What Telco Threat? Cable rhetoric bubbles over at NCTA show As you'd expect, there's plenty of cable industry rhetoric emerging from the industry's National Show this week in Atlanta. The primary goal of course is to ease investors' minds about the threat posed by telco next-gen services like AT&T's Project Lightspeed (U-Verse), and Verizon's Fios. Some interesting tidbits pulled from show-coverage: • Broadcasting Cable reports that Comcast delivered 1.5 billion on-demand streams in 2005, and 50% of Time Warners digital subscribers use VOD an average of 30 times a month.•Execs are finding comfort in a recent study stating cable companies will have 8% of residential phone customers by the end of this year, and 22% by the end of 2009 - while Telephone companies will have less than 1% of TV subscribers by the end of 2006 and only 6% by the end of 2009.• The Street offers up stats from Time Warner Cable's CFO John Martin: 7% of customers bundle three services, 40% bundle two, and a whopping 60% [sic] still only subscribe to one service.• Reuters notes that cable's pretense that IPTV isn't a threat isn't working on investors, they're uneasy about a brutal video-price war on the horizon.• Multi-Channel has Motorola's chairman Ed Zander telling cable outfits to look overseas for inspiration: "In Korea, for $9.95 [per month], you can get all the TV you want," he says.• TMCNet has CSPAN's CEO saying VOD is being boosted by the low quality of Hollywood films. "When they're good again, there won't be box office problems. But they're just terrible," he says.
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 | | Hmmmmm........ quote: Reuters notes that cable's pretense that IPTV isn't a threat isn't working on investors, they're uneasy about a brutal video-price war on the horizon.
Guess Brian Roberts needs to listen to his investors a little more.  | |
|  rit56 join:2000-12-01 New York, NY | hey a good idea I like Ed Zanders idea, the Motorola dude. 10 bucks for cable tv..... sign me up for digital please. | |
|  |  dvd536as Mr. Pink as they comePremium join:2001-04-27 Phoenix, AZ kudos:4 | Re: hey a good idea said by rit56:I like Ed Zanders idea, the Motorola dude. 10 bucks for cable tv..... sign me up for digital please. doesn't korea also provide 100000/100000 for $16.93? -- You can never be too rich, too thin or have too much Bandwidth | |
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 | | Hmmm some one does not know how to add "The Street offers up stats from Time Warner Cable's CFO John Martin: 7% of customers bundle three services, 40% bundle two, and a whopping 60% still only subscribe to one service."
Unless the 40% contains the 7% | |
|  |  hyperonPremium join:2006-02-04 Bastrop, TX | Re: Hmmm some one does not know how to add said by Freezone:"The Street offers up stats from Time Warner Cable's CFO John Martin: 7% of customers bundle three services, 40% bundle two, and a whopping 60% still only subscribe to one service." Unless the 40% contains the 7% He, he, yes it sounds like the analytical reasoning section from the GRE exam  | |
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 RayWPremium join:2001-09-01 Layton, UT kudos:1 | Not a threat? I hear that Comcast internet in the Benbrook Texas (a friend of mine) has slowed way down to under DSL. Would make me want to jump. -- I am not lost, I find myself every time. | |
|  gwionwild colonial boyPremium,ExMod 2001-08 join:2000-12-28 Pittsburgh, PA kudos:1 | Not as though I get... .. literallya very high-cost marketing mail blurb daily from Adelphia... sad, really, because I would love to tell 'em I'm a "lost cause"... but the old saying is true, :
I find it hard to hear what you say... what you do speaks so loudly it drowns out everything else...
Cable's squirming... here's an idea... start spending all that marketing cash on fiber and improving the network... learn to compete. It's fun, really, try it, for once. Cable's monopoly is dead... the king is dead!
LONG LIVE THE KING! (whomever the competative marketplace crowns, of course).  -- Semper Eadem --
the violets in the mountains have broken the rocks. | |
|  |  hobgoblinSortof AgoblinPremium join:2001-11-25 Orchard Park, NY kudos:2 | Re: Not as though I get... gwion (a welsh name I believe) posted
"start spending all that marketing cash on fiber and improving the network... learn to compete. It's fun, really, try it, for once. Cable's monopoly is dead... the king is dead!"
Tell that to Verizon.....I can't move for Verizon commercials. Without that spending MAYBE they could roll it faster.
I believe that cable is so far ahead of the game...they will never catch up.
Hob -- "A foolish consistency is the hobgoblin of little minds." - Ralph Waldo Emerson | |
|  |  gwionwild colonial boyPremium,ExMod 2001-08 join:2000-12-28 Pittsburgh, PA kudos:1 1 edit | Hob, you know me... I've been around here for ages, and so have you... G lad to see you still active and sharp.
Welsh... indeed. Thank you. Gwion is the uninitiated Taliesin... or Merddin (Merlin). Seeking knowledge and wisdom... "I was, at first, little Gwion... at length, all kings shall call me Taliesin ("radiant brow")"
I grant you, too, that cable is making strong inroads to the user desktop... that's why I tend to sort of "cheerlead" for telcom, make sense? I want to see an active, competative market, and, above all, I want to see innovation and the advancement of technology. We need a free market to do that, and, slowly, I do think that's what we're getting.
We're undergoing what I've previously referred to as "the second industrial revolution"... the "tech revolution". There's so MUCH meat on our joint table... telcom and cable... that the real question isn't who'll eat, it's how much we can eat, together. I want to see a real gentleman's game, here, where you call and I raise and the end game is told by our cards. I referred to Teddy Roosevelt, one of my own American heroes, in another post, and I mean to say that I hope his spirit will live in this revolution... innovate, create, and improvise, until the net result is a better and constantly improvibg comm system for everybody.
I stand by my statement, by the way... "spend that cash where it matters," Marketing strikes me as the cart leading the horse, today. I know cable can do it... I've seen the "first strike capability" in communities I've done contract negotiations for... but I'm sort of put off, I admit, at the degree to which cable will struggle to "max out" a build. I'm sure you understand my meaning. That is, to get the last DROP of usefulness out of a capital expenditure. Comes a point, frankly, where that "drop" castrates the company and its longer term viability. Looks great, on a balance sheet, don't get me wrong. But it stagnates technology, and waits for obsolesence.
Real world example: I represented a town, some years back, and the (monopoly) cable co insisted that, if we gave a second franchise, they would be bankrupted, and have to pull out. We gave it... and the two companies are now BOTH enjoying the "fatted goose". Neither went bankrupt. Rates are good, too, for subscribers... around 30 bucks a month.
The end result was a "cleaning of the pipes", both companies became better providers. They had to... they stood head-to-head competing for subscribersa. And the bankruptcy thing? Oh, ahem... well... the morning after the Borough Councillors voted to grant the second franchise? The old monopoly cable co was rolling -- literally, the morning after -- rolling fiber trucks all across the Borough! Amazing, ain't it, what a little "competition" can do for a company's health! 
PS - A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines... Mister Emerson --- rather obviously --- hadn't yet met Mister Thoreau --- the sponge ---, but I do digress...
-- Semper Eadem --
Dreams unwind. Love's a state of mind. | |
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 | | TELCOS where are you? They have yet to deploy 50% of their network, yet to lower prices and offer superior speeds in 100% of their markets. The spending is a dollar short and quite a few pennies OVER the cost of cable companies, such is the case right now. This war we hear of is like the civil war in Iraq before the poop hits the fan in WWIII. A sneak fart, if you will...and only areas where cable companies smell it does anything happen. | |
|  oliphantI Have 8 BoobiesPremium join:2004-11-26 Corona, CA | Hmmm... I thought that the telcos were "irrelevant" or at least that is what the cable giants wanted investors to thing. Investors will just get dizzy from all the spin. -- WAR HAS NEVER SOLVED ANYTHING, except ending slavery, facism, communism, Nazism.... | |
|  |  RadioDoc58ef2c0Premium,ExMod 2000-03 join:2000-05-11 | Re: Hmmm... Evidently all those Hyundais on the info superhighway are giving the BMW dealers nightmares. -- Toolmaster of La Grange. | |
|  |  |  | | Re: Hmmm... said by RadioDoc:Evidently all those Hyundais on the info superhighway are giving the BMW dealers nightmares. Not to mention all the corvettes(fios)users,starting to open it up to see* what she'll do* .Whereas those BMW's have a govern-er (cap) that limits the super highway speeds  -- Bass....the glue of rhythm and harmony...the heartbeat of the band.! Shaking the earth with deep,sonorous vibrations.The dark ominous thunder of an approching storm. | |
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| You forgot about telco investors... who are equally, if not more jittery about the massive cash hemorrhaging at telco's laying the fiber. I don't think it will be too much longer before investors put a halt to Verizon, and to a lesser extent, AT&T's "aggressive" fiber deployment plans on the grounds that it would take too long to realize a profit.
If I were an investor, I'd still bet big on cable. -- "Don't steal. The government hates competition." | |
|  |  gwionwild colonial boyPremium,ExMod 2001-08 join:2000-12-28 Pittsburgh, PA kudos:1 1 edit | Re: You forgot about telco investors... That would, in fact, be great, in the short term. There's a LOT of cash in "basic" internet service and all. But the problem arises in terms of long run strategic positioning. I think Verizon and T are thinking quite soundly, for that part of the equation. As far as investor discontent, Verizon's not really experiencing it, they're just sort of languishing at around 30 bucks a share, which isn't bad, in the industry, these days, adjusted for earnings and all. T is still suffering from their failure to execute very well over the past ten or so years, but they're staging a pretty solid comeback... I really had them written off, a few years back, as roadkill on the information superhighway, but they're doing a good job at re-directing their resources at profitable markets.
As anyone with any military or law enforcement background knows, there are two distinct ways of looking at a battle, the tactical and the strategic. Sometimes, we write a given battle off, as a tactical impossibility, to gain a strategic advantage. Concede the battle for the sake of winning the war, in other words. I really think Verizon and T are doing just that, with their aggressive next generation deployments. Right or wrong, they're playing a card that all of the players will, eventually, have to play. They've just turned it over sooner, rather than holding it in their sleeve.
In ten or so years, it's inevitable that all of the players in this game will either have to deploy fiber at very least into the neighborhoods, or they'll have to throw themselves on their swords. My point, all along, hasn't been to "cheerlead" Verizon or AT&T, but to taunt the other players to try and match them. In the game we call our "economy", aggressive deployment of new technologies is rewarded, over the longer term, and those unwilling to forsake huge near-term profits for longer term vision tend to get steamrollered, eventually, by those who will.
Look back at the Railroads, the steel industry, whatever... complacency has never been rewarded. Only vision and ingenuity are rewarded. Look at our auto industry, floundering, because they're holding fast to an outmoded business model. They're being passed up as though they're standing still by the European and Asian automakers, because the competition is offering the latest and greatest, and is willing to take risks in marketing and design. In the long run, and assuming they can meet the challenge, it's going to improve the American companies. It's going to make them compete, and offer what people want, rather than what seems most profitable in a short term analysis.
That's the problem, in America, with tech... we model it after the old Detroit concept, of milking the last drop of profitability from a design, before we incrementally step up to the next generation. On a month-to-month basis, that seems quite logical, money's made, risk is minimized... but, in the long term, assuming risk is the only way of remaining viable. Someone will always be there, someone who has no established record, someone with little or nothing to lose in the risk equation.
That's what's built America into the technological powerhouse we've been for the last century. When Teddy Roosevelt broke the monopolies, America surged... not that year, not next year, but over the course of the century. He could have sat back, and enjoyed a "here and now" windfall from the monopoly stagnation at the turn of the last century, but he recognized that we could all be enriched, into the next generation, with the fetters removed, and with a free market demanding innovation and growth, rather than complacency.
Grow... build... dream! That's it... that, really, is all there is!  -- Semper Eadem --
Dreams unwind. Love's a state of mind. | |
|  |  | | My money is going to be on anyone with neutral business philosophies that are willing to deploy a large enough pipe. This premise completely eliminates the telco and cable operators as they seek to abuse their consumers as the frustration-based only-solution to IPTV compatition by Indie IPTV operators that own no network infrastructure. | |
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 gheezerCompooters R UsPremium join:2002-12-20 Henrietta, NY 1 edit | Is the site still named "broadband" reports? Or have you changed your name to "I personally hate Cable".. Reports?
Biased commentary put forth as if it were real news?
Do the world a favor, and exercise some integrity at the same time...Label your commentary editorial please.
But then again...it's your site.
(personally, as a Cable professional, I favor land line TV programming competition...maybe then the old argument that the key networks are gouging YOU will finally be heard....they are the sole reason A-La-Cart is still too expensive for the consumer) -- Join the NAVY, see the world....It's mostly water! | |
|  |  | | Re: Is the site still named "broadband" reports? Jeez, they post one article every few days that's not cheerful towards cable companies and you think they hate cable? How about the almost daily articles on how AT&T want to block traffic(even though they don't), how BellSouth is screwing Louisiana(Even tyhough they aren't), and how Bell isn't deploying fast enough. | |
|  |  |  dvd536as Mr. Pink as they comePremium join:2001-04-27 Phoenix, AZ kudos:4 | Re: Is the site still named "broadband" reports? I like cable. my next option is QWORST(qwest dsl)  | |
|  |  |  | | I'm paid to spin things in favor of the large cable companies. | |
|  |  |  |  | | Re: Is the site still named "broadband" reports? I don't believe that. I know you have your biases same as anyone but I'd be a loon to suggest there's some financial incentive. | |
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 |  | | I'm paid to spin things in favor of the large telcos. | |
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 | | cancellations flowing Word is, here in Texas, is that the local Comcast facility to return boxes for customers who are cancelling are having to wait awhile, due to having so many people cancel, due to fios maybe....... | |
|  paisp join:2004-02-16 Newtown, PA | Allow me to explain the threat... I bet the cablecos didn't tell the investors that even with the telcos having 1% of the video market, they will make WAY more profit than the cablecos will be making off telephone with their 8% market share.
THERE IS NO MONEY IN TELEPHONE ANYMORE. BUT THERE'S A TON OF MONEY IN TV SERVICE!!
My guess is when speeds get high enough and the broadcasters realize they don't need cable or telco to reach the customers (they can sell direct via Internet) all these companies will be reduced to a small pile of ISPs. Who knows! | |
|  |  fiberguyMy views are my own.Premium join:2005-05-20 kudos:3 | Re: Allow me to explain the threat... I doubt what you say..
There is more profit in Voip than there is in traditional landline based switch telephone service.
Compare the cost of operating a switch vs. voip based call routing, and I think you will find it's less expensive.
There very much is money in telephone if done correctly.
Even if speeds get high enough, remember who still owns the pipes. I do believe that television will converge with internet and telephone, and it will happen in our time.. when? Who knows.. 10 years? I think that's reasonable.. 20 years to more perfection and more of a standard I would thing.
Ultimately, one thing remains.. in order for ANY wireline service to remain in the black and operational without any governmental handouts, a certian price point per home/user will have to be reached. Elimiate the TV side for cable all together, or phone side for telco and watch internet prices sky rocket. | |
|  |  |  paisp join:2004-02-16 Newtown, PA | Re: Allow me to explain the threat... said by fiberguy:I doubt what you say.. There is more profit in Voip than there is in traditional landline based switch telephone service. Compare the cost of operating a switch vs. voip based call routing, and I think you will find it's less expensive. There very much is money in telephone if done correctly. Even if speeds get high enough, remember who still owns the pipes. I do believe that television will converge with internet and telephone, and it will happen in our time.. when? Who knows.. 10 years? I think that's reasonable.. 20 years to more perfection and more of a standard I would thing. Ultimately, one thing remains.. in order for ANY wireline service to remain in the black and operational without any governmental handouts, a certian price point per home/user will have to be reached. Elimiate the TV side for cable all together, or phone side for telco and watch internet prices sky rocket. Good point, but I see it this way. Anyone can put together a VOIP company and because the costs can be reasonable to do so, there's always going to be someone to sell cheaper than the next guy... and some even free if you listen to an ad or do some other chore in lieu of payment.
Video, conversely, has several barriers to entry. Franchise agreements and deals with content providers such as Disney, etc... it makes it hard for just anyone to jump in. So the few who can make it happen will control that arena. Think about it now.... you can have Internet and VOIP for pretty cheap. But that damn Sat or Cable bill is still up there, and is not coming down.
There's plenty of fat in the video bill and nobody's looking to reduce it.
Same with Cell service. Any average "joe" can't afford to occupy every tower, so the few who can aren't looking to devalue the market anytime soon.
My opinion is that there is no profit in Internet connectivity or phone anymore (the dime a minute days are over). But, video and cell... that's the biggies and for cable companies to have picked on those sleeping giants such as Verizon (who have like 80+ billion in the bank), dumb move. | |
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 |  | | When speeds get high-enough those telco network providers will abuse their customers by not being network nettral. This abuse will result when cable operators, satellite operators, and non-middlemen start offering anyone IP-based television and those telco operators start blocking/degrade Internet websites that compete in the video market.
This will, in turn, result in those telco customers leaving them for more friendly, and neutral, providers. I know I would. And if the telcos were making so much profit then BellSouth wouldn't be selling itself to SBC, and Qwest wouldn't be looking to be gobbled up like a value meal by Verizon. | |
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 | | Which is to say, The rollouts are too slow. Even Verizon's rollout at the cost of billions of dollars every year will only take 5% marketshare per year which barely makes a dent in the cable companies marketshare because Verizon is more likely to get customers away from satellite than another cable company (for video). By the time any cable company is in danger of losing more than 20% of their markets due to broadband or voip.. cable companies will have technological upgrades and co-marketing/branding with wireless and low cost (and free/adbased) internet based media to compete with telco. So, when all is said and done. Telcos will be finished warming up around halftime... (10-20 years) at current pace. Many major projects away from Verizon (att/bellsouth/qwest) haven't gotten off the drawing boards and press-release wet-dreams yet. You can include in this the second ambitous plan: project lightspeed. | |
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