>>>The cable companies are going to invest enormous amounts of cash on new infrastructure and @home does not bear any risk...it just sits back and collects the profits. Yeah...that's the ticket!<<<
The cable companies would be positioned to profit greatly from success in cable modem Net access. They stand to retain 65% of subscriber revenue, with the remaining 35% going to ATHM. After the infrastructure is in place, @Home will handle the rest -- providing the service, technical support, maintenance, and all other concerns. So it sounds like a pretty tidy arrangment to me.
>>>Even if the cable companies get a good cut from each @home subscriber, I seriously doubt that they are jumping at the chance to spend even more money that they don't have to compete with the telco's.<<<
That is exactly my concern. Currently the greatest near-term threat to the cable companies is satellite broadcasting. Therefore, in order to better position themselves to compete, they must already invest in the build-up of their infrastructure to rapidly expand the range of their channel offerings. So considering their massive debt, there is obvious reluctance to increase these expenditures in the upgrading of the infrastructure needed to support 2-way infromation flow for Internet access. But there is another reason why this might be exactly what they MUST do at the same time they are investing in increasing their channel offerings...the satellite broadcasting companies are also investing in satellite Internet access services as a means for entering the attractive market of high-speed Internet access. This would provide them with a whole other revenue source that could help fund further advances into gaining cable tv marketshare. Cable companies must broaden their horizons to stay competitive.
Also, I don't see cable modem Internet access as competing with the telco's at all...the reason being that anyone considering cable modem, is likely most interested in high-speed access and performance at a competitive price. The telco ISPs offer measly standard modem speeds only now reaching 56Kbps. The ISDN alternatives are prohibitively priced at twice cable modem costs, for only a tiny fraction of cable speeds. High-speed Net access alternatives are in their own market. To say cable will compete with the current telco standard being built around 56K, is like saying the market for Ford Escorts competes with the Lexus LS400. I believe cable will compete with ADSL and satellite...but I believe cable will prevail because of highest speed, lowest cost, and the advantage of being present in 9/10 homes in America.
>>> Have you examined the balance sheets of companies like TCI lately?<<<
I agree...TCI serves my area (central FL), and is indeed heavily burdoned with debt like its peers. However, keep in mind that they do offer @Home cable modem services to 5% of their customers. So they ARE investing in the infrastructure necessary, regardless of the debt.
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