Acronym Update 07/16/07

Topic:   Cable TV and Internet Concerns

I’m going to summarize a few responses I’ve given to clients recently concerning broadband cable Internet and home TV services.  I think you’ll find this very interesting…

#1 ) Q:  (Aside from issues with the cable company’s servers,) Why is my cable Internet so slow at certain times of the day?
A: I covered this partially a few weeks ago in an Update and want to re-iterate that it’s a growing problem, especially since adults are more dependent on and finding more uses for their broadband Internet connections.

I mentioned in that previous Update about peak usage time for cable internet service being typically from 4 to 11 PM during the school year.   Every kid logs on…. downloads music, movies, plays interactive games…. only a certain amount of bandwidth is available.   You know this slow song and dance … I’ve gotten lots of phone calls on this …. You want to know why you’re surfing at 200 kbps when your service is rated for 6000 kbps.  Remember, with cable internet the “rated speed” for your connection is just an “expected benchmark.”  You should be able to browse at that speed during normal times, but you could also go faster during times of low network usage.    Regardless of what your cable Internet speed should be, 200 kbps on a 6000 kbps connection is UNACCEPTABLE.

Here is some new information:   I read last week that by the end of 2007, 37% of American homes will own a high-definition TV.   If you are a cable TV customer, please understand that HD programming requires far more data (bandwidth) to be streamed from the street through the cable lines into your house than standard analog cable TV.  If you have a 2nd or 3rd set that is HD capable, the demands you are placing on the “cable pipe” are even greater.  Factor cable Internet into one of these scenarios and you may be rationing yourself down to table scraps of web surfing speed, especially if your neighbor has a similar set up.  If your cable internet connection at your home is priority number 1, (ie. You work out of the house or have several children that depend on the ‘Net for homework. ) ask your cable co. to install  a dedicated cable line to the room where you keep your cable modem.  Cable co.’s used to do this by default when customers had their connections installed, but over time most new sign-ups opted for self-install kits that allowed the customer to plug the their modem into an existing cable outlet and split the connection if need be.

If you feel that you have not been negatively affected by this problem, there is no need to change.   Otherwise, a dedicated cable line to your modem could definitely help you out.  There is no additional monthly cost for this, but you may pay a $30 to $100 fee (one – time) to your cable provider for the technician visit.

#2)  Q:  Is my cable bill going up next year?  Why?  What is U-Verse?

A:  Yes.  Governor Rell.   A product that may never see its full potential.

Yes, Connnecticut residents’ cable bills are going up in 2008.  The franchise tax on your bills is going up from 5.0 % to 5.5%   Money collected from franchise taxes helps to pay for your local public access stations — a noble cause indeed.   However, the tax increase is anti-consumer and anti-competitive.

Governor M. Jodi Rell signed this bill into law last week.   She believes that this tax increase will help increase competition in Connecticut’s TV markets  This tax increase applies to all cable TV bills and direct-to-home satellite TV bills (DirecTV and Dish Network).   The tax on satellite TV (in effect, a franchise tax) was instituted a few years ago when cable companies cried that they could not compete because satellite TV providers could offered more at lower prices.   FYI, Connecticut is only one of eight states that has this type of tax on direct-to-home satellite TV.    There is a third medium for TV service that is coming into play in the Nutmeg State.   AT&T is offering U-Verse TV service which is transmitted over fiber optic phone lines into your house through a combination DSL modem / digital TV receiver box.  The cost for up to 3 boxes, including one DVR (digital video recorder = 21st century VCR) is included in the price.

However, U-Verse is a product that may never see its full potential.  AT&T claims that they have spent nearly $4 billion dollars developing this product to offer to their customers in states where they provide local phone service.   It doesn’t seem like there has been a great return on investment yet, because less than 50,000 customers have signed up nationwide.  Additionally, AT&T has chosen inferior technology to deploy their new service by brining the fiber optic lines only to a nearby telephone pole (Fiber To The Node).   Verizon (not Verizon Wireless) has opted to go with a vastly superior means of distributing their new TV service, where they are the local phone co. (ie.  Massachusetts, NY, NJ), by bringing fiber optic lines right into your home (Fiber To The Home).   For the record, Verizon has nearly 1 million customers for its “FiOS” service.  Here in Connecticut, AT&T has been accused of engaging in class warfare by picking and choosing where they want to offer the service.  To the best of my knowledge it is only being offered in parts of Fairfield County (of course), and sections of Newington and Wethersfield.   They are not advertising it on TV, because most people couldn’t sign up if they wanted to.  So as they upgrade certain neighborhoods to handle the U-Verse service, AT&T is going around in an ice-cream truck (don’t laugh) to recruit customers and sending representatives door to door.  AT&T is not bound by franchise rules here in Connecticut.  They were generously given a statewide franchise exemption by the Department of Public Utility Control.  It will be quite a long time before they offer the service in large cities or areas deemed “low income.”   In my opinion, it is a shame that they were able to get away with this because 1) I don’t believe increased taxes are a good public policy for increasing competition and 2)  you are basically forced to have AT&T home phone and DSL service to get their TV service.  Boo-hoo AT&T!!  Don’t go breaking my heart……

Have a spectacular week,