Two stories of interest this week.

The first story is about the FCC's decision to open the so called "white space" spectrum, to allow for new wireless services. This is good news for those hoping for more competition in the broadband market, and has been long anticipated by companies such as Google, Dell, and other companies. The decision wasn't without caveats. For instance, since wireless mics use the same spectrum, in larger cities, white space broadcast services cannot be located near stadiums or theaters.

This is about the only positive glimmer of news to those of us who also heard this week that AT&T is now testing broadband caps in the Reno, Nevada market. Broadband caps which will, most likely, be rolled out to the rest of the country early next year.

The caps are aggressive, too. For instance, Comcast set its cap at 250GB, but AT&T is looking at only 20GB for its lowest subscriber plan, and 80GB for its highest vanilla DSL account. You only get the 150GB cap the company mentions most frequently in the press releases, bundled in with the company's Uverse services.

How will this impact on services such as Netflix's WatchNow, which has also been so much in the news, recently? Especially with the new Netflix WatchNow HD offerings on XBox 360 and Tivo?

Netflix has stated that the broadband requirement for HD when using XBox is high—too high with these caps. Roku earlier stated that it wasn't worried about caps but that was back when we were discussing Comcast's 250GB limit, not the much smaller AT&T limits. Even with Roku's efficient techniques, we're looking at 1GB per hour for standard definition, probably 2-3GB for HD. This works out to about 1-2 hours of programming a night before hitting the broadband cap with AT&T, and that's not including other internet usage.

The caps AT&T are setting are so aggressive, that the lower end accounts will have to be wary of even accessing sites that automatically run a lot of video. They'll certainly want to pause before uploading a lot of photos, because uploads also figure into the broadband cap.

AT&T's move is the first on the part of a DSL provider, but probably won't be the last. It is a move that now ensures that entire markets have little or no choice when it comes to capped broadband access. Most people using AT&T are probably now wishing they lived in a Comcast region, because Comcast's caps at least give one a fighting chance at video over the internet.

A few major players haven't put caps on yet, including Verizon. However, it is only a matter of time before it, too, begins to cap. All of the major broadband providers provide entertainment services that directly compete with video over the internet—they're not going to allow this competition to occur without fighting it tooth, nail, and byte.

The news of AT&T's new caps is highly suspicious, coming on the tail of many new announcements about Hulu, Joost, and especially Netflix's WatchNow. AT&T's move can only be seen as saber rattling, in an attempt to foster uncertainty about broadband availability before the Christmas rush to buy Roku devices, or that new XBox 360. I don't know why AT&T doesn't just come out and say, don't waste your time on these boxes—the only option you have is UVerse. Why not give into the force?

About the only thing that can save video over the internet now, is if the companies who are dependent on the concept fight back at the broadband suppliers, or if new broadband options open up in the white space spectrum. Even then, I'm not sure that the newer players to the broadband market wouldn't begin already capped.

What do I plan on doing when I get hit with broadband caps? I plan on reading more. Access to books is the one thing the telecoms and entertainment companies can't restrict.

More:

• AT&T Starts Metered Billing Trial in Reno
• AT&T to test monthly cap on broadband uses
• AT&T plans broadband caps
• AT&T Trials Tiered Broadband in Nevada
• FCC approves "white space" for broadband

update

Roku has come out with a note on the Roku user forum about Netflix and HD quality:

• Roku will be delivering Netflix in HD by the end of the year
• Roku will be using Advanced Profile encodes which will deliver HD at substantially lower bit-rates than what Xbox is offering
• The number of titles is up to Netflix but the library will be the same as or larger than the Xbox library
• The UI will be updated to run in 720p and more covers will be visible on the screen at a time
• And the release will include another major new feature that you’ll have to wait a bit longer to learn about

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Though I was happy to hear that Netflix is finally rolling out HD content, I was astonished to read Netflix's decision to roll it out for the brand new XBox, rather than the existing Roku users. Evidently, Netflix considers the early Netflix box users to be second class citizens, and would rather put its focus on the newer, shinier customer—the XBox user.

I had been recommending Roku boxes as a Christmas gift idea, but I can't recommend the box any longer. Roku promised extra content, outside of Netflix, earlier thia summer, and has not delivered, yet. Roku also promised an SDK earlier this summer, and has not delivered it yet, either. Lastly, the company had promised that as soon as Netflix started streaming HD content, Roku would stream the HD content. As we can see, another promise undelivered, though this one does not seem to be Roku's fault.

Considering that Netflix is an investor in Roku, one has to wonder what the heck is going on between these companies. In the meantime, promises are going undelivered. Until we're given assurances that all of the earlier promises will be met, and that Netflix is still as committed to Roku users, as it is to every other box user, I can't recommend the Roku.

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Now, CNET is saying that everyone will get HD quality, but that the requirements are 8-10GB download speeds! (I'm assuming the author meant 8-10Mbps, not GB, but who knows...)

Netflix is calling this a "soft launch" since it is only rolling out such a small number of videos for HD streaming. The move mostly serves to stake a claim in the HD streaming market as opposed to being a full offering. Contrary to what others are reporting, HD streaming will be available on all streaming devices when it premieres with the New Xbox Experience. That means that the Roku, LG, and Samsung boxes will all be able to stream these HD movies, in addition to the Xbox 360. The PC and Mac based versions of Netflix, will not, however, be able to stream HD immediately. In addition, streaming in HD will require a large amount of bandwidth. Netflix estimates the requirement being in the 8-10 Gbps range.

Considering that 8-10Mbps exceeds the download speeds for a majority of broadband users, in addition to exceeding requirements for every other HD streaming server online, I have to wonder if this isn't an error.

This whole thing has been badly managed. Press release by rumor rarely works well.

Now that's the ticket...Apple has released its anticipated AppleTV update. I'm installing now, as I write this.

Among the changes are support for HD TV shows, of course, but also Genius playlists, as well as being able to put the machine into Standby mode using Settings, rather than having to hold and press the Play button. This is comparable with being able to put an iPod into Standby via a menu option rather than esoteric button/time combination.

Apple also added support for music videos. I have a couple, which I'll have to move over to the machine, see how they do.

Other than that, no, Steve Jobs did not have a heart attack. I can't believe how gullible the online world is, to accept the word of some anonymous commenter in a CNN any-hack-can-post site. Is "fact check" old fashioned? CNN's any-hack-can-post site states with pride that the material is Unedited. Unfilterd. News. I guess two our three is good enough for CNN.

Interesting, though, how tightly Apple shares are tied into Jobs. He needs to take a lesson from Bill Gates and work to ensure that the company does survive his death. Well, unless Jobs wants Apple to be like the Viking Queen and immolate itself on his funeral pyre.

Rumors abound this weekend that something is up with AppleTV. TUAW first wrote about the AppleTV signs coming down, and erroneously mentioned about machines being pulled. The site later made an update that the machines haven't been pulled, and conjecture in comments is that the signage change is because of one year licensing and old publication material. Still, another rumor mentioned a webcast related to the AppleTV on Tuesday. Comments in Gizmodo mention AppleTVs on clearance at Target, but that doesn't necessarily mean that Target is making way for new products.

There has been speculation for some time now on a new AppleTV that combines the old AppleTV streaming and direct purchasing capability, and features of the Mac Mini. Speculation runs the gamut from a new box with Blu-Ray, to a merge between the Mac Mini and the AppleTV with Blu-Ray thrown in. I think one thing we can safely say is that whatever happens to the future of AppleTV et al, it won't stream Netflix's WatchNow.

The rumor that most interested me, from MacBlogz, was that a software upgrade for AppleTV is in the works enabling direct purchase of HD TV shows through the machine. Now, you have to purchase the shows in iTunes on the computer and then transfer them to the machine.

I tried posting a note on these at the official AppleTV discussion forum. It was pulled in ten minutes and I received an email from Apple, slapping my hands and telling me not to post "rumors" and "speculation" in the forum. Considering that rumor and speculation form the heart and soul of Apple marketing, I would think the company would welcome increased exposure for both, but it would seem it likes to play coy within its own environments. Mustn't smudge the shellac.

I do find this latest round of Apple buzz to be less than endearing—necessary updates to hardware should not be handled within the same PR stream as new products or innovations.

Eureka is a popular science fiction show currently showing on the Sci-Fi channel, on Hulu, as well as downloadable from Unbox, and iTunes in beautiful, and expensive, HD. Now in its third year, the show was faced with an interesting challenge at the beginning of the season development: this season's shows will have a corporate sponsor. Not only will the show have a corporate sponsor, but the rule from high was that the creators were required to feature the product as part of the story line for one of the shows.

Last week's show, Here Come the Suns was the show, and needless to say, the fans aren't too happy.

Sensing a potentially explosive situation, the Eureka creators have embraced social media to an extent I've never seen with a television show. One of the writers has a personal weblog and talks candidly about the show (in addition to other topics). There's also a Eureka Facebook account, as well as Eureka Unscripted a Tumblr account focused on the show, the decisions that go into the show, and other items of interest to Eureka fans.

One of the recent entries at Eureka Unscripted discussed the product placement in Eureka, including the very unusual corporate direction that one show has to focus on the product—a move not seen since the says when variety shows were sponsored by health tonics.

It all began way back in October 2007 when the Sci Fi Channel announced to the Eureka staff that 1) we would have an official commercial sponsor this season, one that was kicking in a lot of dough and would therefore 2) require tons of product placement throughout Season Three. We were also told that 3) ONE EPISODE in Season Three would have to incorporate a storyline in which the actual product HAD to save Eureka somehow, or at the very least, be INDISPENSABLE to Carter’s Act 5 solve.

Oooooookay…

If you've not seen Here Come the Suns I won't give away either the plot or the product. The show should be appearing on Hulu in a couple of days.

Why such obviousness with product placement? Especially since an action like this is going to generate negative attention? One reason could be the new online publication models. When a product is integrated into a show, the product is going to show whether the show is televised on commercial TV, Hulu, or purchased as an episode through iTunes or Unbox.

Then again, production studios are having an increasingly difficult time making profits, what with viewers attention between grabbed by a plethora of entertainment possibilities. The days when you only had broadcast TV or a book are long gone, and so are the old advertising models.

Is this instance of product placement a sign of the future for shows? I hope not. Product placement can be quite discrete, and most people don't have too many problems with it. However, incorporating a product into a show's storyline crosses what used to be a pretty solid boundary and impacts on both the creativity and the integrity of the show. Fans feel betrayed, including those fans who spend $2.99 to purchase a supposedly ad-free episode of the show on iTunes, only to be served what could be seen as a theme-based infomercial.

However, the push-back would be more intense if it weren't for the Eureka team's use of social media, including the aforementioned Eureka Unscripted posting on the product placement. Now, instead of nameless, faceless executives screwing with a beloved show, we hear Erik who writes candidly on the issue, before announcing he and his wife have a new baby girl. It's more difficult to get angry with someone who you feel connected to, even if the connection is tenuous, and via the artificial intimacy that social media can foster.

There's also a sense that the Eureka creators are not terribly overjoyed about the sponsorship. A new character introduced this year is The Fixer, whose purpose in coming to Eureka is to seemingly squeeze profits out of research that previously existed to Serve the Common Good. Of course, it wouldn't be Eureka if the character didn't have ulterior motives, and ended being interesting regardless of her reasons for existence. The subtle message about crass commercialism versus purity of purpose, however, shouldn't escape even the most betrayed-feeling fan.

Eureka's third season is an interesting experiment. On the one hand, you have increased intimacy through social media; on the other, corporate encroachment on the creative process. We'll find out if the experiment was a success if the show receives the OK for a fourth season. If Eureka does get a new season, one wonders what will be sold this time.

Dog food? Coffee beans? MIT? One can only hope the show isn't sponsored by Ex-Lax.

According to DSLReports, Comcast is instituting a cap on its broadband customers. The cap will be 250GB a month, with one "freebie" month, where you can go over this amount without repercussion.

As caps go, this is one of the more reasonable. However, I expect to see other broadband companies following suit since one of the major players has now made a cap move. Eventually, this will most likely end up in front of the FCC, Congress, or court, as these companies will be forced to provide detailed operation information in order to assess whether they really have a congestion problem, or if their actions are anti-trust. This will also lead to questions about how much these companies reinvest profits back into infrastructure.

I also don't see how caps are going to overcome problems with congestion, because people could use most of their bandwidth allotment during peak times. Wasn't that the purpose of caps? To reduce congestion?

Stop the Cap! is a web site and weblog dedicated to the fight against broadband caps. From the Mission Statement:

We feel the current usage caps being considered by broadband providers are unreasonable, some moreso than others. Those below 10GB per month are outrageous. Others which may run above 100GB a month also represent a concern because of the future direction of the Internet. Consumers who exceed those caps may face immediate service termination or greatly overpriced “overage” charges for additional bandwidth, which we oppose. The industry’s marketing campaigns have always emphasized that among the benefits of subscribing is fast access to streaming video and audio, gaming, downloading songs and video, and other bandwidth intensive services. It should come as no surprise that customers have used their service exactly as their marketing intended.

From the Talking Points page:

Most cable systems plan to exempt customers from accessing content they own or control through their online portals. This represents an end run around Net Neutrality - a plan to allow big corporations to control the infrastructure and discriminating against the traffic they don’t own or control. Independent producers and businesses not affiliating with a cable company will have a hard time selling a business plan in a world where bandwidth caps make accessing those independent products and services prohibitively expensive.

There's considerably more at the site. Excellent. (via DSL Reports)

GigaOM has been spending considerable time lately covering issues of broadband congestion and possible broadband capping—not without some overt hostility expressed by regular readers, who seem to think the issue is one of "selfish" users impacting on the quality of broadband for all. Previous entries are Yo FCC! Are You Doing Anything About Metered Broadband and Warning Sign: Metered Broadband Already a Hassle.

Today, Stacey Higginbotham points to a new report by Free Press that addresses the reality of broadband congestion, as well as providing good alternatives to the caps that current ISPs are considering using.

According to the PDF report, how much congestion there is in broadband is open for debate. For instance when Bell Canada started application throttling it admitted during an investigation of its practice that there was "almost no congestion...". I would not be surprised to see the same with networks here, including ATT with its talk of the use of caps being "inevitable".

In addition, the report also provided some very real, effective solutions that are much better than capping—including throttling during peak usage, whereby a person's bandwidth speed would be reduced to a certain level during congested hours. This is a superior solution because, as the report expresses eloquently, caps will impact on everyone's use of broadband:

Compared to limitation pricing, limitation throttling also makes better sense for ISPs. Limitation pricing (especially with low caps) will modify the behavior of almost all users. With everyone watching the meter, this pricing model will inevitably lead even casual users to spend less time online or to avoid applications that use high amounts of bandwidth—the very applications that are response for the increases in the perceived value of broadband access of customers.

This pattern of changing behavior will inevitably cause the marginal customer to question the need for the connection in the first place, leading to a possible slowdown in the growth of new customers for ISPs.

The report also covers the issue of caps in other countries, such as Australia, New Zealand, Belgium, and Canada, but explains that much of the traffic in these countries is asymmetric, with traffic one way. This is more expensive than what we're facing in this country, where we produce most of the online material we consume. As it is, most other countries also have much more competition among providers than we do in the States.

In addition to capacity issues, the report discusses the US's declining position as technical "leader" in the world, a position that could only be degraded if we were to throttle an essential resource like the internet.

At issue is not that broadband companies are becoming overwhelmed, but that the same companies providing broadband are beginning to perceive that online video offerings such as Netflix WatchNow, Hulu, iTunes, and so on could become an eventual threat to their bread-and-butter operations: offering entertainment packages. Capping broadband use to prevent competition is against the law in this country. If this is the situation, when reason fails, the courts will then need to become engaged. I have to think the ISPs know this, and such knowledge will give them pause.