The 'Dumb Pipe' Video Model

Leaders of several small cable operators at the American Cable Association conference are OK with the cable industry evolving to provide access to a "dumb pipe" that delivers video from broadband-based over-the-top (OTT) firms or other outside providers.

"That [OTT] business model is probably better than the economics of our current video business," Wave Broadband COO Steve Friedman said. Friedman and other executives pointed to the high cost of sports programming and contracts with programmers that offer little flexibility in explaining why it may be more profitable to sell access to programming distributed by another provider. Cable ONE Inc. CEO Tom Might warned that cable operators would also have to charge subscribers based on the amount of bandwidth they consume if the industry transformed into a dumb pipe business.