We've talked in the past about the sneaky nature of Washington DC lobbying, whereby the real lobbyists' goals are hidden as some sort of bogus grass roots campaign involving some random group of people. It looks like that's about to happen again, as a bunch of satellite TV and telcos have put together what is officially a "sports fan" lobbyist organization. However, it appears to really just be an anti-cable effort. The initial campaign is likely to be an attempt to stop the cable firms from their current effort to block competing television service providers from being able to carry cable-owned sports networks. The real fight is about who gets to control what TV sports content, but it sounds much nicer to pretend that it's "concerned sports fans" as a lobbying group, rather than "cable company competitors."

A bunch of folks have been sending in the recent Wired Magazine article talking about how Netflix's online streaming offering may be a disruptive innovation that takes down cable. The thinking is that, with Netflix service being built into lots of different settop devices, and the ability to watch various TV shows that are offered via DVD (and the Netflix streaming service, as well), why would people need cable any more? They can just wait until the "video" is out, and stream it via Netflix. The article may go a bit far in proclaiming Netflix as the winner of this battle right now, but it does suggest that (whether it's Netflix or some other provider) the model that cable television has relied on for so many years is certainly facing a pretty big disruption, one way or another.

While Mark Cuban's insisting that TV Everywhere is brilliant, it's difficult to see what the benefit is for users. We already noted that the whole program seemed to be something of a mess with no one agreeing on standards, meaning that there might be a bunch of different ones. Oh, and then there's the whole plan to include way too many ads and not let users skip any of them. Meanwhile, Broadband Reports notes that the various players appear to be bickering with each other over who pays for what... and who gets compensated for what. The whole thing is a recipe for a disaster. As Broadband Reports summarizes, "bickering between broadcasters and TV operators, limited selection, walled gardens and unskippable ads" are the sort of things that drive people to other options, such as file sharing -- which is what TV Everywhere was supposed to prevent.

Back in March, some cable companies announced plans for an offering called TV Everywhere, which was designed not to actually add value to your cable subscription plan, but to pressure TV networks to stop putting their content online for free, and offer it, instead, via cable authentication. For users, it would mean the ability to watch their cable subscriptions online, but only after they authenticate themselves, which seemed like a big hassle. It may be an even bigger hassle. Apparently, in this effort to take on things like Hulu (and, to a lesser extent, YouTube) no one at the cable companies got the message that simplicity is what made those sites work:

CBS Interactive president Quincy Smith this week proclaimed that there's no unified standard among cable companies for the project, and dozens of companies are all approaching back-end technology differently. There's also no real consensus between cable companies on how to proceed. One result? Users not having a central resource for video content.

Bowman suggested that projects like TV Everywhere may not yield a single site that will contain content from dozens of programmers. Instead, the authentication system the industry develops may be used to point pay-TV subscribers to several different sites to view their pay-TV content online.

Now that sounds like a winner.

We've already been incredibly skeptical of the plans by certain cable companies to get TV networks to limit their content such that it can only be accessed online if you have a cable TV subscription. The whole thing is based on setting up artificial barriers and artificial scarcity to hold back the inevitable. Such plans never do well. They piss off users and drive them to alternatives. And, of course, you just knew that the likes of Comcast and Time Warner Cable would like screw up the execution too. Many folks (myself included) have been surprised at how well (for the most part) Hulu executed, but just leave it to big cable companies not to learn from Hulu's success.

Reports are coming out claiming that when the shows are put online for this "TV Everywhere" program they'll include the full slate of ads seen during the regular TV version. Studies have shown that this is a bad, bad idea. Having so many commercials -- especially on a platform (the internet) with so many other options, simply drives people away. Hulu learned very quickly to limit the number of ads to just a few -- and it's discovered that (1) people actually pay attention to them and (2) they can charge higher rates. One more sign that this TV Everywhere program is a disaster in the making.

When companies offer "bundles" of the various services they offer, part of the point is that if you're buying multiple packages together, you get some sort of "discount." It doesn't make much sense to go in the other direction, but apparently Comcast thinks it does. Reader Lucas points out that the company is currently offering the following "Digital Double Play" bundle, which consists of both the "Comcast High Speed Internet, with Powerboost" and the "Comcast Digital Starter Package" for the temporarily discounted bundle price of $69.99/month for six months (after which, the price jumps to $109.90/month). Ok. But let's look up the components separately. It appears that the basic high speed internet with Powerboost is available separately as a promotion at $19.99/month for six months, after which it becomes $42.95/month. And then there's the Comcast Digital Starter Package. That appears to be offered as a promotion for $29.99/month for six months (after which it jumps to $59.95): So... at a first pass, it looks like you could order each package separately and pay $49.99/month for six months and $102.90... or you can buy the "bundle" and pay $69.99/month for six months and then $109.90/month afterwards. What a non-bargain! Of course, if you start to look closer, it's a little bit different. The digital TV package, even though it's described as the "Digital Starter Package" also includes the on-demand library. So if we dig deeper into Comcast's options, we find that the equivalent tier isn't actually the "Digital Starter Package" but the "Digital Preferred" package. Kind of odd that you'd sell the digital "preferred" package while claiming it's the starter package -- but that appears to be what Comcast is doing. So, with this package, the six month promotion is $44.99/month and then it jumps to $76.90/month: So, now, the "unbundled" combined offering is actually $64.99... Still $5/month cheaper than the "bundle" -- and without the bundle at least you get the satisfaction of knowing you have the "preferred" package, rather than the "starter" package (oh yeah, and of paying $5 less than the suckers who bought the bundle.). But then, finally, after six months, your price will jump to $119.85 -- or $10 more expensive than the bundle. So perhaps there is some method to the madness, but Comcast sure doesn't make that very clear.

People are cutting back on lots of spending these days, but one area that was supposedly relatively safe was in-home entertainment expenditures. Things like cable and satellite TV and Netflix were thought to even thrive during economic downturns as people looked to limit going out, choosing instead to stay in and be entertained. While that seems to be working out for Netflix, cable companies are starting to feel the pinch as people drop their subscriptions and get their TV fix online. While it's a relatively small number of people that are making the move, it's the sort of thing that cable companies have been concerned about for a while. The WSJ story talks about some moves by the likes of Comcast and Time Warner to grab more online viewers, but if the cable companies continue to try and treat their online efforts in the same way as their traditional offerings, it's hard to see much success. It doesn't seem like a coincidence that this is happening as cable companies are looking to introduce caps on their broadband services. They say it's because some consumers are creating too much traffic, in part because of their online video viewing, and it's straining their networks. But perhaps it's just a way to try and capture lost TV revenue from cord-cutters? Of course, trying to get users who are going broadband-only for their TV to take on metered broadband seems like a good way to drive them to competitors with uncapped plans.

There's a myth out there among some newspapers folks that "if only" the newspapers hadn't committed the "original sin" of putting content online for free, the newspapers wouldn't be facing difficulties these days. It's the kind of story that sounds good if you don't look too closely at the details. Plenty of newspapers did try to charge and almost all of them failed. People were never that interested in paying for news online, and plenty of new sources of news were popping up for free online anyway. Charging was a dead-end model from the beginning -- and to understand why, all you need to do is understand a little basic economics concerning the difference between infinite and scarce goods.

However, it looks like Mark Cuban believes in that "original sin" concept, and is posting a series of blog posts to try to prevent TV networks from making the same "mistake." It started with the claim that anyone who thinks TV is going a la carte online is crazy, because the "content companies" will never give up the fees they earn from the networks. After a bunch of folks challenged him on this, Cuban added a second post asking a bunch of questions, but which did little to actually answer his critics. He (like NBC Universal execs) laughs off the "threat" of people switching to all online access to TV content, noting that very few people have done so. This surprises me, since you'd think that Cuban would be familiar enough with Clayton Christensen's work to know that just because there are only a few early adopters (and the quality isn't as good) that it doesn't mean that it's not a potential threat. In fact, those questions are basically the de facto list of questions that an "incumbent" player tends to ask when facing a Christensen-style "innovator's dilemma" just before the upstart technology really begins to hurt the legacy business.

From there, however, it just gets silly. Cuban tries to stir up some sort of moral outrage among cable subscribers, exhorting them to call their cable companies and satellite providers demanding that they not allow any TV content online for free (as if it's their choice). His reasoning?

Those of us who enjoy this matter of life should be completely outraged that there are those who are leeching off the money we pay to enjoy tv. Our check goes to pay our bill. The money then goes to pay for the tv network, which in turn goes to pay for the content. Its a system that works.

Like any good system, there are those that want to have their cake and eat it to. The content we pay for ? They want it for free. We pay for it, they want it for free.

How is that fair ? Where is the justice ?

We pay for the content. We should be able to get it where we want it, and when we want it. Those who want it for free ? They should pay too.

Yes, and newspapers shouldn't be online for free. And music shouldn't be online for free. But they are and they will continue to be. Why? Because of those basic economics. As Saul Hansell at the NY Times points out, this is the nature of competition. Sure, everyone would love to keep getting paid, but some enterprising content company is going to recognize that getting more attention is a lot more valuable in the long run than keeping its content locked up on cable networks. Those content providers are going to realize that by breaking free and getting the content out there, they're able to stand out against those who lock up their content. They're going to be able to score more viewers and from that, more advertising dollars. And that will hurt those who keep their content locked up -- so, they'll be forced to free up their content as well. It's just basic economics.

Oh, and as for the whole "moral outrage" bit -- it's difficult to see how people who are already pretty pissed off about constantly rising cable TV prices are suddenly going to rise up and tell the cable companies to keep on charging them higher prices by locking up content. No. It seems likely that most of those folks are pretty excited about the idea that some of that content might go free, and can actually push down cable TV rates.

I've been on record for quite some time as being opposed to metered broadband caps by ISPs. Plenty of others -- including some of the other Techdirt writers -- disagree, insisting that they will work fine allowing ISPs to "differentiate" service levels. I find that to be quite optimistic, as most of the examples we've seen so far have really only involved ISPs putting in ridiculously low caps in order to squeeze excess money out of people. And, before anyone says it, there's no evidence that ISPs "need" to cap usage to avoid a bandwidth crunch. Such things have been disproved time and time again.

But, my biggest reason for opposing broadband caps is that it will stifle online innovation in a variety of ways. First, bandwidth caps don't give ISPs much real incentive to invest in more bandwidth (contrary to their claims). That's because the more "congested" they can show their network is, the more they can charge more for basic usage. It sets up incentives for the ISPs to want more congestion, rather than less. Second, it will greatly limit the adoption of new and innovative services. Suddenly there's an additional "bandwidth" cost to testing out certain types of apps. This makes people less willing to even bother, and basically knocks out any (relatively) high bandwidth service before it can even get started.

For example, look at Larry Lessig's recent experience while traveling in New Zealand. He's apparently "subscribed" to the TV show House via iTunes. So, at the hotel in New Zealand, he paid for expensive broadband service that mentioned, in the fine print, that his access was limited to a grand total of 1 gig. He logged in and started checking email. In the background, iTunes started downloading the latest (high def) episode of House which itself ran 1.5 gigs. So half an hour later, not only is his broadband cut off, but a message pops up telling him he's being fined for "violating ethical rules." It's troubling enough that the provider somehow thinks it's an ethical violation -- but this shows how bandwidth caps can easily stifle perfectly legitimate activities and aren't (as many have implied) about "stopping pirates."

And, it's for this reason that many entertainment companies should also reconsider their support of caps. Many in the entertainment business have supported caps as one (of many) ways to combat "piracy." But now, as more and more legitimate, authorized content services are available online, these caps are going to do serious harm to their online business as well. Now, perhaps some of them (stupidly) think that this is okay, because it will just drive people back to the "old way" of doing things, that's unlikely to happen. It's just going to piss people off. Once you've shown them that they can do something, people don't tend to like having that option taken away from them.

While this happens pretty frequently, you can bet that battles like the one going on between Viacom and Time Warner Cable are going to become more and more bitter in the next few years. Unless an agreement is reached (which is likely), Time Warner Cable customers may lose access to popular Viacom channels such as MTV, Nickelodian and Comedy Central. The issue is that Viacom wants to significantly raise the costs to TWC for those stations (between a 22% and 36% price increase). TWC would just pass those costs on to consumers, and the company accurately realizes that this would seriously piss off customers at a time when customers are increasingly realizing that they can drop cable TV and just go online for much of the programming they want.

And that, actually, is part of the issue. One of TWC's big complaints is that Viacom now offers most of the shows on those channels for free online -- where TWC isn't able to get any of the associated ad revenue. The real question is who is in a stronger bargaining position. If TWC dumps Viacom stations, and people start realizing they're fine with just being able to view the content online, both TWC and Viacom will likely lose out (the ad revenue that Viacom gets online won't come close to matching the carriage fees from TWC). The whole thing is a big game of chicken, but we're going to see it play out many more times, as the relative value of the cable provider as the exclusive delivery mechanism for television content starts to decrease. Of course, that only makes the content companies want to increase prices more to make up for the loss -- and the cycle actually accelerates. Both sides stand to lose out unless new arrangements are reached.