Telco Rivals Patient With Their Broadband Assault - Multichannel

Telco Rivals Patient With Their Broadband Assault

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As my favorite philomath Richard Saunders once explained: "He who can have patience can have what he will."

Telephone companies certainly have patience — and the money to spend, when they get around to it.

Hence, as if in some tortoise-and-hare scenario, a menagerie of slow moving, late-coming broadband providers are plowing into the picture.

Comcast Corp. and Time Warner Cable's Road Runner are still far ahead in the broadband race, but SBC Internet and Verizon Online are coming up fast in third and fourth place.

Indeed, of the 10 largest broadband providers, four are digital subscriber line companies (all of the surviving adolescent Bells), while the other non-cable provider is EarthLink Inc., a reseller that delivers via both DSL and cable.

Nibbling telcos

Perhaps more significantly, a variety of other telecom animals are nibbling their way into the broadband arena — with the encouragement of regulators, hardware vendors and patient real-estate developers, who would love nothing better than to put ongoing telecom revenue into their own pockets after they build new houses.

At last month's SuperComm telephone-industry extravaganza, video-on-demand and broadband facilities were the centerpieces of dozens of booths. Several vendors stressed that they are focusing exclusively on small, independent telephone companies and overbuilders. Their product lineup allows telcos and alternative providers to offer the triple play of voice, video and data.

And their customers — especially small-market telcos — are jumping on the video opportunity, largely in an effort to deliver video services (in addition to their current voice and data) before local rival cable operators can add voice to their core video and data packages.

"We would love to stick it to the cable companies," a network-technologies vendor (who understandably requested anonymity) told me. He said he's given up on selling into the cable environment, but is finding a slow-but-steady opportunity in the small phone company sector. His sales confirm it.

Admittedly, such bravura represents the hopes of desperate hardware vendors, bolstered by wishful thinking. But a variety of activities are fueling their dreams, as alternative carriers from SureWest Communications in Sacramento, Calif., to Twin Valley Telephone in Miltonvale, Kan., to Charlotte, N.C.-based FairPoint Communications roll out competitive broadband and on-demand services and Internet access.

At this month's Wireless Communications Association annual convention (formerly known as the Wireless Cable Association), the conference program and show floor were also rife with broadband expectations. Wireless Information Service Providers (WISPs) were on the prowl, despite technological limitations they face.

The vitality on the WCA's show floor exceeded the energy of the previous month's National Show, despite the much smaller scale.

Meanwhile BPL (broadband over power line, in Federal Communications Commission parlance) is taking shape in the wake of the FCC's April Notice of Inquiry, which will encourage another patient group — utility companies — to develop competitive broadband services. Like wireless providers, the power-line communications effort faces technical hurdles, especially signal interference from high-frequency transmissions through the same wires. There is no agreement that the FCC's current actions will create any breakthroughs, other than establishing an even more competitive environment for the front-running cable broadband operators.

And nationwide, the greenfields of the continuing new-home boom are encouraging real estate developer to plunge into telecom, especially as they pre-wire houses and install neighborhood networks. Some are allying with overbuilders or other broadband providers, often with the help of friendly local authorities.

Overconfidence

One of my favorite demonstrations of cable's broadband self-satisfaction came during a dinner at last month's NCTA convention. The gentleman to my left — a 30-year industry veteran, long-time pal and outspoken cable booster — firmly insisted that cable has won all broadband battles for all time, and deservedly so.

The man on my right smiled benevolently. He was also a veteran independent cable operator who now handles sales for programming networks. His current task is to sell his networks' channels to telcos, power companies and other alternative carriers. And he's a happy marketer, acknowledging that from his perspective, the small, outlying broadband providers represent a strong, growing market.

To finish as we started, let's refer to R. Saunders, who wrote in his Poor Richard's Almanack
for 1736, " 'Tis easy to see, hard to foresee."

In this case, the reverse may also be true. Today's alternative broadband solutions are almost invisible: Mere thousands of installations compared to the behemoth Comcast, Road Runner or Cox Communications Inc. broadband base.

But it is not very hard to envision that collectively, the new competitors, along with the much larger — and very patient — telco, wireless and utility company assault forces, are eager to change the broadband landscape.

Contributing curmudgeon Gary Arlen opines regularly for Broadband Week

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