The Cable Industry Takes on the New Enemy

Carl Weinschenk

The cable television industry held its annual engineering conference, Cable-Tec Expo, in New Orleans last week. Amid the po' boys, etouffe and jambalaya, the industry continued a process that has been ongoing, in one form or another, for the past two decades.


Once upon a time, cable was discrete from the rest of the world of telecommunications. It dealt with consumers and not business, championed the strange concept of large-scale wired video distribution and used technology that was more or less unique.


In the 1990s, changes in the laws, regulation and technology made it possible for telephone companies and the cable multiple service operators (MSOs) to attack each other. And attack they did. Cable became a player in the telephone game-and a good one-while the telcos, through Verizon's FiOS, AT&T's U-verse and other projects, became video players.


Thus, the cable industry went from being a lone prospector mining the incredibly rich lode of entertainment video to a successful, but besieged industry that shared many of the same technologies and vendors-and offered many of the same products-as its nemesis.


The next stage, which clearly was on display in the Big Easy, also has to do with adapting to new competition. In this case, however, the situation is not as cut and dried. Cable operators' second major foe-or third, if the development of the satellite industry in the 1990s is counted-is over-the-top (OTT) providers who deliver programming to any IP-connected device over broadband.


This is a more insidious enemy. Telcos, by and large, are trying to replicate what the cable operators do in video, while cable tries to be a phone company. Both have big back-office infrastructures and brick-and-mortar offices. They have big balance sheets and spend money in Washington like drunken sailors. They are about triple- and quadruple-play bundles. They are, for all intents and purposes, Ford and Chevy or Coke and Pepsi.


The OTT providers are not full-menu providers. They have no local presence. All but a handful are small potatoes, and even the noteworthy providers-such as Hulu, NetFlix and YouTube-are one-trick ponies. They exist in the very different world of online, and rely more on consumers knowing what they want and seeking it from them.

While the cable industry fears that the OTT providers represent a real threat, its engineers are struggling to integrate the best elements of the underlying Internet protocol (IP) platform into their tool chest. A good deal of the conference, which is presented by the Society of Cable Telecommunications Engineers, dealt with cable operators' use of IP for program distribution. This is especially important as MSOs seek to deliver programming to PCs and mobile devices.


IT managers and telecommunications planners should keep an eye on cable and IP delivery. The industry has always had a toe in the enterprise market, and some operators are significant players in the small- and medium-size business sector. How these companies use-or bypass-the Internet is an clue on their overall attitude and thinking.

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