In the preceding article, The Relative Cost of Internet Access, we looked at the differences in costs between various service tiers available from two Internet Service Providers. For those interested in a simple recap, here it is: the cost of a broadband Internet connection in Germany is (slightly) lower than the cost of comparable connection in the United States. But not only is the pricing more attractive in Germany, the speed of the connection is superior as well. Excluding special offers and discounts, customers in Germany have no trouble signing up for an uncapped connection of 32 Mbit/s down, while U.S. customers, looking to spend no more than their German counterparts, are limited to only 6 Mbit/s.

So now the question remains: why the hell is an Internet connection so darn expensive in the US, and why are so many ISPs now considering, or, worse yet, actually implementing, bandwidth caps?

In order to answer this question, let’s take a brief look at which ISPs are capping their customers and to what extent they are doing so:

• Comcast: 250GB cap on total bandwidth consumption per month.
• Time Warner Cable: Toying with the idea of total bandwidth caps at about 40 - 75GB per month.
• Cablevision: No explicitly stated cap; although some report that heavy usage is frowned upon.
• Verizon FIOS: No cap, whatsoever.

These four — Comcast, Time Warner Cable, Cablevision, and Verizon — represent practically the entire high-speed ISP industry as it exists today in the United States; so much for competition, right?

Notice anything interesting about the various caps that these four companies are imposing on their customers? Here’s a hint: look at what else they’re invested in.

Comcast and Time Warner both own a variety of actual TV networks. More specifically, Comcast owns E! Entertainment, The Style Network and G4. Similarly Time Warner also owns a plethora of channels, networks, and even a studio or two:  New Line Cinema, HBO, TBS, Warner Bros., Cartoon Network, and the list goes on.

But why should it matter what else these companies do, as long as they can provide us with a digital connection to the outside world? Well, a major part of the problem is that because these companies have been allowed to expand into so many different direction (without any proper oversight from either the government, or the executives heading the boards), they are now so big that they simple too cumbersome to be able to adapt swiftly to the latest industry tends.

If you’ve set up a business model around television stations, networks, and programming for said media, what is the one thing that your business relies on? Television viewership!

And what’s the biggest threat to television at the moment?

Why, it’s the Internet, of course.

So, at the end of the day, it all comes down to traditional television programming versus diverse, à la carte Internet content.

Now, one might make the observation at this point that there really shouldn’t be a problem here, since Comcast and Time Warner are two business that are well invested in both of these markets; that is, they both offer Internet access, and then both offer television services. Though correct, this observation misses a critical point. Companies of this caliber are, relatively speaking, old gaints, who have over the years gotten very used to a single, very lucrative business model, which, at the end of the day, boils down to nothing more than the number of people tuning in. Internet service for these companies, in comparison, is only a small branch in a much larger business model. Additionally, offering Internet access is not, by any stretch of the imagination, the same thing as owning a TV network, let alone several of them. With ownership comes the ability to dictate and create content, which is not the case if you’re only acting as a doorkeeper to a vast realm of content and knowledge.

Being used to seeing the majority of their income stem from television based content, companies like Comcast and, to a larger extent, Time Warner are scared out of their wits; the Internet is stealing away viewers and they have no clue what to do about it. There now exist services such as Hulu and Netflix, which have led thousands upon thousands of people to drastically reduce the time that they spend in front of an actual television — mind you, they’re still spending a lot of time in front of a screen; they’re just not putting their feet up and leaning back.

Due to services like Hulu and Netflix, less and less revenue is streaming into the coffers of Comcast and Time Warner. They might be providing the Internet access, but that really is all that they are doing. They see absolutely no additional income from what the consumer actually does with that access.

The simple fact is that people are watching less and less actual TV, and from the perspective of those invested in both the Internet service and television service industries, the only real short-term solution to this problem is to limit the amount of time that customers can spend using online services such as Hulu and Netflix. This is simply due to the fact that under the current model there is far less money to be made providing content over the ‘Net than through the tube.  For a lot of providers, the easiest way of reducing the time spent with a browser instead of a remote is simply to impose bandwidth caps and/or increase the price of pulling in the bits.

Of course, Comcast and Time Warner would be the last to admit that they are behind the times and that their coveted revenue models are antiquated and may be approaching extinction. The excuse typically peddled by Comcast and its ilk is that there are users — and by their own admittance, way less than 1% — who use exorbitant amounts of data on a monthly basis, and that these customers, in doing so, are spoiling the party for the rest of us. Without getting too far off topic, let me just say that I have a very hard time believing that.

If customers can only consume so many bits per month, then, logically speaking, there should come a point at which they will be forced to stop using the Internet to watch their favorite shows. And if they can’t watch their favorite shows on the ‘Net, customers will have to revert back to watching television instead, which is exactly what the cable companies want — and need.

Barely a week into the new year, several stories broke suggesting that the National Telecommunications and Information Administration had run out of funding to provide any more coupons for the upcoming digital television transition. Responding to this news, the Obama administration began an immediate campaign to delay the transition, fearing that as many as six million households would be unable to meet the transition deadline.

After a new bill was drawn up, it was quickly rammed through the Senate. Yet, in a surprising turn of events the bill failed to make it through the House of Representatives. Undaunted, however, by this initial defeat, the bill was resubmitted, and on the second pass through, it was voted into law — 264 for, versus 158 against.

So, now that the DTV transition date has been officially moved back, to June 12^th, 2009, what does that mean for the average consumer?

Well, for one, there’s going to be an awful lot of seriously confused consumers. For months now, the air waves have been saturated with the public service announcements urging consumers to get ready for the transition to DTV. When the first announcements were made that such a transition was in the works, there was a tremendous amount of confusion regarding the exact purpose of this transition, how it was to be implemented, how it would occur, and whether or not services would be lost.

The first batch of public service announcements weren’t very helpful; only those who had read about the issue in the paper, or on the Internet, knew what was going to happen, and how they might be affected, if at all. However, as the advertising campaign continued, a little more effort was put into explaining, in lay man’s terms of course, what was supposed to occur and how it would affect those with “rabbit ear” antennas.

At least one thing all those commercials was consistent: February 17^th, 2009.

That was supposed to be the date that all analog over-the-air broadcasts had to cease or be converted over to digital. That date, February 17^th, 2009, had been on the books for well over a year, and as we entered the new year, it seemed as if everyone at least knew that something important was to happen on that day.

Not wanting to upset any of its constituents, the government quickly put a financial aid program into place:

Between January 1, 2008, and July 31, 2009, all U.S. households will be eligible to request up to two coupons, worth $40 each, to be used toward the purchase of up to two, digital-to-analog converter boxes. The coupons may only be used for eligible converter boxes sold at participating consumer electronics retailers, and the coupons must be used at the time of purchase. (Please note that these coupons will expire 90 days after mailing). Manufacturers estimate that digital-to-analog converter boxes will sell from $40 to $70 each. This is a one-time cost.

The point of these converters would be to take the newly mandated digital broadcast and convert it back to an analog signal so that it can be processed by older generation televisions that lack a digital tuner.

Those in favor of the coupon program argued that every household in America should be able to receive at lease some sort of a television signal, so that, in times of emergencies, everyone can be kept informed and safe.

On the other side of the fence, the oft heard argument against the proposed delay was the the government ought to get this transition over with as soon as possible for the benefit of everyone involved: Congress has an economic crisis to deal with; broadcasters are tired of wasting precious revenue-generating airtime to keep the public informed; retailers can’t wait to clear the converter boxes of the shelves in order to start selling other electronics with higher profit-margins; broadcasting stations already have plans and equipment in place, and just like like everyone else in the industry they, too, are ready to just get this whole transition over and done with, once and for all.

Well, maybe it’s just me, but in my opinion, the government should have had far less of an involvement in this entire process than it has had; the industry could have taken care of this all on its own.

Not only is the delay going to cost the industry a lot of money, it’s also going to cost the tax payers, who will inevitable have to foot the bill for this ridiculous coupon program. The first coupons were made available at the start of 2008 – that’s more than a year of advanced notice for consumers to save up $40-$70 dollars for a one-time investment in a converter box, and that’s if they even need one in the first place.

If it’s really so much of a problem that several million households might be without TV for those few days it’ll take to figure out what’s going on, then the government should have told those people to just turn on their damn radios! Remember those? That little box, with the shiny antenna that makes noise. Putting that message out would have been far easier, and cost way less, and trying to explain where people can go to sign up for a government issued coupon.

Oh, and speaking of coupons, if those six million households can’t afford a radio, give them a $10 coupon to go get one, not a $40 coupon to get a converter box. So, assuming that there are about 100,000,000 households in the United States, and that about 6% of them need a coupon, issuing a radio coupon instead of a converter-box coupon would save the taxpayers about: (100,000,000)(0.06)(40-10) , or a 180,000,000 dollars – and that’s a conservative estimate! Saving money is so hard, isn’t it?

Not thirty minutes ago, the UPS truck came to a screeching halt outside my apartment to deliver the package that I’ve been eagerly awaiting the entire week. Trying hard to contain my enthusiasm, I carefully opened the DVD-sized box that Amazon shipped it in, and there it was: Far Cry 2, Ubisoft’s latest and greatest — or so they claim…

The reviews have been pretty positive so far, with Metacritic giving it a very respectable aggregated score of 88%,  but consumers seen to have a different opinion so far. One need only glance at the user reviews on Amazon.com to know why: SecuRom, a DRM protection scheme that can only be described as malware.

A sizable number of gamers seem to have gotten it into their heads that if they do nothing but give DRM-laden games one or two star reviews on Amazon that the developers might get a clue and stop hassling honest users with DRM. I suppose that this approach might yield some results, but I’m not too optimistic. As long as these large game studios are run by naive, elderly executives, and over-cautious shareholders, I foresee little hope of getting any an A-list title on the shelves without the inclusion of some sort of obnoxious scheme to protect the game from piracy.

I firmly believe that the issue is one of utter ignorance and naivety. The inclusion of a DRM scheme, like SecuRom,  in a game is meant to deter and prevent piracy, which is all fine and well; I, like the vast majority of consumers, have absolutely no problem supporting artists and developers, nor do I believe that studios should sit idly by while their hard work is being sold on the black market. I do, however, take issue with the manner in which SecuRom approaches this problem.

The reason I’m writing this post is that I’ve just about had with SecuRom, and it’s absurd approach to anti-piracy. Having just unwrapped the game, I popped the disc into my DVD drive and fired up the installer. All okay so far; the game, weighing in at a very moderate 3.2 gigs, installed without a hitch. However, as soon as I double-clicked the executable, SecuRom intervened:

Okay, fair enough, I guess this is a reasonable objection, since I do have one application that I suppose might facilitate piracy, namely PowerISO. After all, the application does allow for the mounting of ISO images on virtual drives, which would be a crucial step in installing pirated content. So, fine, this is the first time in a while that I’ve had DRM bitch at me, so I was willing to play along. After booting PowerISO off my computer, and rebooting my rig, I tried again: but no, I got the exact same error!

A few minutes with Google revealed that I’m not the only one experiencing trouble, and that the issue is actually fairly widespread. In fact, the guys responsible for this poorly implemented mess have already acknowledged their mistake and posted a fix, which is nothing more than a modified executable.

At this point, though, I don’t know what I find more aggravating: the fact that studios have absolutely no trust in their own customers, or that they apparently have no issue with shipping defective merchandise! The game has been out for barely a week, and already a patch is needed to even get the damn thing running — this is beyond absurd! Where was Quality Assurance on this one?

Update: So far I’ve only logged a few hours with the game, and I’ve had no further issues with SecuRom, but, then again, I haven’t actually reinstalled PowerISO yet…

Congress must seem to think that they are on a role when it comes to technology issues; first they wanted to scrutinize the Google/DoubleClick merger, then they took an interest in the iPhone and it’s exclusive contract, and how they’re coming after P2P as a possible threat to national security. However, unlike the first two high profile issues, their current crusade is just stupid; in fact, it’s downright shameful.

What would any rational entity do if they noticed that their sensitive data is being leaked to P2P networks? They would most certainly not do what Government Reform Committee Chairman Henry Waxman and Representative Tom Davis are currently doing, which is blame the P2P networks for leaking national secrets to potential terrorists. During the hearings, Mark Gorton, the chairman of LimeWire, was actually accused of harming national security by offering his P2P product. Waxman even mentioned that he’s thinking about proposing laws to regulate peer-to-peer file sharing. Oh boy.

According to Ars Technica, Waxman stated that his intent was not to “shutdown P2P networks or bash P2P technology,” but to determine if such applications as Limewire create an “unacceptable risk for consumers, corporations, and government” entities. He went on to say that they conducted a few simple searches with LimeWire, the most popular P2P client, and found “personal bank records and tax forms, attorney-client communications, the corporate strategies of Fortune 500 companies, confidential corporate accounting documents, internal documents from political campaigns, government emergency response plans, and even military operation orders.”

LimeWire isn’t the one creating the “unacceptable risk,” it’s the foolish employees who do so. In no way, whatsoever, is it the fault of LimeWire, and other such programs, that the average government stooge is woefully uneducated when it comes to the proper use of a computer. The problem lies with those handling the computers and the sensitive information on them, not with the P2P programs.

Anyone who installs LimeWire is explicitly told that any information in the shared folder will be accessible to anyone on the network. And it’s not like this folder is names “My Shared Documents” or anything like that either. So, how bloody stupid would you have to be to place sensitive information in this folder?

Why isn’t Congress assailing the governmental IT departments of the various agencies critical to the maintenance of national security for even allowing users to install third-party, unauthorized software in the first place? Any network that has information on it sensitive enough to potentially harm an entire nation should simply not have direct access to the outside world, and should be locked down so tight that every mouse movement and keystroke is carefully scrutinized and logged.

The fact that Mark Gorton was even called in to testify, clearly shows how absolutely clueless the members of Congress are when it comes to the Internet. Their ignorance is downright infuriating. Instead of places the blame on P2P technology, they should spend their time passing legislation demanding that employees have a minimum degree of computer knowledge and security awareness.