Some great insights from others on the thread--I appreciate the comments/opinions and need to digest them a bit...
Frank Coluccio: I haven't a clue as to what it would cost to implement cable telephony, but my intuition says that it will be at "incremental" cost (financial, people, etc.) above the existing cost of upgrading the cable plant for broadband anyways. A D/A converter will likely be built into the cable set-top box so that the existing installed base of telephones can be used, as well as a digital out jack.
Grace Zaccardi and Teflon, et al.: Agreed that MSFT should not be counted out. MSFT currently has its share of regulatory problems, however--I don't think that MSFT wants to push it. Perhaps T could give MSFT an "in" at the s/w platform level.
Can anyone answer/confirm the following key question: What MSFT technology, if any, is currently being deployed for RR and ATHM? The effective minor stakes in RR and CMCSA/K leads me to believe that MSFT is purely a financial player at this juncture--they have enough of a stake to keep abreast of developments in both camps.
ahhaha: As for FTC and all other regulators, I don't think that they're exactly the most forward-looking gov't agency (oxymoron). If the existing telephony subscribers of a combined T/TCI/UMG/TWX amounted to 28% of all telephone households (cable telephony and traditional copper), that'd be a totally different picture. Cable telephony, and in a larger context broadband cable, isn't a factor...YET. I don't think the regulators have grasped that vision.
In my mind, T did buy TCI for ATHM as well as TCI's network (not the quality of the network, which is behind the others', but for that direct connection to the customer); T buying UMG is slightly different--there are two benefits: 1) TCI acquires 5MM households; and, 2) T stops RR in its tracks (Wil E. Coyote would've fallen off a cliff a hundred times to see this) or at least limits RR's expansion, as UMG accounts for nearly 40% of RR's current broadband cable subscribers (100k as of end of March).
What are the other consortia that you refer to that have the financial fortitude and desire to step in at this point? It's possible, but without any suggestions, the only one that immediately comes to mind is AOL, but it's a real long-shot--that'd be a wild scenario. Imagine, an AOL/TWX/CMCSA/UMG. Gotta lay off the airplane glue.
As for the various defection scenarios, perhaps it can be averted if T shares a bit more economic ownership with the others, i.e. CMCSA/K, COX, and CVC. T certainly won't offer it upfront, but definitely a way to provide incentive to stay with ATHM (similar to employee stock options--in fact, that's what seems to be what the backlash might be about--in the grand scheme, CMCSA/K, COX, and CVC are merely working for T/ATHM).
All others: I shouldn't jump to the conclusion that T will convert UMG's RR to ATHM (assuming that T acqs UMG)--though it's likely that T will divest itself of RR to avoid any superficial appearance of a potential future cable broadband monopoly. It'd be an easy "give-in" to the authorities. Also, not sure if systems are completely intercompatible. |
