Subscribers the Winner of Cable/Telco Fights

Carl Weinschenk

The folks who work the streets for cable and telephone companies are tough hombres. A case in point: This Houston Chronicle story says that AT&T is suing Time Warner Cable because its workers trashed the telco's equipment in some San Antonio apartment buildings.

We don't know, of course, if the claims are true. Time Warner Cable didn't even comment for the piece. That said, this type of vandalism isn't unheard of among telecommunications companies. Indeed, other news reports suggest that it is becoming more common.

The reason for the increasing number of confrontations may be that there now are four theaters in the war between the two industries. The companies now battle daily over video, broadband data and VoIP. Wireless voice competition soon will explode.

We don't expect too large an increase in the kinds of activities alleged in AT&T's lawsuit. But we do think that the competition will cause marketing and price wars to heat up. The average subscriber doesn't care how cable or telcos deliver their service. They only see the final results. Since those results are so similar, the market will force the two industries to lock horns.

And the battle is just beginning. The tension between the two industries will be heightened even further by the emergence of small but undoubtedly annoying peripheral players such as broadband over powerline (BPL) and WiMax-based service providers.

This blog didn't start out as a New Year's resolution post, but in one sense it is: It will be wise to sit back and wait for good deals to present themselves. In an environment in which workers for the two industries are running around (literally) hacking each others' network, the savvy move is to wait until the marketers get involved and express their anger in a more constructive way -- such as cutting prices and adding features.

Granted, this may not be as exciting as tallying the damage one company does to the other's gear, but in the long run it will save your company a lot more money.

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