Internet Court Ruling to Benefit Terrestrial Radio?

[JustPastBuffalo]

A US Court of Appeals ruling regarding Internet broadband may have a pronounced effect on how Internet radio competes with terrestrial radio. Long before the Court delivered its decision today, I had lunch with a radio bud and the topic of streaming came up: Wired and wireless Internet radio vs. terrestrial radio, the ways music stations sometimes get deluded by (phantom) Internet listening, how easy it is to get side-tracked by the Internet and how some music stations just don't stream at all.

A (music) station which bases its Internet platform on the iPhone and the latest wireless gimmickry may be making a mistake at the expense of its over the air product. Sure, the iPhone and just about everything introduced by Apple are the latest, hottest thing and the apps are the rage. But just how many people have an iPhone and use it to listen to radio? From my (provincial) observation, iPhones and Blackberries are used for texting, file transfer, business, video and Internet immediacy. Additionally, consider the expense of the iPhone + the monthly charges for AT&T broadband. What are the bandwidth limitations when one or two (or more) apps are running?

As to listening on line at the office cubicle farm, how many companies restrict Internet access to rdaio station streaming and sites like You Tube because they suck up bandwidth and interfere with business?

Talk radio, including NPR and their local affiliates, would seem to have a better shot at providing a product that appeals to Internet radio listeners that haven't been blocked from access. News-talk is more issue-oriented and unique to a region than are most FM music stations; for example, a Lite Rock FM in Chicago playing 300 songs probably doesn't sound that much different than the Lite Rock FM in Rochester. If the music stations are voice-tracking or relying on pre-produced bumpers, aside from the once an hour weather forecast, what's the difference? Conversely, WHAM and WBEN (Rush and Hannity excluded) will very likely be talking about issues that are different than what's being discussed on WLS or WGN.

From this lay person's perspective, it seems the US Court of Appeals ruling may put a damper on Internet radio access. Does today's decision give terrestrial radio some breathing room or advantage? And would anybody be surprised to see this ruling appealed?

 

[Silkie]

Maybe a damper was put on the FCC consolidating ISPs so that people don't know who is who or which is which? Just sayin'.

The issue was one of "net neutrality". In its simplest form the question might be better asked whether Comcast or any other ISP should allow a competitor to compete with the ISP within that particular ISP. Would you permit a business competitor to freely use your office space to compete against you? If people were sharing the file folders and used up your whole office, so that you could not work, would you want to prioritize that? The last administration started it, and this administration was following through with it. Would you let a man who is competing for your wife compete for her within your home? Especially all sprawled out on your sofa, at your table, in your bed? With his two trucks in your garage, so that you had to park on the street?

The FCC rule would have pretty much made it so that there is no competition on the Internet, but that all companies would be one great big, government run and controlled Internet Service Provider, at least the way I read it.

 

[OttoM]

A (music) station which bases its Internet platform on the iPhone and the latest wireless gimmickry may be making a mistake at the expense of its over the air product. Sure, the iPhone and just about everything introduced by Apple are the latest, hottest thing and the apps are the rage. But just how many people have an iPhone and use it to listen to radio?

A lot more than you'd think.

There's several Internet radio apps available at the App Store including iHeartRadio (from Clear Channel). My personal favorite is VU Radio - a streaming player that has (imagine this) analog meters. And I can listen to my 32k stream running out of my home anywhere I want on the iPhone.

From my (provincial) observation, iPhones and Blackberries are used for texting, file transfer, business, video and Internet immediacy. Additionally, consider the expense of the iPhone + the monthly charges for AT&T broadband. What are the bandwidth limitations when one or two (or more) apps are running?

Depends on the carrier and the network, but the limitations are negligible when it comes to streaming & simultaneously texting/e-mailing/Facebooking/Twittering.

 

[aaronread]

Streaming is an important complement to any radio station, but keep things in perspective:

1. The national bandwidth available on a mobile basis is not even a fraction of a percent of what is necessary to even compete with terrestrial radio...much less duplicate it. This will change over time, but it's still many years away due to the needed infrastructure improvements.

2. On average, WEOS has anywhere from 1500 to 5000 listeners in the Ithaca market (and that's just measuring the Ithaca market) during the day. We usually launch about 50 to 75 stream requests per day. While I'd prefer to have both, if I had to shut of my stream it'd hurt a heckuva lot less than having to shut off my transmitter!

 

[JustPastBuffalo]

The comments here and the many submitted after the story at Yahoo offer a wide array of reaction.

Comcast understandably went to court to protect its own turf and pipeline which is only so large and can accomodate only so many bits and bites before it becomes clogged and overwhelmed.

However, Comcast, Verizon, Time Warner, et al shouldn't be compared to the Little Sisters Of The Poor. This decision can be understood from the perspective of each party when the issues are examined.

Still, I wonder if and how the Court's decision might affect local terrestrial radio. AaronRead's post offers a public broadcaster's perspective and it's similar to that which was offered by my commercial broadcasting friend during our lunch discussion.

 

[Bob1370]

If companies like Comcast, or other cable firms which dominate various regions of the country, behave the way many oligopolies or functional monopolies do, they will start to try to use their control of regional access to broadband Web service to control who gets to play in that arena--perhaps demanding carriage charges from some popular websites they think can afford it (like Google or Yahoo, or popular newspaper websites) or simply blocking sites they don't like on commercial, competitive or even political grounds. Or both. Either way the customer loses.

They say now that they won't do that. But we all know the danger in relying on any company when it says, "trust me."

Don't laugh, the Chinese and the Iranians are blocking access to any number of sites whose content they don't like, the technology to do it is there, and it wouldn't shock me to see a company abuse its power the same way abusive governments do.

In that case, it'll be good news for still-free broadcast radio, which will then offer more choice at no cost above the price of the receiver. And perhaps good news for the remaining dial-up or DSL providers who compete with cable-originated broadband service. They may not offer the speed of broadband, but their competitive survival could hinge on the fact that they could soon be your only remaining choice for unlimited, uncensored editorial content variety.

 

[aaronread]

From this lay person's perspective, it seems the US Court of Appeals ruling may put a damper on Internet radio access. Does today's decision give terrestrial radio some breathing room or advantage?

Not at all. All it does is make it easier for Comcast to push its own internet radio offerings to the exclusion of others; not unlike how cable operators used to rebroadcast local radio on their networks but stopped when the "digital music channels" started appearing a few years ago. If anything, this is BAD news for terrestrial radio as it allows giant conglomerates, like Comcast, to feel freer in pursuing such a strategy because they'll know they can quash any competition. So instead of a lot of little webcasters nibbling at radio's audience, you'll have one or two big, well-financed, well-organized webcasters trying to take a giant bite out of radio's audience.

And would anybody be surprised to see this ruling appealed?

I sure as hell hope so. But in all seriousness, yes - you will see it appealed. Either in the courts or in Congress; I think this administration is serious about having a national broadband plan and that plan means having the FCC in charge of it...for better or for worse.

 

[listener-in]

It seems we've read this script before. Whenever some new technology comes along, vested interests try to fight it, restrict it, or direct it to their own ends, but it alway prevails in the end - public demand sees to that.

It may happen through the FCC ruling to redefine their common carrier status, legislation breaking up provider monopolies/oligopolies, pressure for the kind of broadband capacity available abroad, or some combination thereof, but it will happen. All kinds of individual and business users have too much to lose for it not to.

 

[SirRoxalot]

Let's not go off the deep end here, folks. First of all, an audio stream is small potatos (potatoes?) compared to to a video stream. Secondly, the court didn't defeat net neutrality. The court stated that the FCC can't unilaterally require net neutrality without authorization from Congress. This is a new technology that the FCC either grabbed, or had dumped into its lap. They don't even have a well-defined set of rules for managing streaming at this point.

Comcast (and other ISPs) have a legitimate gripe. The morons in SoCal (most college students) had set up servers on Comcast to download pirated movies from Chinese sites, then freely redistribute them. The bandwidth required far exceeded typical use, and most Internet service agreements prohibit users from setting up servers without paying extra costs. The real question is the definition of a "server", and whether "file-sharing" services turn network nodes into "servers".

Most commercial Internet customers pay the additional price for hosting servers. It would be hard for Comcast, or anybody else, to restrict access to those servers. The ISPs may demand higher rates for higher traffic. That's a scenario that I'd expect to prevail. Rates are very competitive, and radio is unlikely to find additional server costs a significant burden for its piddly audio streaming.

 

[rdcuffpa1]

From this lay person's perspective, it seems the US Court of Appeals ruling may put a damper on Internet radio access. Does today's decision give terrestrial radio some breathing room or advantage?

Not at all. All it does is make it easier for Comcast to push its own internet radio offerings to the exclusion of others; not unlike how cable operators used to rebroadcast local radio on their networks but stopped when the "digital music channels" started appearing a few years ago. If anything, this is BAD news for terrestrial radio as it allows giant conglomerates, like Comcast, to feel freer in pursuing such a strategy because they'll know they can quash any competition. So instead of a lot of little webcasters nibbling at radio's audience, you'll have one or two big, well-financed, well-organized webcasters trying to take a giant bite out of radio's audience.

The issue is likely more salient for streaming video vs. streaming audio. Video consumes much greater bandwidth. Part of the dynamics of broadband Internet usage is that a small number of users consume an inordinate amount of bandwidth, and part of the motivation is to reduce the very-high-volume users. BitTorrent users -- the particular target of Comcast's ire -- drive much of that traffic.

I've always wondered if it is very difficult to compare a typical radio listener with a radio "streamer" when it comes to ratings points. Seems to me that a radio listener is likely more passive than a web stream listener...and a more active listener would be more appealing to advertisers.

As to Mr. Pastrick's musing regarding how much radio is "consumed" via mobile devices, you'd be surprised, particularly at the behavior of the sub-30 crowd. Folks like that have even given up wristwatches because they glance at their smartphone when they want to know the time of day.

As to the cost, many of these same young folks have unlimited data plans in their cellphone arrangements -- they're not paying by the kilobytes transferred.

Richard in Allentown, PA

(formerly of East Aurora back in the day...)

 

[TheBigA]

I could be wrong about this, but I haven't noticed ISPs getting into the content business. All that will change when Comcast buys NBC Universal, but they have bigger fish to fry than just radio. They're going to be pushing video content first and foremost. So radio isn't really part of the equation.

I posted a story on this in the FCC Policy board, with reference to this blog in the New York Times.

http://www.nytimes.com/2010/04/07/technology/07net.html?src=me&ref=homepage

My question to all the free marketeers is if Sprint or AT&T or Comcast paid for the broadband, shouldn't they get something for their investment? If I build a tower for my radio station, and other owners want space on my tower, I might rent to them. But I want the best spot on that tower.

High speed internet was not built by the government. It is not the public airwaves. It was built by private capital. This isn't about censorship of content. The content is available to everyone. It's about convenience and speed, and typically those things are luxuries that people pay extra for. All cars aren't equal, all radio stations aren't equal, and all internet servers aren't equal.

As the Times blog points out, this creates a bit of a problem for liberals and conservatives in Congress, who are split on the role of government in these kinds of things. But at the end of the day, if Congress gives the power of regulating the internet to the FCC, they will use it to forward their agenda of making broadband available to all. And that's not necessarily good for radio.

 

[FreddyE1977]

I would not get too excited.

The Obama Administration wants this REAL BAD, and the Court's ruling was based
on the FCC's authority given by Congress in existing law, not on the Constitution.
Therefore Nancy Pelosi and Company can easily overturn this by writing a law that
specifically gives this authority to the FCC. To avoid this you would have to hope
that all 41 Republicans in the Senate stick together like glue.

 

[JustPastBuffalo]

The participation and opinions expressed in this thread thus far offer keen insight to the issue, especially the clarifications as to the application of the ruling with regard to servers and streaming video v. audio, torrent sites and re-distribution. Nicely distilled, contributors. Hopefully, the thread doesn't venture too deeply or vehemently into the political fray, lest it be cast into message board hell, aka Take It Outside.

A particularly interesting point from the original Associated Press report:

"The cable company (Comcast) had also argued the FCC lacks authority to mandate net neutrality because it had deregulated broadband under the Bush administration, a decision upheld by the Supreme Court in 2005.

The FCC now defines broadband as a lightly regulated information service. That means it is not subject to the "common carrier" obligations that make traditional telecommunications services share their networks with competitors and treat all traffic equally. But the FCC maintains that existing law gives it authority to set rules for information services.

Tuesday's court decision rejected that reasoning, concluding that Congress has not given the FCC "untrammeled freedom" to regulate without explicit legal authority."

As to Mr. Pastrick's musing regarding how much radio is "consumed" via mobile devices, you'd be surprised, particularly at the behavior of the sub-30 crowd. Folks like that have even given up wristwatches because they glance at their smartphone when they want to know the time of day. As to the cost, many of these same young folks have unlimited data plans in their cellphone arrangements -- they're not paying by the kilobytes transferred.

Very true. I have two adult sons and regularly observe this. The way they "don't use" or "abuse" radio is eye-opening. BTW, this boomer hasn't worn a wristwatch in more than a year. Much as I love and continue to listen to radio, I've been giving my SanDisk mp3 player a workout. Like my (Verizon) cell phone, it offers a calendar/time/date readout.

 

[TheBigA]

The FCC now defines broadband as a lightly regulated information service. That means it is not subject to the "common carrier" obligations that make traditional telecommunications services share their networks with competitors and treat all traffic equally. But the FCC maintains that existing law gives it authority to set rules for information services.

That's a good quote, because the FCC is trying to use its authority with common carriers to allow it jurisdiction over the internet, which would be a contradiction.

This plays a part in cable regulation as well, because companies like Comcast are seeking the ability to promote their owned channels, and block outside program suppliers (particularly sports), from their network. Which is, in a way, what they're doing on the internet.

 

[listener-in]

This plays a part in cable regulation as well, because companies like Comcast are seeking the ability to promote their owned channels, and block outside program suppliers (particularly sports), from their network. Which is, in a way, what they're doing on the internet.

Which is exactly why we need stringent common carrier rules and breakup of local monopolies.

 

[Bob1370]

"This plays a part in cable regulation as well, because companies like Comcast are seeking the ability to promote their owned channels, and block outside program suppliers (particularly sports), from their network. Which is, in a way, what they're doing on the internet."

Try that and Comcast is looking at a big, fat anti-trust lawsuit with some big-league civil and perhaps criminal penalties...not to mention, kissing the licenses to every NBC O&O station across the country good-bye.

They might be arrogant and crazy enough to try it, but do you really think Comcast's lawyers would let them be that stupid?

Well, maybe...

 

[TheBigA]

Try that and Comcast is looking at a big, fat anti-trust lawsuit with some big-league civil and perhaps criminal penalties..

Do a search on Mid-Atlantic Sports Network (MASN) and it's history with Comcast and Time Warner. That's just one example.

 

[FreddyE1977]

Try that and Comcast is looking at a big, fat anti-trust lawsuit with some big-league civil and perhaps criminal penalties..

Do a search on Mid-Atlantic Sports Network (MASN) and it's history with Comcast and Time Warner. That's just one example.

I think that is the key reason why Comcast dropped their battle with DirecTV over
Versus and CSN Philly. It was about to come to a head as an antitrust issue as
they try to take the reins at NBC.

 

[SirRoxalot]

There's a fundamental difference between the Internet and cable TV operation. Cable TV has a limited number of channels. The Internet is virtually limitless in the number of websites that can exist, and the number of servers that can be hosted.

As a common carrier, an ISP is nearly exempt from monitoring content. IF a complaint is received about ILLEGAL content, they are obligated to investigate and take action. They are not required to monitor or seek out illegal content.

Cable systems are required to monitor content, and prevent illegal content from being carried on their systems. They exercise considerably more control over content - even if they don't create the content - than an ISP.

ISPs REALLY don't want to get into the content control business. What they DO want to get into charging differently for the amount of bandwidth that different users utilize. From a common carrier standpoint, "bits is bits - we don't care how many you move, but we want more money for more bits".

The crux of the Comcast decision was not about content, but about volume. Comcast originally had no limits on the amount of data you could move as a customer of their system. They detected what they considered to be abuse, and throttled some users down or dropped links without warning. The court decided that they didn't have the right to do that under the existing contract.

The simple answer for Comcast was to revise user contracts to charge "heavy" users more money for bandwidth usage. Time-Warner recently tried the same thing in Rochester. That's likely to be the model that will eventually prevail.

 

[TheBigA]

ISPs REALLY don't want to get into the content control business. What they DO want to get into charging differently for the amount of bandwidth that different users utilize.

Well, maybe yes or no.

The copyright owners want to put ISPs in the content control business. They want to hold ISPs responsible when content is illegally downloaded. They want ISPs to charge their customers for usage of copyrighted content. So there is a movement afoot from record labels, movie companies, and even news providers that would change the role of ISPs. And the ISPs are fighting that.

Which is why I say the government has a contradictory opinion here.