They are at it again. Paul Allen buys another small cable system while Microsoft finds another sand box to play in outside the US. Since Gates 1 billion investment in Comcast, the landscape has changed significantly and the cables aren't in such a hurry to take dollar Bill's cash. With alliance deals for long distance and local service with AT&T and the proliferation of money generating services and technology, Microsoft had to go to the UK to find another cash strapped cable company willing to take it's money in return for equity. The $500 million investment in NTL marks their second entry into cable. Unfortuately for Microsoft, their co-founder Paul Allen has no public shareholders to worry about as he builds his cable empire and invests widely in broadband technologies and services.
DSL is coming and they will compete. I think they will be less effective, have less performance and be lagging in their deployment. However, there are more businesses humgry for high speed access that are not wired for cable yet. DSL should make the largest gains in the internet access arena. For the moment, the smart money continues to bet on the best delivery pipe to the home where telecommunications, entertainment and data (internet) delivery will provide massive revenue opportuntiy.
There is tough talk on Capital Hill regarding regulation of the cable broadband network. Why? Because it is so good that it will hurt a lot of companies from ISP's, search enginges, entertainment companies and telco's. When ever somebody is gonna get left in the dust, they seek government intervention, usually at the cost of technological advance and consumer benefit to protect the laggards. The MSO's for their part realize that commiting fully to an IP based video model would allow any ISP to pump bandwidth hogging video through their plant. The current VOD model protects this valuable service in the event that the pipe is opened to competitors at a fee in the future. The current VOD model is both technologicaly and politicaly wise.
Kagan just released a massive VOD study. Supposedly the most comprehensive study ever done on the subject. They are charging $1,000 for the report if anyone is interested. Looks to be quite a bullish piece and covers all angles from different technologies and business models to deployment strategies and market factors. |
