As it waits for the regulatory shoe of net neutrality to drop next month, the cable industry is going on the offensive.
Lobbyists are taking preemptive aim at other Internet rules that might come down from the government soon. And meanwhile, Cablevision has become the first cable company to act in a wider battle over the future of phone calls. If the industry gets its way, it'll enjoy tremendous advantages when it comes to the economics of the Internet. Here's how.
Arguing against new federal broadband standards.
Let's look first at the lobbying push. On Friday, the National Cable and Telecommunications Association said it opposes the government's attempt to define a new standard for broadband speeds. Regulators have said they want to raise the minimum download speed for broadband from 4 Mbps to 25 Mbps, a decision that would suddenly make it look as though 17 percent of Americans don't have high-speed Internet.
The Federal Communications Commission justifies the proposal by saying that today's Internet applications, such as Netflix, make faster broadband a must. The accounting change would give the FCC a stronger argument to intervene with policies that promote the Internet. So it's no surprise that NCTA is asking the FCC to slow down; it doesn't want to give the FCC a reason to impose more requirements and regulations.
"Adopting a 25 Mbps/3 Mbps threshold for broadband would not be supportable as a factual or legal matter," the association wrote in a filing to the FCC.
Resisting regulation of the middle-mile Internet.
There are really two parts of the Internet that could be affected by the FCC's net neutrality rules. One is the last-mile Internet — basically, the pipes that your Internet provider operates to bring traffic from elsewhere to your devices. Then there's the middle-mile Internet, the part of the Web tasked with bringing traffic to your provider's doorstep.
The net neutrality debate is mostly about the last mile. But anticipating that the FCC's net neutrality rules could also address this other part of the Web, Comcast is telling the FCC that regulating the middle-mile Internet is a terrible idea.
"Internet traffic exchange presents distinct issues and considerations that are not part of the open Internet debate," Comcast wrote in its filing, arguing that the middle-mile Internet is a competitive marketplace with a lot of providers that doesn't need greater oversight.
How this debate plays out could determine which companies foot the bill for exchanging traffic — and if it's a shared arrangement, what the balance looks like. And that could have consequences for what you, the consumer, see on your bills.
A new way to make phone calls.
Cablevision announced Monday that it's launching a service called Freewheel, a $30-a-month cellular plan that uses only Wi-Fi to make calls. In addition to your home WiFi router, Freewheel phones (the company uses the Motorola Moto G) will connect to Cablevision's 1.1 million hotspots around the mid-Atlantic and Northeast. But unlike typical cellphones, you won't be able to call anyone when you're not connected to WiFi.
For some who don't move around a lot, this might be a worthwhile tradeoff. More important, it heralds a wider push by cable into the wireless business. If WiFi calling takes off as a technology, it'll change whom you pay for connectivity. Analysts predict that WiFi calling poses a substantial threat to the likes of T-Mobile, Verizon, AT&T and Sprint, and could further an ongoing race to the bottom for wireless prices.
"The wireless business is in a tough spot (dare we say, deflating faster than a football in New England?)," analyst Craig Moffett wrote in a research note Monday.