Broadband Library is a quarterly publication that goes to all members of the Society of Cable Telecommunications Engineers (SCTE). Since early 2007, we have been writing a column called "Two Sides to Every Story" in each issue, using opposing pages to present conflicting viewpoints on a cable/telecom industry topic.
The current issue will be posted here when the following issue is distributed to SCTE members. To read the first part of our most recent dialog, click for Sandy and Dave. To receive the full copy of each article, you'll need to join the SCTE.
Our columns from earlier issues are listed below in reverse chronological order - most recent first.
Spring 2008 Issue (March 2008--current)
In the current Spring 2008 issue, we discuss recent moves by the cable industry toward tiered pricing after many years of selling broadband services at a flat monthly rate.
Arguing that the MSOs should never have promised "unlimited flat rate", Dave describes how Prodigy fell into the same trap and then tried to change the pricing structure: "Having started with a strong and successful 'flat rate' message, Prodigy lost the confidence of many of its early users, who felt they were doing exactly what the pricing plan encouraged them to do. They left Prodigy for other online services, and soon moved to Internet service providers offering unlimited plans . . . . MSOs now face the same dilemma as Prodigy – how to limit the impact of the heaviest users without antagonizing the rest."
Sandy says flat rate pricing was necessary at the birth of the broadband industry: "If MSOs had launched using usage-based pricing schemes, the uptake of cable modem service would likely have been substantially slower. The broadband market would have grown slower and MSOs would probably not have achieved their early market lead. . . . [O]perators need to get more revenue from users who impose heavy demands on network resources at peak load times. The challenge will be to develop mechanisms that give customers increased value for paying more, don't run afoul of public policy considerations, and don't chase the most loyal and profitable customers into the waiting hands of the competition."
Reflecting on our early experience with broadband, our column in the Winter 2007 issue discussed our different views of the role the cable and telephone industries would play in the evolution of broadband services.
Dave was Prodigy's director of R&D from its formation in 1984. From the beginning, he "believed our service would have to include pictures, sound and video to be competitive with magazines and television. . . . [W]e’d need much fatter pipes to deliver competitive digital services." In late 1993, he led the first residential cable modem trial. Shortly after leaving Prodigy at the end of 1994, he participated "in several meetings where telephone companies discussed what they might do to respond to high-speed services delivered by cable companies. . . . [T]he senior telephone technical executives all agreed that the cable plant couldn’t carry reliable high-speed services."
Sandy was at AT&T from 1977 until early in 1996, mostly in corporate strategy. She said Dave thought "the cable plant could be the ideal path for transmitting pictures and sound to personal computers in people’s homes and how that could transform the way we shopped, banked and were entertained at home. I was not persuaded. I thought it was more likely that giant AT&T, with all its resources, would be the place to create such a large-scale transformation." A decade later, she observes "The old AT&T didn’t do it, but cable has some real competition from the new one. With telco video services a reality, mobile becoming part of the game, and revenues for advertising and interactive services as the next battleground, it looks like the next few years will not be boring."
In the Fall 2007 issue, we debated whether networked PC video has become a major threat to MSOs.
Dave said "the elements are now falling into place for the PC to play a major role in home video. Over time this threatens to reduce MSOs’ revenue from cable video entertainment and increase their costs for high-speed Internet services. . . . MSOs are likely to lose subscription video revenue to these new video entrants. . . . [L]arge numbers of users connected to streaming video will require large investments in channel capacity and Internet infrastructure without generating new revenue."
Sandy disagrees: "[V]ideo to and through the PC won’t be a major threat to MSO’s video business any time soon. Consumers desire video quality, simplicity and ease of use. Their deeply-ingrained habits don’t change overnight." She said "MSOs have time to watch and understand what’s happening in the market. . . . [J]ust because something is technically possible . . . doesn’t mean that everyone will be doing it next week."
In the Summer 2007 issue, we debated whether or not cable operators should participate in the metro Wi-Fi market.
Sandy said "Mobility represents a whole new ballgame for MSOs. . . . [T]here are convincing arguments for cable operators to bid on these metro Wi-Fi installations and include metro Wi-Fi as part of their mobility mix." She concluded "The metro Wi-Fi opportunity is on the table now. MSOs should play in this game."
While Dave agreed that "Metro Wi-Fi certainly sounds attractive", he cautioned "[N]obody has figured out how to make money on it." He concluded "Metro Wi-Fi represents a diversion of MSO effort when things that can make money . . . need all the technical resources they can get. There’s no need to do metro Wi-Fi now. Better to wait until the technologies settle down and the business model makes sense."
Our first column—in the Spring 2007 issue—debated the reality of the broadband home.
Dave said "The world we envisioned seven years ago is nearly here. All the key technologies for the Broadband Home are available and the market is growing rapidly." He concluded "Soon we . . . will finally be able to enjoy all the benefits of the Broadband Home we described seven years ago!"
Arguing the opposite side, Sandy said "I don’t want to feel like an idiot" and said right now it's much too hard to hook up and use these devices, "especially those involving connection with HD video. . . . We know that the industry is working on solutions to many of these problems and fervently hope they will come soon."
