4 ms·

The death knell for the cable companies will be when something challenges their virtual monopoly in high speed Internet. Considering that younger people tend t

The death knell for the cable companies will be when something challenges their virtual monopoly in high speed Internet. Considering that younger people tend to watch sports in a different manner than previous generations (more smartphone / social media oriented, according to this study -- https://www.mckinsey.com/industries/media-and-entertainment/our-insights/we-are-wrong-about-millennial-sports-fans https://www.mckinsey.com/industries/media-and-entertainment/...) I suspect that even sports is not going to be a saving grace for traditional cable. With 5G coming up and the possible promise of WISPs, fiber, satellite, or other technologies people are exploring to bring fast broadband outside cable, that death knell might be sooner than later. For power, utilities are heavily regulated by the state, which might mitigate some of this "death spiral" to some extent. But, yeah, they do have that same issue of cable companies of being heavily invested in a legacy hardware network. That being said, one counter example that comes to mind is the old copper-wire analog phone systems. In the US, most of the old Ma Bell monopoly transitioned to a more mobile oriented business (Verizon or AT&T) over time. Landlines have been on the decline for the last couple decades, but my impression is that the telephone companies were able to adapt instead of getting caught out for the most part, or trying to play legislative-bully against mobile. In contrast, the cable companies (my impression again) seem to be resisting technological trends and trying to use legislative strong-arming to sustain their business model, rather than reforming (their legal fights against muni broadband being a good example here). I do not see this as working long-term, at all. Unfortunately my impression is that the power companies are more comfortable emulating the cable companies (fighting to make solar power less viable to consumers for instance) instead of transitioning business models gracefully...

cletus 9y ago
This is a debate in the industry with wide-ranging implications. It basically boils down to will we have a wireless future as the primary means of Internet delivery or will we not? And there's no clear answer. Sure 5G (even 4G) is fast but could it handle, say, all of Manhattan using it with no fixed line Internet? I have my doubts even with the 5G focus on concurrent connections. Or if it could it may just suck a lot of the time. Wired (particularly fiber) has many distinct advantages: 1. The lifespan of the infrastructure is like 30-40+ years, possibly much longer; 2. Once you have the fiber in place it's pretty easy to change the lasers at either end and boost the speed, likely to 10Gbps+ if required; 3. Fiber unlike wireless doesn't suffer from interference and the amount of data you can get down a conduit with all the fiber strands you can fit is simply gigantic. But of course wireless doesn't have the massive upfront capex cost that a fixed-line network does. As much as people (reasonably) deride the US cable industry, high speed Internet pretty much exists in the US because of riding the coattails of the infrastructure that was built in the latter part of the 20th century. Who knows where we'd be without it? If you had to build that infrastructure from scratch today the cost would be astronomical. This isn't unique to cable or telecommunications either. It seems like in virtually every Western country the cost of infrastructure has ballooned to the point where many things that exist now would just be uneconomical to create now (eg rail and subways in major US cities) and that's going to be a huge problem going forward. Of course this isn't a binary problem. The future may be a hybrid (eg wireless last-mile). As for your point about cable companies fighting competition at the regulatory level, absolutely true. It's not a simple issue however. As much as cable companies are desperately fighting commoditization (they don't want to be the provider of dumb Internet pipes), an overbuild with a fixed-line network doesn't make much sense either economically. It's why we only have one water network, one gas network and one electrical grid (per region; many in the US have this deluded view that regional monopolies are somehow "competition"). It's also why utilities are highly regulated as they are monopolies. It's also why ISPs need to be regulated as a monopoly. Internet is the so-called 4th utility. But this regulation will prevent naked price gouging. It will however impact the cost per kWh and ultimately regulators will have to relent to let them raise prices to cover costs.

cletus 9y ago

This is a debate in the industry with wide-ranging implications. It basically boils down to will we have a wireless future as the primary means of Internet delivery or will we not? And there's no clear answer. Sure 5G (even 4G) is fast but could it handle, say, all of Manhattan using it with no fixed line Internet? I have my doubts even with the 5G focus on concurrent connections. Or if it could it may just suck a lot of the time. Wired (particularly fiber) has many distinct advantages: 1. The lifespan of the infrastructure is like 30-40+ years, possibly much longer; 2. Once you have the fiber in place it's pretty easy to change the lasers at either end and boost the speed, likely to 10Gbps+ if required; 3. Fiber unlike wireless doesn't suffer from interference and the amount of data you can get down a conduit with all the fiber strands you can fit is simply gigantic. But of course wireless doesn't have the massive upfront capex cost that a fixed-line network does. As much as people (reasonably) deride the US cable industry, high speed Internet pretty much exists in the US because of riding the coattails of the infrastructure that was built in the latter part of the 20th century. Who knows where we'd be without it? If you had to build that infrastructure from scratch today the cost would be astronomical. This isn't unique to cable or telecommunications either. It seems like in virtually every Western country the cost of infrastructure has ballooned to the point where many things that exist now would just be uneconomical to create now (eg rail and subways in major US cities) and that's going to be a huge problem going forward. Of course this isn't a binary problem. The future may be a hybrid (eg wireless last-mile). As for your point about cable companies fighting competition at the regulatory level, absolutely true. It's not a simple issue however. As much as cable companies are desperately fighting commoditization (they don't want to be the provider of dumb Internet pipes), an overbuild with a fixed-line network doesn't make much sense either economically. It's why we only have one water network, one gas network and one electrical grid (per region; many in the US have this deluded view that regional monopolies are somehow "competition"). It's also why utilities are highly regulated as they are monopolies. It's also why ISPs need to be regulated as a monopoly. Internet is the so-called 4th utility. But this regulation will prevent naked price gouging. It will however impact the cost per kWh and ultimately regulators will have to relent to let them raise prices to cover costs.