Christopher Mims makes a really good point:

It makes no sense that writers like Felix Salmon, who is generally excellent on just about everything, describe Netfilx, even pre-split Netflix, as an inexpensive alternative to cable. It’s not. It’s only inexpensive if you take fast broadband at home for granted — you know, like every tech pundit and journalist on the planet.

To be fair, it’s a mistake all of those pundits makes regularly — the conflation of their own situation with that of the wider public. But only one in three Americans pays for broadband, which means that something like two-thirds of the population has access to it. That’s not bad (it’s not great either – it puts us something like 27th in world broadband penetration) and it leaves out precisely the people who are being left behind by both our economy and the digital divide.

I moved to the US before the rollout of the cable modem, and for me it was a game-changer: within a few months of its arrival, sometime in the late 90s, I switched from cable-and-no-broadband to broadband-and-no-cable. I was one of the earliest cord-cutters, long before YouTube or Netflix or any real video content on the web which I had any desire to watch. I didn’t want to watch TV on my computer: I just preferred content online to the content on the TV.

Now, over a decade later, it’s possible to look at the population more broadly, and see how their preferences have revealed themselves. And Mims is right: if you have a cable line coming into your home, you’re much more likely to have cable-and-no-broadband than you are to have broadband-and-no-cable. Cord-cutting was a privileged, yuppie behavior when I did it in the 90s, and it remains a privileged yuppie behavior today.* Sure, I like having an extra $100 in my wallet every month due to the fact that I don’t have cable. But I could easily afford it if I wanted it — the fact is that I stopped watching cable long before I cut that cord.

For the time being, the price of broadband — largely set by cable companies — is being set high enough that cable-but-no-broadband subscribers are not switching to broadband-but-no-cable. In order to cut the cord, it seems, you need broadband first: you need cable and broadband, and then you need to come to the decision that you can do without the cable bit.

So, yes, let’s slow down on visions of free or cheap online services supplanting cable for America’s poor. Because Mims is right: broadband is not free. And the cost of Netflix is therefore comparable to the cost of cable — with no live-TV services at all, and in general a much narrower selection of things to watch. At some point, I’m convinced that IP-based video will indeed replace cable. But in order for it to do so, the cost of broadband is going to have to come down. And that doesn’t look as though it’s going to happen any time soon.

This is good as far as it goes but it needs to go much further. There is a significant option for live TV that Salmon omits entirely. It's cheaper than Netflix and it offers better programming than basic cable, both in terms of signal quality and in the number and content of channels.

In Salmon's defense, almost everyone has missed the story of over the air digital TV. The coverage has been sparse and often factually challenged. The New York Times mistaken reported that you needed a special antenna (signal amplification is nice but a set of dollar store rabbit ears will still do the job). It also managed to under report the number of channels available in at least one major market by a factor of more than three.

Sadder still, the little coverage we've seen has pretty much completely skipped over the most interesting parts of the story including:

Pavlovian consumption -- why does anyone continue to purchase bottom tier cable when the free option is better by almost any measure?;

Selling off the commons -- there's a push lead by business interests and conservative economists to remove the free TV option entirely. Rajiv Sethi wrote the definitive post on this over a year ago;

Television in the immigrant community -- Over-the-air broadcasting has a disproportionately large immigrant audience;

New markets and models -- A number of major players (NBC, Tribune, etc.) have come up with innovative programming for the new technology;

Smart, innovative upstarts -- The new technology has also opened up opportunities for small players like Weigel Broadcasting which has been recreating the Turner model for OTA while adding some impressive enhancements. I'll have more to say on this later, but for now I'll leave it at this: if I get cable tomorrow, I will still keep the rabbit ears hooked up because of Weigel.

Journalistic biases -- As Mims points out, the people covering these stories tend to conflate their situation (usually upper-middle class) with that of everyone else. They also tend, all too often, to go where they're told to and cover stories fed to them. An orphan medium primarily serving immigrants and the poor will have a hard time getting on most journalists' radar.