Cable Vs. Telco, Round Two: Customers Win Again

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If there still was any doubt, the actions of the phone companies and cable operators confirm that the future lies in sophisticated and bandwidth-intensive convergence applications.

These folks aren't dumb, and they certainly don't spend a penny if they are not darn sure they will earn a nickel in return. It's already well established that the telephone carriers -- particularly Verizon through its FiOS project and AT&T with its Lightspeed initiative -- are deploying fiber in big batches.

Now, it is cable's turn. A few years ago, the cable industry figured that it had all the bandwidth it needed. This spate of reports says that the cable guys are no longer so sanguine about their status. A number of things are making them look for ways to juice up their infrastructure. YouTube and other services are changing the focus to bandwidth-hungry video applications, customers are pushing for more high-definition channels and the younger generation -- oh, those kids -- simply are broadband mavens. The need for bandwidth, in short, is inexhaustible.

It seems that the industry has some vibrant options. The possibilities are best summed up in this Cable Digital News piece. The industry still is in good shape because the last (or first, depending upon the way in which the data is flowing) few yards of wiring is high-capacity coax. The changes are to the massive infrastructure supporting that last little bit of conduit.

This is all great news. At the highest level, it proves that the demand for bandwidth is real and expected to grow. On a more practical note, the more these sectors compete, the better and cheaper services will be.

This has all happened before. The cable industry started the 1980s woefully behind the telephone industry. It surpassed its rival in its last growth spurt by rolling out then-futuristic hybrid fiber-coax (HFC) technology without ripping out much of what existed at that point. The phone companies responded with fiber. We expect cable to adjust again -- and hope that the two industries play this game of "can you top this" for decades to come.