When Will Cable Start Shifting Bandwidth Away from Video and to Internet Access?

If an Internet service provider’s highest-margin product is projected to have demand growth of an order of magnitude growth, or more, while other products with lower profit margins are declining, should we not expect more bandwidth to allocated to the fast-growing, highest-margin service?

Internet bandwidth, despite all worries about the “dumb pipe” implications, is the highest-margin product most ISPs can sell. And while the strategic implications are different for telcos, cable operators, satellite, mobile and other ISPs, at least for cable operators, it will make sense to shift network bandwidth to Internet access, while allocating less for video entertainment. Among other things, that could in the future conceivably mean a bigger shift to “switched” or “on demand” video, more fiber, closer to the customer and significant changes in the volume of channels offered to end users. One issue is precisely how high profit margins might be, for various providers.