Well, rumors are that the two companies would like to try it again, except this time they think they have fuel to light the fire. XM and Sirius were allowed to merge recently, creating a single company out of the two satellite radio providers. So they can ask the Feds, ‘what’s the difference?’ Two satellite radio providers with no other satellite competition, or two satellite tv providers with no other satellite competition? Same difference, right?

Well, we don’t know whether the Feds will simply draw upon their reasons for refusal the last time and say nothing has changed or give this an honest appraisal. Looks like the companies have a pretty valid point…what is the real difference? The radio companies have plenty of competition still out there, just not from satellite feeds. The tv companies are the same way, plenty of competition from cable, just none from satellite.

They might as well merge, the consumer will probably be no worse off. It’s kind of like the gas pumps. All the stations in town seem to change their prices just minutes apart, collusion some say. TV rates don’t get too far apart as the firms seem to vie for dominance over  ‘features’ rather than price, so they sustain each other by not getting into pricing wars.

Let ‘em merge. It’s usually the case that if a company gets too heavy-handed with its pricing scheme, someone else will come along and take the customers away.

Cablevision had one court block their attempt to provide a unique DVR service after being sued by Disney, Time Warner, and others. However, an appeals court has sided with them in overturning the earlier court ruling that had blocked them from offering a network-based DVR service.

Arguments from the movie and TV industry have been that it infringes on their copyrights.

But the Second Circuit Court of Appeals in New York, ruled that Cablevision’s proposed new service that allows movies and TV shows to be recorded on remote storage servers in Cablevision’s network “would not directly infringe plaintiffs’ exclusive rights to reproduce and publicly perform their copyrighted works.”

The ruling could have a major impact on new services that cable and other video providers can offer, and it could help reduce the price of DVR services.

Up until now, video providers have offered DVR services that allow people to record, store, and play back movies and TV shows on their set top boxes. Everybody is familiar with that but Cablevision’s Remote Storage DVR or RS-DVR service would allow people to have all the same functionality they have with their current DVRs, but it doesn’t require them to have a special box to do it. Instead, all the recording is in Cablevision’s network rather than on a box sitting in the subscriber’s home.

By putting the functionality in the network, Cablevision could reduce the cost of offering the service. Believe it or not, cable operators say they spend about 10 percent of their capital investment providing DVR boxes to customers. If Cablevision can reduce its cost, it could offer the service at a lower price, which in turn could appeal to a lot more subscribers. It also means they can roll out the service to new subscribers much more quickly.

One other benefit from the consumer side is this might also allow people to get rid of their set-top boxes altogether. And since the DVR function is housed in Cablevision’s network instead of at home, consumers won’t have to deal with housing a relatively complex piece of networking equipment in their homes.

Comcast also uses something they call PowerBoost, where customers can see their download speeds increase during periods of little traffic. At PowerBoost speeds, the download speed will jump to 12 Mbps and 16 Mbps respectively.

Comcast also noted that the company is currently runnning trials on a 50 Mbps service in Minneapolis-St. Paul, with hopes to bring 100 Mbps and even 150 Mbps services to customers in the future.

Now all of this becomes especially newsworthy in light of the recent uproar over Comcast throttling certain users’ download speeds and access. So their intention is to ’shape network traffic’ on the download side but open up to faster speeds on the upload side? And then Powerboost the downloads to new record speeds? Strange…you’re messing up our network by using the bandwidth so we’re going to give you more. Sounds a lot like bait, doesn’t it? Especially in light of the moves being taken or threatened by their cohorts.

Time-Warner is already testing the waters on excess usage fees and AT&T has recently hinted at doing the same. They will probably follow suit with Comcast in finding some way to regulate the network downward and the rates upward.

Not much of this should be a surprise. Bottom line is higher rates, guaranteed. They will continue to follow the path of customer tomfoolery. Just like the satellite TV folks do. Every year, DishTV sends out an ‘important message to our customers.’ Congratulations, we’re adding 8 more useless channels to your package at no additional cost to you. This is in part to compensate you because we’re having to raise your rates.

So on the data side, it’s something like ‘we’re going to give you 10Mbps service but if you use it, we’re going to cut you back to 4 or else you can choose to use the 10 and pay per gigabyte in excess of xxGB per month.’ And we’re doing it all for you, our loyal customers.

The top 5 percent of AT&T’s DSL customers use 46 percent of the total bandwidth, according to a company spokesman.

Overall bandwidth use on the network is surging, doubling every year and a half. But I recently wrote that is what should be done – the bandwidth should be used and technology should provide more. What would have happened if the 286 or 386 computer developers (Intel, specifically) had said we’re not going to make any faster chips available? What if they had said a small percent of users are the ones using the most so we’re stopping all that right here? What kind of computer would you have today?

So AT&T is going ahead with plans to increase network speeds and at the same time saying there’s too much bandwidth being used so they’re going to surcharge it. Isn’t the purpose of increasing speed to increase bandwidth usage?

All of this then simply comes down to the plan of how do we raise rates next? Except this time, they are singling out blocks of users – the ones that are driving them to new technology. When we all reach the level of complacency, they will then be able to collect their fees with no need to improve their technology.

Most cable companies have official or secret caps on the amount of data they allow subscribers to download every month. Time Warner Cable started a trial earlier this month in Beaumont, Texas, under which it will charge subscribers who go over their monthly bandwidth cap $1 per gigabyte.

Cable companies are at the forefront of usage-based pricing because neighbors share capacity on the local cable lines, and bandwidth hogs can slow down traffic for others. Phone companies have been less concerned about congestion because the phone lines they use to provide Internet service using DSL aren’t shared between neighbors.

Download caps could put a crimp in the plans of services like Apple’s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix just launched a TV set-top box that receives an unlimited stream of Internet video to a TV set for as little as $8.99 per month. If they were delivering DVD quality movies, those today (if you disregard Blu-Ray), fit on a DL DVD which holds almost 9 gigabytes. I can guarantee you nobody is going to pay for a movie and then pay 9 dollars more to their ISP to watch it.

So on the basis of the Time Warner plan, and possibly AT&T’s also, depending on how much they charge, those companies have become guilty of using their position to put other companies out of business, stifling possible competition. This would work something like an embargo tax except in this case it would be a blockade.

Regulator time…..

The entire model lies in stark contrast to the competitive markets set up in many countries, and it’s going to hurt innovation in the U.S. Many new startups, particularly those focused on video and online gaming, depend on their customers having access to high bandwidth, with no limits on their connections.

Cable companies have regional monopolies and are able to extract excess profits from these monopolies. Innovation and the health of the infrastructure is dependent on a competitive marketplace. If one part of the market falls behind (and we’re already behind in broadband penetration and average data speeds), it becomes very difficult to remain competitive.

I’m almost never in favor of government intervention, but monopolies are an exception. We need to encourage data usage by users, not the opposite. Here’s yet another problem to go along with the lack of broadband availability in many areas that needs to be solved…and not ten years from now.