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Is Cable in Denial?
Critics: show rhetoric might not match reality

Reuters proclaims that a "a fragile but carefully cultivated suspension of reality permeated the air," at the cable industry's annual trade-show last wek in Atlanta. IP Democracy takes a similar jab:

"The U.S. cable industry has nothing to fear from anybody. Its plant is inherently broadband and interactive — no need for the exhorbitantly expensive upgrades that the inherently narrowband telcos must implement.

Cable systems can roll out any combination of new services in a heartbeat, crushing competition in the process. Satellite competitors don’t have a terrestrial network capable of offering voice and high-speed data.

VOD will trump anything the Internet can offer in terms of on-demand video programming. The government can’t justify a la carte or net neutrality or uneven franchising obligations.

If you attended the National Cable & Telecommunications Association convention last week, and didn’t know anything else about the broader communications marketplace, you’d believe all this. Apparently, cable operators do believe all of this.
Facing challenges from TelcoTV and Internet video, is the cable industry justifiably confident, hopelessly in denial, or fully aware and simply trying to calm investors?

Most recommended from 52 comments



BillRoland
Premium Member
join:2001-01-21
Ocala, FL

3 recommendations

BillRoland

Premium Member

Reports of Cable's Death Greatly Exaggerated

If I had just read this fine piece of news here and believed it I'd really think that Cox is in trouble. But since I'm the type that looks at things logically, lets look at this logically.

1. Who's really the innovators in US broadband? Its not telcos. Cable deployed HFC plants years ago. There's fiber at the end of my street, but its not telco fiber, its cableco fiber, and its been there since 2000. Right now I can call up Cox and get analog cable, digital cable, HD Service, High Speed Internet (9/1Mbps for the same price Sprint sells a 5/768Kbps service w/ 2 year contract for), and QoS guaranteed Digital Telephone (with more feature for less money than a line from Sprint). Can you match that in the vast non-FIOS areas from a telco? I'm not a betting man, but I wouldn't bet on it.

2. Emerging DOCSIS spec updates will drastically increase the pipe that's already there, without having to rebuild the plant. Sure, eventually the HFC will give way to a pure fiber network, but there's no need to do it today, if you don't have a need for it until 10 years from now.

3. DSLR users seem to forget they are not a random sample of Americana. 30/5Mbps FIOS internet and ITPV may sound like Mecca to you, but what about Uncle Bob, who likes watching CNN all day and browsing eBay? Is he going to be inclined to turn everything upside down and go for the fiber? Probably not.

4. Its not clear that fiber can be profitable yet. Don't believe me? Why have Verizon's investors been so negative on it? These are the people who have the most to gain from it, and yet their reaction has been luke warm at best, and downright cold to it usually.

I know I will be accused of being a cable fan boy from this post. If that makes you feel all warm and fuzzy, then fine. I'm just a realist. The reality is that I don't think cable is dire straights. Nor, however, do I think they can afford to just sit around and do nothing, and there is no indication they are doing that. What I know is that Verizon and to a lesser extent, AT&T, are shelling out mondo cash for fiber, and we don't really know how many customers they have stolen from cable companies or will in the future. The fact that the numbers aren't really flowing on that stat would indicate that its not much. We do know, though, that cable VoIP is ripping away subscribers from traditional telco POTS at a high rate (I seem to remember Cox has over 45% of landline business from Qwest in Omaha, Nebraska). Landlines finance the telcos. You do the math.