Broadband Cable Association of Pennsylvania


April 21, 2014

At the April meeting of the Waymart Borough (Wayne Co.) Council, Laurel Highland provided an update about their progress in the borough since acquiring South Canaan Telephone Company in November.

Laurel Highland is a rural telephone company based in southwestern Pennsylvania, "with many similarities to South Canaan." The company has been around for more than 100 years, almost as long as South Canaan Telephone Company was. "Phone, television and Internet services are the core of our business, just like South Canaan," Smith said. “Laurel Highland offers state of the art fiber optic technology to 100 percent of our customers."

Currently, Laurel Highland's TV is 60 percent digital. Smith said by the end of 2014, services will be 90 percent digital and in 2015 it will be 100 percent digital. There will also be 85 high definition channels and a total of 230 channels. He said they also offer Internet speeds up to 30mg. "Laurel Highland's goal is to offer phone, Internet and TV technology on a par with any city in the country," Smith previously stated. "What we have done in our rural communities in southwestern PA we intend to do here in northeastern PA. “We are in the process of evaluating South Canaan's Internet and TV offerings and can't provide any timetables yet." He said that South Canaan Telephone and Waymart's success is "tied together" and added he hopes to partner with the borough in the future.

During the meeting Smith updated council on the activities Laurel Highland has done so far. They include: building a state of the art broadband infrastructure which will enhance internet for both homes and businesses in the area; completed the connection to the internet through ION fiber network; hiring of two local Johnson College graduates to assist with the fiber build.

Smith also provided some goals Laurel Highland has for the future. They include: to build a communications infrastructure to help attract and keep businesses and residential customers here in the area; provide good paying jobs with health and retirement benefits; participate in community events, support local organizations and provide scholarships.

Council President Lilian Rollison thanked Smith for the update. She also noted that the borough and the South Canaan Telephone Company have a long standing relationship and the company has always assisted the Waymart Area Parties in the Park (WAAP) whenever requested. Rollison and councilwoman Jane Varcoe both stated the borough looks forward to working with Laurel Highland and welcomed them to the area. Wayne Independent (Honesdale, Wayne Co.)

Wi-Fi's signal may be getting stronger. That is seemingly Comcast's dream—and one that may be shared by Sprint. As Comcast seeks regulatory approval to buy Time Warner Cable, the cable giant has been raising the idea of a wireless phone service using Wi-Fi hot spots for most of its voice and data traffic. Users would move onto a traditional wireless network only when Wi-Fi isn't available. Comcast has about a million hot spots deployed. But it says that without Time Warner Cable, it will be trickier to create a national competitor to existing wireless carriers.

This may seem like pandering to regulators aiming for more competition in wireless. Skeptics say the same about Sprint Chairman Masayoshi Son's recent touting of the reverse scenario—a wireless competitor to fixed-line broadband—as he may be attempting to woo regulators ahead of a potential bid for T-Mobile US. But, as with Sprint's plans, there are reasons to think Comcast is for real.

The economics work. That sets Comcast apart from Sprint, which faces an uphill battle making wireless broadband financially viable. Yet Sprint may end up benefiting if regulators take Comcast seriously: If cable can produce a national wireless carrier, opposition to any Sprint purchase of T-Mobile might soften. Comcast started building its Wi-Fi network four years ago. Subscribers can use this wherever it exists, relieving pressure on their monthly wireless-data caps. Comcast has expanded the network by, for example, adding public hot spots.

Because Comcast already has the wires and authorizations in place, it costs little to add new hot spots. And a gigabyte of wireline data costs less than one-seventh the price of a gigabyte of wireless data. So cable could potentially undercut traditional carriers. Priced at a 25% discount to current wireless offerings, cable providers could still make margins of earnings before interest, taxes, depreciation and amortization of 31%, according to New Street Research. It estimates cable firms could get 20% of their subscriber base onto wireless within five years.

Many other pieces for a national Wi-Fi phone service exist already. Comcast and other cable firms have an agreement with Verizon Communications to use its network for a wireless service. Comcast also has a deal with Clearwire, now part of Sprint. And an alliance with other cable firms, including Cablevision and Time Warner Cable, allows its customers to use those operators' Wi-Fi and vice versa. According to Mobidia, 63.4% of U.S. smartphone data traffic already travels via Wi-Fi. That should only expand with additional hot spots.

There are still technical hurdles to ensuring seamless handoffs between Wi-Fi and traditional wireless networks. And Comcast customers must sign in again when moving to another operator's network. But carriers such as Republic Wireless, which already uses Wi-Fi for 90% of its data traffic, have been perfecting handoff technology, and the industry seems to be moving toward lower hurdles to Wi-Fi access. Bigger obstacles may include getting handset makers to agree to make devices with the necessary specifications for a Wi-Fi-based network and Comcast's own appetite for going head-to-head with incumbents including Verizon and AT&T.

For Sprint, having Comcast as a low-price wireless competitor would also ultimately make life more difficult. But the idea of Comcast as a potential rival could help persuade regulators that wireless will remain competitive even if T-Mobile is taken over. The government has been unusually outspoken in its opposition to such a deal. And Wi-Fi may be only a factor in its decision, with the long-term financial health of Sprint and T-Mobile likely being a bigger concern, according to Guggenheim Partners. But both Comcast and Sprint have reason to hope regulators agree that everything they think they know about wireless is about to be thrown into the air. Wall Street Journal

On Tuesday, the Supreme Court will hear arguments in American Broadcasting Companies v. Aereo, arguably the most important media case in years. Aereo is a two-year-old company that picks up television signals and sends them to the Internet-connected devices of Aereo subscribers, all without permission from or payment to the broadcasters who provide the programming. In copyright parlance, such use of broadcast signals is called unlicensed public performance. In plain English, it's piracy.

Major broadcast networks ABC, CBS, NBC and Fox have sued Aereo, noting that Congress specifically prohibited this sort of behavior in the 1976 Copyright Act, which states that it is a breach of copyright "to transmit or otherwise communicate a performance or display of the work" to the public on any device by any process. But Aereo, arguing that it is exempt from copyright law, rests its entire legal theory on one widely criticized decision: the Second Circuit Court of Appeals' 2008 ruling in Cartoon Network v. Cablevision.

That case arose when Cablevision developed remote-storage digital video recording in 2006, allowing customers to record shows and watch them later. But unlike other DVR systems, the Cablevision concept stored programming on servers at company facilities, not in a box under the television, and so the content was retransmitted to consumers. Cartoon Network and other programmers sued, claiming that such transmissions constituted unlawful "public performances." The court looked for a way to allow such a seemingly innocuous technical change, as programmers were still paid and consumers did not suffer. The court ultimately concluded that a recording transmitted to a single subscriber was not a "public performance," even if thousands or millions actually watched the same program through such transmissions.

Cablevision validates the adage that hard cases make bad law. After the Cablevision ruling, Aereo built an elaborate system that exploited this seeming wrinkle in the law. The resulting litigation has wound up in the same court that decided the Cablevision case. The circumstance, however, is different: Cablevision pays negotiated license fees to the programmers, while Aereo simply plucks broadcast signals off the air. But so far Aereo's strategy has worked. The company won a 2-1 decision in the Second Circuit. In his dissenting opinion, Judge Denny Chin called Aereo's system "a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law." The decision has been widely criticized. The American Intellectual Property Law Association, the Washington Legal Foundation and the U.S. Solicitor General (joined by the U.S. Copyright Office) have all filed briefs supporting the broadcasters.

Apparently worried about losing at the Supreme Court, Aereo now argues that a ruling against the company threatens to outlaw cloud computing, the technology that helps Aereo deliver its "service." The Solicitor General addressed this alarmism in the administration's amicus brief. Cloud-computing services "offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired," the brief notes, while Aereo's service "performs a wholly different function." The Solicitor General concludes there is "no sound reason" to suppose that a decision against Aereo would threaten cloud computing. Aereo's public-relations campaign skips over troubling legal questions and simply portrays broadcasters as greedy enemies of innovation demanding excessive retransmission fees. Aereo argues that because consumers are entitled to receive over-the-air broadcasts free, broadcasters should not be able to charge Aereo.

But Aereo's own consumers—like those of the cable and satellite companies that also complain about having to pay for broadcast programming—don't receive broadcast retransmissions free. Aereo customers pay a subscription fee. Even more ironically, Aereo's $8 monthly per-customer charge far exceeds what cable and satellite providers pay to broadcasters in retransmissions fees. Yet broadcasters are called price-gougers while Aereo poses as a champion of the consumer. In reality, broadcasters still provide a free service to consumers, and they are the only television distributors that do. Aereo profits from selling copyrighted content the company does not own.

The outcome could determine the future of the television industry. High-quality television can no longer be supported exclusively by advertising, as broadcasters now must compete with highly profitable pay networks. As revenues decline, broadcasters cannot afford to subsidize competing platforms like cable, satellite and Aereo, while still providing free high-quality programming to those unwilling or unable to pay. How would a ruling for Aereo damage the television market? It's hard to know exactly. But the NFL and Major League Baseball warn in an amicus brief that a ruling in favor of Aereo could steer sports and other popular programming away from broadcasting. At least one major broadcast network has threatened to convert to a subscription service rather than permit piracy. Perhaps broadcasters would find other creative or less radical ways to adapt.

The Supreme Court's job, though, is not to decide what the television business will look like in five years. The question before the court is whether a company "publicly performs" a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers. That's a straightforward question with only one common-sense answer. Wall Street Journal