In competition with DSL, the cable industry has traditionally tried to pass off DSL as an inferior product in order to justify a higher price-tag. Publicly, cable execs have been similarly dismissive of the telco's next-gen upgrade plans in order to buoy skittish investors. They've also tried to laugh off the threat posed by broadband video.

Privately of course, they're well aware of the damage projects like Fios can cause to their bottom lines, and are closely watching the flurry of emerging video solutions. Techdirt points to an internal study cited in the WSJ that says the cable industry needs to be ready for another round of multi-billion dollar network upgrades.

The report claims that at the present growth rate, existing cable infrastructure may not be able to effectively compete with Verizon Fios services. "At some point, optimization of the (cable) network becomes more expensive than simply deploying" fiber directly to homes, the CableLabs report warns.

The larger industry, which disagrees that existing networks can't scale, is ironically waiting on CableLabs to solidify the DOCSIS 3.0 standard, which will be the cable industry's answer to FTTH.

Standing directly in the shadow of Fios deployment, Cablevision is competing rather cheaply at the moment, on last estimate spending $715 to pass and serve a home to Verizon's $1,800. Of course they have much more infrastructure already in place, and therefore can more slowly nudge fiber towards the customer.

Verizon is the only major telco planning significant fiber to the home deployment. Even with their ambitious $20 billion plan, it's doubtful they'll have Fios available to 50% of their existing DSL subscribers in the next five years. AT&T's top speeds in the near future sit at 6Mbps, while Qwest cherry picks only lucrative developments.

While fiber is the answer, sluggish upgrades by most other telcos and more existing infrastructure means the cable industry has ample time to develop and deploy DOCSIS 3.0.