Cable Industry Shorts – February 2017

television-sony-en-casa-de-mis-padresHere are a few industry shorts, each not quite long enough to justify a full blog:

New York Takes on Charter. On February 1 the Attorney General of New York sued Time Warner Cable (which is now Charter Spectrum) for delivering inferior products that don’t match what was being advertised to customers.

The specific issue is that the majority of the cable modems provided to customers in the state are not capable of delivering the speeds being sold to customers. For example, in 2013 it was demonstrated that ¾ of the modems sold to supply 20 Mbps service were unable to process that much speed. And it appears that most of those modems still have not been upgraded. The lawsuit accuses the company of never notifying customers that they had inferior modems, and also of recycling inferior modems back to new data customers.

Charter says that the law suit isn’t needed because they have been making improvements since purchasing Time Warner. But the lawsuit alleges that the old practices are still widespread. The lawsuit is asking for significant refunds to affected customers.

Comcast Charging for Roku Boxes. In perhaps the best demonstration of why Comcast is rated so poorly by customers, Comcast says they will still charge customers if they use a Roku box to watch TV rather than a Comcast settop box.

Comcast currently has one of the highest settop box charges around at $9.95 per month, per box.  They also then charge $7.45 for each additional TV in the home using an ‘additional outlet charge.” Comcast hasn’t announced the rate for using a Roku box, but speculation is it will be at the $7.45 rate. This is clearly a case of a cable company charging for something for which they are providing zero value. Perhaps the company has already been emboldened by an FCC and Congress that say they will be reducing regulations.

For a customer to use the XFINITY TV app on a Roku box they must currently subscribe to Comcast cable TV and broadband service. They must have and pay for at least one settop box and also have a cablecard and a compatible IP gateway in the home.

Esquire Channel Disappearing. There is a lot of pressure by the big cable companies to cut back on the number of channels, and the expectations are that less popular networks are going to start disappearing.

The latest network that will vanish from cable line-ups is the Esquire channel. It’s a low-rated channel with content aimed at upscale men that is rated at 82 out of the 105 major cable networks. It was just launched in 2013 and had grown to 60 million subscribers. But last month AT&T and its DirecTV subsidiary decided to drop the channel, cutting 15 million subscribers. Charter is also considering dropping the channel, so NBC, the owner of Esquire, decided to kill the channel for cable systems. Some remnants of it will remain on-line.

Esquire joins the millennial channel Pivot and NBC’s Universal Sports as channels that disappeared in the last year. There are likely more to come and there are 23 networks with lower ratings than Esquire including Fox Business, Great American Country, Chiller and the Golf Channel.

Cable Companies Stop Sending Piracy Warnings. Just about every large cable company and telco has stopped forwarding messages to customers about piracy that were sent through the Copyright Alert System (CAS). These alerts were sent to customers who made illegal downloads of movies or music. The main purpose of these alerts was to warn customers that they were violating copyright laws. The content industry has always pressured ISPs to somehow punish habitual content pirates, but that has never happened to any significant degree.

Groups like the RIAA which were pushing ISPs for compliance have said they will look for an alternative. They said for now that they will probably back off from suing end user customers – a tactic that never seemed to make much difference. This is another case where technology outstripped the law. The CAS launched at the heyday of peer-to-peer file sharing, and while that still exists, it’s not the way that most copyrighted material is shared these days. We now live in a more nuanced world where there is copyrighted material on sites like YouTube sitting right next to mountains of non-copyrighted material, and it’s a lot harder to pinpoint copyright violations.

When Metallica Sued Napster

napster11Anybody who reads this blog knows that I am intrigued by the history of technology and I look back periodically at past events when they seem to be relevant to something happening today. This past week I saw an article that mentioned that April was the fifteenth anniversary of the lawsuit between Metallica and Napster. In retrospect, that was a very important ruling that has had implications in a lot of what we allow or don’t allow on the web today.

So let me look back at a few of the facts of that case and then discuss why this was so important. The first thing that surprised me about this is that this was only fifteen years ago. I remember the case vividly, but in my memory it was older than that and was back at the beginning of the Internet (and in many ways it does).

The case was very straightforward. If you recall, Napster was the first major peer-to-peer file-sharing service. It was very simple in operations and it allowed you to see MP3 files on other Napster users’ computers as long as you agreed to make your own files available. Napster users were then free to download any file they found in the Napster system. You could do simple searches by either song name or artist to navigate the system.

Of course, Napster put the whole music industry into a tizzy because people were using it to download millions of music files free every day. This was illegal for anybody who downloaded songs since they were violating copyrights and getting music without paying the musicians or the record companies.

The industry railed loudly against Napster, but I’m not sure they knew entirely what to do about them. While users of Napster were breaking the law, it was not quite so clear that Napster was doing anything wrong, and the industry feared a court case that might give a legal go-ahead to Napster. The industry was looking at legislative fixes to the problem.

But then along came Metallica. The band got incensed when their song ‘I Disappear’ from the Mission Impossible II soundtrack appeared on Napster before it was even officially released. The band decided to sue Napster to stop the practice and in the process became the spokespeople for the whole industry. The Recording Industry Association of America (RIAA) and Metallica offered settlement alternatives to Napster, such as scrubbing their system of all copyrighted material, but this was impossible at that time (and probably still is). In the process of trying to negotiate a settlement, Napster went bankrupt paying to defend itself.

But this lawsuit sparked an ongoing and major debate about ownership rights of content versus the rights of Internet companies to make content available. While it became clear that blatant file-sharing like what Napster did is illegal, there are plenty of more nuanced fights today in the ongoing battle between artists and internet companies.

The fight moved on from Napster to Apple’s battle against Digital Rights Management (DRM), the practice of tying music recordings to a music player. From there the fight migrated to Congress with attempts to pass the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) that were pushed by the music and movie industries to give them a leg up over internet companies.

You still see this same fight today when artists like Taylor Swift are fighting with Spotify to be justly paid for their content. You see this same battle between authors and Amazon for not properly rewarding them for their works. There is also a never ending battle between video content providers and sites like YouTube that allow people to easily upload copyrighted material.

It’s likely that the battle is going to be ongoing. Some visionaries foresee a day when micropayments are widely accepted and users can easily buy content directly from artists. But that is never going to be a perfect solution because people love the convenience of services like Spotify or Beats that put the content they like in an easy-to-use format. And as we saw with Napster, millions of people will grab copyrighted content for free if they are allowed to.

Another Hassle for ISPs – Policing Pirated Music

Louis_Armstrong_restored_(color_version)You probably remember the attempts of the Recording Industry Association of America (RIAA) last decade when they tried to stop file sharing of music by randomly suing those who shared music files on line. They would go after college students and others and sue them for $750 to $12,000 per song shared and made the cases public to scare other people from sharing music. They stopped this practice in 2008 and instead went after ISPS, asking them to deny service to people who violated their copyrights more than three times.

But now the issue is back in play and ISPs are going to find themselves routinely asked to chase file sharers. Some of the music industry has made a deal with a new company called Rightscorp which is now chasing file sharers instead of the RIAA. Rightscorp asks file sharers to settle for $20 per song violation instead of being sued, and any collected proceeds are shared 50/50 with the recording labels like BMG and Warner Brothers.

The company started in 2012. In 2013 they collected around $750,000 in settlements, but they have a technology that could let them pursue these violations by the millions. And that is where the new hassle for ISPs will come in.

Rightscorp monitors file uploads and downloads at file sharing sites like BitTorrent. They are capturing the IP address of people sharing songs illegally. While they don’t know the identity of the violator they know the ISP involved, and they are asking ISPs to forward their demands for settlements on to violators.

Rightscorp is relying on the Digital Millennium Copyright Act (DMCA) which they believe requires ISPs to forward on their notices. They claim to be working now with 70 ISPs, but there are many ISPs who either do not think they are required to pass on settlement offers, or who pass on only an abbreviated version of the Rightscorp demand for payment. But one would expect with the technology they are using that they are going to be asking every ISP to help them.

There are existing alternatives to what Rightscorp is doing. There is already a process under development among ISPs that is creating a ‘six strike’ system that will deny Internet access to people who violate copy rights multiple times. But Rightscorp and others believe that this system will not have teeth since the ISPS are not heavily invested in kicking out paying customers.

Rightscorp has developed a technology that lets them track file sharing across multiple IP addresses. This is needed since ISPs issue a new IP address to a user any time they initiate a new connection to their server. Rightcorp believes that their audit trail showing multiple violations gives them the leverage to get ISPs to help them. Certainly that is the kind of evidence that could be used in court against an ISP who refuses to help them. They have not sued an ISP yet, but the threat is there. And obviously some ISPs are helping them since they have collected so far from over 70,000 violators.

As an ISP you need to decide what to do when you get one of these demands from Rightscorp. Do you do nothing, do you pass on the full demand to your customers or do you somehow edit the demand before forwarding it? Do you share your customer’s identity with Rightscorp? These are not easy questions to answer. But one thing is for sure and this is just one more of the little hassles that keep getting loaded onto being an ISP today.