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| 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.
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| said by BillRoland: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. 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. Ever since satellite TV became available, they have predicted cable's demise. It hasn't happened yet and it won't happen soon.
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 oliphantI Have 8 BoobiesPremium
join:2004-11-26
Corona, CA | reply to BillRoland
We'll see. If what you say is true...the cable operators wouldn't be crapping twinkies and engaging in predatory prices trying to compete with new fiber deployments.
As for your non-fiber related markets...I can only speak for my local market where Comcast is struggling against DBS and telcos. Comcast video delivery has suffered from poor service and endless price increases while DBS resellers have been very active in getting those disgruntled subs. The telco deployed new RTs to get 100% DSL availability and is pushing their $15/mo DSL to POTS subscribers which is what "Uncle Bob" is all into. No need for Comcast 4-8Mb to surf EBay but if that is what you're into, DSL resellers have 7Mb unlimited use static IP DSL with unlimited premium usenet for prices cheaper than comparable Comcast products. VOIP as popular as it is here on DSLR is still no match for POTS in subscriber counts and even those who get VOIP often keep their POTS lines. I would venture POTS is losing more numbers to cellular than VOIP and who runs cellular? The telcos.
So in your neck of the woods, non-fiber telcos like Qwest are struggling against cable. Here cable is getting an ass kicking while Verizon contractors are deploying FIOS which will be a death blow to the local Comcast franchise unless they provide better service and drop their prices.
Landlines and wireless currently finance the telcos, but fiber will change that and that is what has the cable operators crapping their pants. Soon it will be a nice share of cable's margin going into the telco wallets.
No matter what happens...consumers will certainly benefit from the real competition that is coming and that makes this price/service fanboy very happy.
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| said by oliphant:Landlines and wireless currently finance the telcos, but fiber will change that and that is what has the cable operators crapping their pants. Soon it will be a nice share of cable's margin going into the telco wallets. No matter what happens...consumers will certainly benefit from the real competition that is coming and that makes this price/service fanboy very happy. People are being VERY narrow in their views as to what the Telcos fiber to the home holds in the future...
One of the biggest things the Telcos have been trying to do for the last 40 years is "Picture phone" but the "phone lines" were never able to handle the bandwidth, with fiber, that is a thing of the past, and the technology to do videophone has also been around for the last 40 years. Once they offer that, you will see MOST VOIP users dropping it like cancer!
And don't look to the investors for what is profitable, they are only looking for the "fast buck", fiber will cut the Telcos costs massively and return the money spent quite quickly, after full deployment...
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| reply to BillRoland
quote:
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.
To be fair, this is more because they expect immediate quarter to quarter results, and this is a long-term decade project. I think the skepticism is also more centered around invading the TV segment and getting outside the telco core competency than the laying of fiber, which really is quite sound....and quickly getting less expensive. | |
| said by Karl Bode: quote:
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.
To be fair, this is more because they expect immediate quarter to quarter results, and this is a long-term decade project. I think the skepticism is also more centered around invading the TV segment and getting outside the telco core competency than the laying of fiber, which really is quite sound....and quickly getting less expensive. That's a short sighted, over simplified answer. Major investors are not short sighted, Karl Bode  , they look at the big picture and the long term. Fiber's profitability DEPENDS on them offering more than just a $39.99-$59.00 a month internet connection on it. If they can't take video subscribers from cable, they just built an aircraft carrier in Wyoming. And while they're having to build a fiber plant to offer this stuff on, cable is draining them of the very people bankrolling this, POTS subscribers, in a fairly impressive way.
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| reply to oliphant
said by oliphant:We'll see. If what you say is true...the cable operators wouldn't be crapping twinkies and engaging in predatory prices trying to compete with new fiber deployments. I guess you didn't read the article, the article was lamenting the fact that cable was doing just that, they aren't crapping twinkies and they aren't appearing to be quaking in their boots. And you're confused on who is engaging in predatory pricing, that would be Verizon: 30/5Mbps service $179.99-$199.99 on the website in and a lot of areas, unless, of course, you live in certain areas (NOVA), where its been advertised in the $50's per month. THAT would be predatory pricing.
Also, wireless is not financing the telcos, landlines finance wireless. Its funny that in recent years, the one cell company that had no landline business, always performed the strongest, NEXTEL. Telco bureaucracy and inefficiency is like a disease, it infects anything they touch.
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| reply to JRW2
said by JRW2:And don't look to the investors for what is profitable, they are only looking for the "fast buck", fiber will cut the Telcos costs massively and return the money spent quite quickly, after full deployment... And if that were true, wouldn't they have done it years ago, or be moving even more aggressively? At least one major Telco, Bellsouth, didn't agree with your assessment at all, and AT&T didn't trust your assumptions enough to dive head first into it, opting to take a more cautious approach (which may not turn out to be a bad idea). It seems to me that the desires of people here for speed, have blinded them to financial realities.
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| reply to BillRoland
quote:
Major investors are not short sighted, Karl , they look at the big picture and the long term.
Some do. Many "Major investors" are frequently short-sighted, and get antsy when they don't see immediate quarter to quarter results. Fiber is clearly the long term answer when it comes to network upgrades. As opposed to what, Project Lightspeed? Where you've eaten up all your VDSL bandwidth with HDTV and can't offer competitive cable speed tiers?
quote:
If they can't take video subscribers from cable, they just built an aircraft carrier in Wyoming.
Early projections have cable taking the lead because of VoIP grabs, with Telcos catching up down the line. Cable, 22% of phone customers by 2009, compared to telcos grabbing 6% of video customers by the end of 2009.
It's the IPTV returns, not the fiber, that's making them nervous long term. Verizon is slowly reducing the cost of Fios installs (using MOCA tech via in-house coax).
And by the way, investors of cable stocks are just as nervous as telco investors. They see Verizon upgrades and a zillion Internet video offerings and know they could likewise erode video share. Also, if you believe Rupert Murdoch and a few others about the future of voice being free, then the race to grab voice customers is ultimately a race to nowhere.
I know the cable dream is to have everyone and their mother signing up for $200 bundles, but I think they're a little too excited about that idea. Time Warner right now says 6% of their customers do the triple play....
I think the idea that everyone wants to bundle is tired. I believe A la carte services from multiple outfits, not bundles, are the eventual future (a decade plus from now).
Maybe telcos & cable companies are destined to be dumb pipe providers? | |
| reply to BillRoland
said by BillRoland: That's a short sighted, over simplified answer. Major investors are not short sighted, Karl Bode , they look at the big picture and the long term. Fiber's profitability DEPENDS on them offering more than just a $39.99-$59.00 a month internet connection on it. If they can't take video subscribers from cable, they just built an aircraft carrier in Wyoming. And while they're having to build a fiber plant to offer this stuff on, cable is draining them of the very people bankrolling this, POTS subscribers, in a fairly impressive way. Oh please, you are dealing with people who wanted to be part of the dot-com gold rush. They want instant gratification and not long term growth anymore.
Look at all the commercials for people to be their "stock broker." These people think it is so easy to make a quick buck.
As for the telcos, they have been sitting on their guaranteed rate POTS service for too long to realize what is happening. | |
| reply to JRW2
People, in general, don't want a videophone. It's possible to do it today with cable or DSL, but do you want to have to worry about how you look when someone calls you out of the blue? With the current phone technology you can pick up the phone and chat away whether you are dressed for a night on the town or wearing your pjs. There's no worry about whether the call is from a significant other, your boss or just some schlub trying to sell you a product. All of that changes if every call will include your moving image.
I don't see videophone taking off until it reaches a point where it's offered for no extra cost. At that point it may become ubiquitous but that will mean the cable companies are providing the service as well. Certainly there's no reason they couldn't do it today if there was enough demand. After all, the switched digital service that's being tested out now is all about providing more bandwidth to the cable consumer's home. | |
oliphantI Have 8 BoobiesPremium
join:2004-11-26
Corona, CA | reply to BillRoland
North VA isn't the only area that gets the 30/5 for $55 ( »[northeast] Verizon FIOS (30MB) ISP WOW ) just as the east coast was the first to see the 3Mb rollouts. The Northeast is the test market area for much of Verizon's new products and it has little to do with who the competitors are in those specific markets,and is not predatory in nature in that the pricing is not in reaction to a specific competitor in a specific market like Comcast has done more than a few times.
»'Discounted' Competition
»Comcast Vs. Utopia
Wireless is profitable by itself and needs no landline funding. As telcos lose POTS subs fiber will more than fill in the gap by stealing cable subs.
Telcos are bloated but there is little doubt that in the end telcos will take more customers from cable operators than cable will take from the telcos. Winner will ultimately be telco as they'll get to survive the loss of POTS, the loser will be cable who will see their money trees cut down. Both telcos and cable operators will continue to survive and the biggest winners will be the consumers benefiting from this war of price and services.
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| reply to BillRoland
said by BillRoland: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. AT&T and Verizon haven't stolen customers from cable companies as yet, or at least they haven't made an impact on the cable companies bottom line. Most likely what has happened is AT&T and Verizon has slightly slowed the growth of new cable internet subscribers. | |
oliphantI Have 8 BoobiesPremium
join:2004-11-26
Corona, CA | reply to Karl Bode
said by Karl Bode:And by the way, investors of cable stocks are just as nervous as telco investors. Which is why people like Roberts are spinning the crap out of this.
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 roamer1sticking it out at you
join:2001-03-24
Atlanta, GA | reply to BillRoland
More precisely, business landlines (and T1s and so on) and access charges paid by LD carriers finance larger telcos; residential service is typically run below cost. (Smaller rural telcos typically have very few business customers, and very few high spenders in particular, and so rely almost exclusively on residential, access charges, and the USF.)
Most cable companies (other than Cox and Cablevision) have little to no interest in serving business customers, mostly because of all the CLECs competing for the same business and because of cablecos' traditional focus on video, a product that most businesses don't need, that has kept cable plant outside of many commercial and industrial areas.
-SC
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yac898
join:2002-12-06
Stony Plain, AB | reply to oliphant
i'm not sure how thing work where you live, but in canada, what you pay for tv (sat or cable) a large % goes to the government for "redistribution" to the various channels. i think the cable co's keep about 60% of your monthly fees. ( please feel free to correct me on this). on the telco side, they get to keep the majority of what they collect on a monthly basis. I can see FIOS absorbing enough tv subs to MORE than break even at first,adsl/vdsl telco deployment may be a harder sell. where i live, to get telco tv (adsl2+) you MUST sign a contract, have adsl/landline/longdistance service just to get the TV service. for every sub the telcos lose to voip, they must gain 1.4 subs for tv. telco tv, at least where i live, is not an innovative product, but an attempt to stop the bleeding of landline subs. again where i live, landline revenue directly subsodises the cost of customer aquisitions on the cell phone side.the telcos (again at least where i live) can't sustain land line loss vs tv gains unless it exeeds a 1.4/1 ratio. there is not a telco out there anywhere(in canada) that is currently doing that.
the local cable co has gained about 120,000 phone subs, while the local ilec has gained an unpublished # of tv subs.
if it was a substancial #, they would relese it). telcos here,are a dinosaur stuck in the tar pits, slowly sinking. | |
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1 edit | reply to roamer1
said by BillRoland:... and because of cablecos' traditional focus on video, a product that most businesses don't need, .. I can't speak for anywhere other than in NY, but you will NEVER see a business in NYC that does NOT have a TV, or several.
On the trading floor I work on we have 16 TVs for 300+ people...
This all started when Iran took the hostages, and CNN became the must watch channel...
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