Disrupting the Signal Stealers Who Disrupt Us

Kudos to Dan Deeth, Media and Industry Relations Manager at Sandvine. People can spend a lot of time describing things, when what we really need is to give those things an appropriate name. If you pick the right name then everybody appreciates the salient aspects intuitively, and conversation can move forward efficiently from then on. Lots of time is wasted if there is no name for the thing you want to talk about, and choosing the wrong name just points people in the wrong direction. As far as I can tell, Dan has found the perfect name for one of the biggest threats to the revenues of the comms industry. As Dan explained to the Canadian Broadcasting Corporation (CBC):

“Basically, [the pirates are] stealing signals from around the world, digitizing them, and putting them online,” says Deeth.

Signal stealing. That is the enemy of every business that intends to profit from the transmission of signals, whether they sell the content being transmitted or provide the infrastructure over which it is transmitted. Unlike piracy, which conjures images of one-eyed men with parrots on their shoulders, or of Somalis machine-gunning container ships, signal stealing identifies exactly where the weakness lies, and how it is exploited. Telcos are in the business of sending signals from one place to another. Anybody who steals and reproduces that signal is a threat to our business model.

If you accept that your opponents are signal stealers, this will also help you to reach the correct conclusions about how to fight them. Signals can go from anywhere to anywhere. Signals can take many different routes. Signals can be disguised, or hidden inside other signals. Signals can be encrypted. So if your goal is to stop signal stealing, then trying to block signals is going to be about as successful as any other enforcement technique where finite resources are used to deny access to a very large amount of territory (see also: why I still receive email spam every day, how people continue to illegally cross borders, and why LinkedIn allows a plagiarist to share content after being shown proof he does not own the copyright).

Given that Dan has come up with the right name for the signal stealers, he also comes up with the right solutions:

“The best way to stop this is to make these services unreliable, make it not worth the money,” says Deeth.

Making something unreliable is not the same as blocking it. This is where we cut to another person whose opinion was asked by CBC:

Shan Chandrasekar heads up the Asian Television Network (ATN), Canada’s largest South Asian broadcaster. He’s also spearheading an anti-piracy coaltiion (sic) called FairPlay — backed by Bell, Rogers and CBC — that wants Canada to block piracy websites.

If you still think names are unimportant, consider how something called the “Asian Television Network” can be “Canada’s largest South Asian broadcaster”. They are obviously not based in South Asia, nor broadcasting to anyone living in Asia, though they might be the victims of pirates whose range extends that far.

Chandrasekar says his company has lost close to $4 million in revenue over the past five years, and he blames a good portion of the decline on lost subscribers who have turned to piracy, including black market live TV services.

He says those services can steal for free live broadcasts ATN pays big money for, such as the Cricket World Cup.

Given that the Asian Television Network is not actually broadcasting in Asia, we can only assume that Chandrasekar and the CBC failed to notice their own racial profiling of pirates and their customers. That is a bit of a slip in the standards of Canadians, who are normally so politically correct. But that is not Chandrasekar’s worst mistake.

Chandrasekar says FairPlay’s proposal to block piracy websites including illegitimate IPTV services, would also help combat the problem.

“To go after blatant piracy sites is, in our opinion, an extraordinarily simple, common-sense approach.”

This approach is so simple and makes such good sense that it has been tried over and over, in country after country. And has often failed to deliver the promised results.

At this point people with a memory (or who have read a history book) will recall that the human race enjoys a long history of adopting common sense solutions that never actually solved the problems they were supposed to solve. In a different era, many people might have supposed that the common sense solution to South Asians stealing signals is to focus law enforcement efforts on South Asians who signal steals. That is no longer considered common sense, and rightly so, but the change in attitude highlights why we should be wary of allowing public policy to be determined by simplistic ‘common sense’ reasoning that is not backed by proper research or data.

The reason why blocking is rarely a good long-term solution was unwittingly highlighted by Chandrasekar himself, as reported in another CBC piece that is seemingly based on the same interview.

Chandrasekar says piracy has become a much bigger threat largely due to the recent popularity of Android boxes. When hooked up to a TV, they allow people to easily stream pirated shows and movies from the internet for free.

Hmmm. And why are these Android boxes so popular? It is because they represent a technologically innovative way to send and receive signals. They are a response to past efforts to block signal stealing. So even if Chandrasekar enjoyed some short-term success with blocking of signals, we will only need to wait a little while before another CEO is complaining that we need to block some new kind of signals that suddenly became popular.

Chandrasekar’s opponents have a better understanding of technology than he has. Canadian advocacy group Open Media observed that Chandrasekar’s proposals would only permit judicial oversight after blocking has already occurred, which begs the question of who pays compensation if the blocking was not justified in the first place. Furthermore, Open Media spokesperson Laura Tribe pointed out a simple fact that should be painfully obvious to everyone:

“It’s not hard for people to build a new website,” she said.

Or to put it another way, if you block one signal, it is not hard for people to send another.

The oddity in this argument is that there is already plenty of precedent for how businesses need to transform to continue to profit from the sending of signals. The music industry used to resist pirates by blocking them whenever possible, but eventually they capitulated. Arguably that was because the issue was not with piracy per se, but with the transformative economics of distribution when music is sold over an electronic wire instead of being physically cut into a piece of vinyl. Spotify exemplifies how the distribution model had to change for music, though the pathfinder was Apple and their iTunes store. The result is that revenues for the music industry are lower but those who adopted new technology can still make money, whilst those who resisted change have steadily disappeared.

Business models can sometimes collapse because they are superseded through the novel application of technology. This kind of revolutionary transformation occurs from time to time. For example, insurance brokerages went out of business as insurance providers sold direct to customers, first using telephones, and then through the internet. Then the insurers came under increased pricing pressure because of comparison websites. Amazon’s clicks-and-delivery model is now challenging many kinds of retailers, many of whom are in decline. And newspapers are in retreat as people choose to learn about current affairs from the internet. So how much effort should business people put into protecting the outdated concept of a television network when the planet has a single network of computers that can be used to stream audio-visual content alongside everything else?

Canadians will continue to debate the merits of signal blocking. The Canadian Radio-television and Telecommunications Commission (CRTC) will be accepting feedback to Chandrasekar’s proposals until 29th March. But really this debate will go around and around until legitimate businesses do what the pirates do, exploiting technological advances to lower prices to the point where it is not worth stealing the signals any more. Businesses may seek to disrupt the signal stealers on the way down, and Chandrasekar’s resistance should be seen as a stubborn rearguard action, whilst also being evidence that investors should have limited confidence in the long-term prospects for his company. Cannier investors may prefer to put their money into companies that bet on the future. This is because the ultimate source of disruption is the change in technology that made signal stealing viable and profitable, and that transformation will inevitably disrupt everyone.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.