DirecTV Now Too Good to be Legal

AT&T’s Monday announcement of the DirecTV Now streaming service drew nearly unanimous applause from tech pundits. This is a new business model for cable TV that harnesses some of the power of the broadband networks to provide personalized sports, entertainment, and news packages to TV viewers. But some are critical, albeit for strange reasons.

Appealing Price and Flexibility

The pricing is designed to appeal to low-income viewers who don’t subscribe to cable today. Packages start at $35 for 60+ channels, including most of what I would watch.

The major exclusions at the bottom tier are CBS, IFC, Sundance, Science, MLB, and NBA. Given that MLB and NBA are already available for my teams at reasonable prices this isn’t a problem. And you can add HBO for five bucks a month.

Aside from the low price, the service appeals to cord cutters and “cord nevers” by supporting multiple platforms: you can watch through devices like Apple TV, on a computer, or on a smartphone.

Positive Reactions

Many of the pundits who typically bash communication firms are positively cheerful about DirecTV Now. WaPo’s Brian Fung calls it “a comprehensive solution for consumers looking to buy a cable-like experience without all the muss and fuss” of a stodgy cable package.

The Verge’s Chris Welch points to a freebie: “AT&T is offering an appealing hardware giveaway, as well: if you prepay for three months of DirecTV Now, you’ll receive a free Apple TV set-top box.”

CNet’s Joan Solsman gets the positioning: “DirecTV Now is part a new breed of online television aimed at cutting through the complication, by mimicking the benefits of regular pay-TV without the old-school trappings everyone hates.”

Where’s the Clickbait?

The reactions to DirecTV’s skinny bundles of cable content weren’t all rosy, of course. Just as we’re inundated in fake news generated by advertising-support websites, a significant portion of the tech news industry lives and dies by viral posts.

The Verge is a prime offender. We’ll never forget Nilay Patel’s reaction to the defeat of the Genachowski FCC’s Open Internet Order in the federal courts; he wrote THE INTERNET IS FUCKED. The post was fundamentally wrong in both its reasoning and its conclusion, but it achieved its objective by going viral.

The Verge couldn’t let the introduction of DirecTV Now pass with merely token criticism, so Managing Editor T. C. Sottek supplemented Welch’s story with the kind of wildly inaccurate, over-caffeinated, breathless reaction we expect from the site.

The End of the Internet

Sottek proclaims that AT&T just declared war on an open internet (and us). While it may look like a nice bundle of TV programs at a ridiculously low price for early adopters, DirecTV Now is really “a poison pill wrapped in a piece of cheese.”

Sottek warns that the skinny bundle is fundamentally destructive: “it looks like a good thing for consumers (free video!), but ultimately has the capability to rot competition and the open internet. Secretly, you see, DirecTV Now is evil because it combines the costs of content and delivery into one monthly bill.

That may look just like standard cable practice to you and me, but we’ve just don’t get clickbait wisdom. When TV programming is delivered in Internet Protocol packets over a broadband network, something magical happens, so damn the regulations, the law, common sense, and the engineering facts.

The cable company’s billing practice is known as “zero-rating” in tech policy speak, meaning the bill doesn’t include one line for content and another for the delivery network. While it’s totally OK for cable companies to bill that way, it’s apparently the end of the Internet when phone companies follow suit.

According to Sottek, it’s downright nuts not to bill separately for content and transport: “T-Mobile nearly went crazy trying to defend [zero-rating].” Sottek goes full Trump/Sanders, declaring “the system is rigged.” Yes, he really went there.

Sorry, But it’s Just Cheap TV

The FCC’s 2015 Open Internet Order argued that it was perfectly kosher to reclassify internet services provided over broadband networks under regulations designed for telephone services because the services appear to be similar.

In other words, the FCC reasoned that if a regulated service provided on Network A produces a similar result as a service offered on Network B, the services should be treated the same way even though the networks are different. This seemed to me like a stretch because internet access doesn’t look at all like to telephone service, but this was the FCC’s argument.

This feat of logic allowed the FCC to impose telephone network privacy regulations on broadband networks. But that same logic makes it inconsistent to forbid broadband networks carrying TV programs to consumers from combining content and carriage bills the same way cable networks do when performing the same task.

The classification game works both ways: if broadband networks are subject to open internet rules when they’re providing access to the internet, they’re not subject to such rules when they’re simply providing cable TV service.

The boundary between broadband network functions subject to open internet regulation and those exempt was fully explained in Tim Wu’s 2003 paper on net neutrality so I won’t repeat them here.

Suffice it to say that internet service connects consumers to information residing outside the scope of the provider’s broadband network. TV service simply carries content between points within the provider’s own network.

That Means it’s Not The Internet

Sottek complains that DirecTV Now makes the internet look like a cable network when DirecTV Now actually has nothing to do with the open internet. It simply uses video streaming to make a part of the broadband network look like, well, a video network. This is analogous to internet service making part of the broadband network look like an appendage of the internet.

So all of this harping about zero-rating means the complainer doesn’t understand the logic of the FCC’s Open Internet Order, doesn’t grasp the difference between a privately owned broadband network and the internet, doesn’t appreciate the value of logical consistency, and probably doesn’t have much respect for the internet.

If your goal is simply to scare people into sharing your post so you can get viral clickbait traffic you don’t need to understand those picky things, of course. And that seems to be most of what’s going on in T. C. Sottek’s Wednesday post in The Verge.

The Artificial Scarcity Canard

The most bizarre part of Sottek’s rant deals with scarcity of two types. First, he claims bandwidth scarcity is artificial: “[Zero-rating] is good for customers because ISPs have built immense scarcity into their networks.

But the reality is that every element of a broadband network – wired or wireless – reduces bandwidth scarcity. This is not to say that ISPs couldn’t invest even more than the $1.4 trillion they’ve invested since the dawn of broadband, but that’s unlikely to happen under present regulations. See Hal Singer’s Broken Promises: How The FCC Is Quietly Discouraging Broadband Investment.

Wireless scarcity is not even simply a matter of investment, it depends on the availability of flexible-use spectrum licenses. We could have more of these licenses if the government were to aggressively move its agencies to more efficient radio systems, but for the last eight years the pace of government upgrades has been glacial.

In fact, the best way to make more bandwidth available to consumers is to break down the walls between the various services that we get over broadband networks. When telephone, cable TV, and internet access all use IP and all flow over the same channels, we’ll have greater abundance.

But pretending all these services must be treated by government regulators the same way gives providers a good reason to maintain the walls and the scarcity they create.

Understanding Your Enemy

While it’s easy to denounce some hapless blogger for trolling for clickbait, as I have here, there are other factors in play. It troubles me that champions of net neutrality, the open internet, and broadband abundance fail to do their homework before denouncing breakthroughs in network architecture and service design.

At least some of the concerns of the folks at The Verge for the future of the internet are genuine. These concerns are often misplaced, however, because their lack of technical understanding so often causes them to paint themselves into corners.

Bad regulation – like the 2015 Open Internet Order – creates a cascade of bad follow-on consequences in such areas as pricing, investment, convergence, and service design. The sooner we get that order off the books the faster we get the next upgrade to the next upgrade of our broadband networks, and all the good that comes of it.

If engineers can design optimal 5G networks under loose, case-by-case regulations backed by large general rules, they will. That’s what they do.