  No, really: the whole element relies on something that the element itself says may not hold!  So we might as well just chuck this one out (except it makes it seem like they care at all).


Another proposal that an industry tell their customers what the deal actually is.  I’ve never, not once, in my entire life, seen a company actually do that.  If you want to change your phone, cable, internet, travel, bank, credit card, electricity, water, gas, insurance, or any other service (including government, depending on the department), good luck.  Their phone systems, their policies, their websites (including supposed industry leaders like Google) simply fail to meet their customers’ needs.  And it’s on purpose.

Your only real hope is that you get a real person that hasn’t been promoted or fired that is a good soul.  They are like angels from heaven when you find them, because you actually get what you need and you don’t have to kill anyone to get it.  But their legislative proposal isn’t going to deliver any angels.

Network Management

Boiler plate that basically indemnifies providers if they decide to violate any of the protective elements.  Some of the items here are valid (protecting against DoS and DDoS, for example), but that’s not its purpose.  It’s simply there to grant them permission to ignore the whole idea of Network Neutrality.

Additional Online Services

Here’s where my claim it should be renamed to IP Neutrality comes into play.  They aren’t talking about a separate, Non-IP realm where new services could be developed.  Their only distinction is based on whimsy: if the provider wants to charge you separately, or charge the provider of the service separately, then they can deem it to be an “Additional Online Service.”  More grinding away of any sort of teeth the Verizon/Google Network Neutrality could possibly have.

Wireless Broadband

They basically gave up at this point.  They flat out state that wireless is Laissez-faire.  Apparently Wireless never needs to stoop to the level of IP, eh?  No, it does… they just gave up trying.

Case-by-Case Enforcement

Here you can smell the arbitration clauses breeding like rabbits.  The FCC would have no rulemaking ability, regardless of ongoing harm that might be happening.  Consumers and providers would be “encouraged” (through binding arbitration agreements, no doubt at all) to forget the Seventh Amendment.  The FCC would have limited enforcement capabilities, and a maximum penalty of a measly $2 million (hardly deterrence if the service they are biased toward garners them an excess of the penalty, which it likely will).

Regulatory Authority and Broadband Access for Americans

Fully restricting regulation to Internet access itself and some palaver about “[spurring] deployment in unserved areas.”  We’ve given massive gifts to the telecommunications industry in the past, and they failed to roll out a single nanometer of the fiber or services they claimed they would.  Google is likely positioning itself to become an ISP in the long-term, and this is just one of the tools they hope will allow them to do just that.  Verizon, for its part, is watering at the mouth over the wireless portion, but also sees vast profits in its land-based broadband if this happens.

No amnesia for me, though.  The New York Times was conceptually right the first time and Google’s response was simply a misleading truth.