October 2009

In the broadband battle, cable operators were the early leaders, boasting faster speeds than the DSL service offered by their telco counterparts. However, as the telcos launch their ultra-fast fiber-to-the-home (FTTH) services, such those offered by Verizon and AT&T in the U.S.; FastWeb, Telefonica, and TeliaSonera in Europe; and Korea Telecom and PCCW in Asia, cable risks falling behind, hampered by its bandwidth limitations. DOCSIS 3.0 promises a way for cable operators to counter the telco threat by providing faster speeds to the end user—up to 160 Mbps downstream and 120 Mbps upstream—offering a more cost-effective approach for cable operators to compete and win against FTTH service providers with ultra high-speed data delivery. However, long-term success depends on going beyond competing on speed and focusing on using the extra bandwidth to create truly compelling offerings. DOCSIS 3.0 can help cable operators take that step by providing not only the necessary bandwidth, but the opportunity to truly differentiate their services by delivering high-definition digital entertainment and broadband services. However, without proper management DOCSIS 3.0 threatens to cannibalize existing cable revenues, as television networks explore over-the-top Internet distribution deals with content delivery networks or deliver content directly via the Internet. It also threatens profit margins, as the marginal cost of adding network bandwidth will not be covered by the marginal revenue. To take advantage and fully leverage new network technologies and opportunities, MSOs need to look at their existing OSS and billing environments and assess whether they can support these next generation services. Cable back office systems have historically been heavily customized, often in-house solutions that were generally developed to address a specific service or geographic region and designed to support static services billed on a flat-rate basis. Transforming these systems to support a new business model is a complex and challenging undertaking; however, those operators that succeed in this effort are rewarded with increased revenues, reduced operational costs, and stronger customer relationships.

In 1949, the Department of Agriculture's telecommunications loan program was established to provide telephone service to rural America. At the time, only one in three farms had access to telephone service. As it did with the rural electrification program, the Telephone Loan Program revolutionized the lives of millions of rural families and businesses by providing connectivity, access to emergency services and business activities that fueled economic growth. Today, Rural Utilities Service (formerly REA), provides loans and grants for telecommunication, electricity and water and environmental services. It is also administering a program, funded through the American Recovery and Reinvestment Act, to provide broadband service to underserved communities.

[Commentary] The idea that "content is king" is a favorite slogan among media people, since it's comforting to think that the industry is ruled by its creative side. Comforting, but fictional. Who does rule the media kingdom? Not the content creators, but the people who control their physical access to the public, that's who. Sooner or later, channels trump content. That's why people who care about freedom of expression have to start by caring about the freedom of the channels over which expression flows. Hence the importance of the simmering controversy over so-called net neutrality -- a policy that is intended to keep the companies that rent us access to the Internet from playing favorites among Web services, information exchanges, content providers of all kinds. Why does that matter? Because the pace and direction of media development have been historically set by the people who controlled the contact points with the public.