To Get to Its Promising Future, Cable Must Deal with the Difficult Present

Carl Weinschenk

The cable industry, which held its annual conference in Washington, D.C. from April 1 to 3, is facing short- and long-term challenges. The most immediate problem is that, like every other industry, it is dealing with a terrible economy. In the longer term, it is adjusting to a world in which its core business-a near-monopoly on the distribution of entertainment video-just ain't what it used to be.

 

One of the most interesting telecommunications issues of the current era is who will win the battle between cable operators and telcos. It also was one of the most interesting issues of the last era. Cable operators are building in more fiber, but continue to rely on the coaxial cable for entry to subscriber premises. There are many ways to skin this cat, but virtually all operators agree on that basic premise. The industry still faces the challenge of integrating wireless comfortably into its repertoire. It must be harder than it seems, because previous attempts have ended up far short of the mark.


There seem to have been some interesting presentations in D.C. This session-"Cable Technology and the Platform for Change"-was dominated, according to Cable Digital News, by talk of projects that are under way. The writer suggests that the tone was not to focus on the future, but to stay firmly rooted in projects that are going on today. That, of course, was a nod to the bad economy. The writer says that Comcast discussed the mileage it is getting from its "analog reclamation project." Though the technology is not described in great depth, the context makes it clear that the initiative is comparatively simple and low cost.


One way to deal with advancing demand is to increase capacity. The other, which could be called counterproductive or even reactionary, is to limit access. Some operators are taking that approach. Ars Technica reports that a trial in Texas by Time Warner Cable succeeded and is being replicated this year in Austin, San Antonio, Greensboro, NC and Rochester, N.Y. The TWC plans range from $30 to $55 per month and offer 5 GB, 10 GB, 20 GB or 40 GB. The writer calls this an "abysmal deal" compared to offerings from Comcast and AT&T. The telco has download restrictions.


The writer is openly skeptical of TWC's stated rationale for the restrictions, which is that infrastructure is expensive. For one thing, he points out that not much new infrastructure actually is being built. Instead, he speculates that instituting caps is a way to push its video services. The reasoning is that folks are only likely to exceed the caps by downloading copious amounts of data, such as high-definition videos and similar content. TWC's video arm, which of course offers the same programming, is not covered by the limits and, therefore, may be more attractive to users.


A big issue going forward is how the industry is going to move into wireless services. It hasn't done so in a meaningful way, and the emergence of 4G services will be its last, best chance. This piece-from a panel entitled "Air Play: Cable's Wide-Open Wireless Future"-looked at the approaches of TWC, Cox and Cablevision. Time Warner, the piece says, sees wireless most fundamentally as a way for operators to stay connected to customers once they leave their homes. Cox will dip into the spectrum it acquired in the 700 MHz auction that concluded last year. The piece doesn't say specifically what the operator will offer, but said that it plans to market under its own name. Cablevision's take on wireless is the most evolved. It is in the midst of blanketing its service area with Wi-Fi and providing access as a value-added service to its subscribers.



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