Cox Won't Ride UTOPIA's Fiber

10:40 AM -- Video Armageddon will have to wait for another day. Cox Communications Inc. and Comcast Corp. (Nasdaq: CMCSA, CMCSK) won't be fighting for customers in Utah anytime soon.

Officials at Cox and the Utah Telecommunication Open Infrastructure Agency (UTOPIA) shot down a rumor that Cox has designs on delivering services via UTOPIA's municipal fiber network that counts 16 "member" cities, including Brigham City, Cedar Hills and Orem. Comcast and CenturyLink Inc. (NYSE: CTL) are among UTOPIA's primary incumbent competitors.

Reacting to news about a new video partnership between Dish Network LLC (Nasdaq: DISH) and UTOPIA, a blog that follows UTOPIA's doings tried to flesh out a rumor that Cox had some interest in becoming a member in UTOPIA if it could get at least 50,000 new customers out of the deal, noting that it's at least technically plausible because Cox's Las Vegas cable system happens to be where UTOPIA's fiber backbone terminates. (See Dish Links Up With UTOPIA.)

While that would be an interesting (and explosive) scenario for a private cable operator that might be looking for growth opportunities outside its traditional franchise areas, it's just not in the cards. Cox confirmed that it has no plans to enter Utah, and UTOPIA insists that it has "no plans moving forward" to hook up with the MSO.

Jesse Harris, who brought up the purported UTOPIA-Cox connection, acknowledged that the rumor goes back a bit, adding that similar rumors about UTOPIA and Embarq surfaced before the company was bought by CenturyLink. With Dish entering the fold at UTOPIA to create a video/broadband bundle, he expects other service providers to strike deals with UTOPIA. "It signals the long-term viability of the network and provides a sense of urgency to not be the last one to the dance," he writes to Light Reading Cable.

While I'll be surprised if Cox or another incumbent MSO looks to UTOPIA as their first off-net service play, I still think the idea Harris floated isn't necessarily far-fetched. As we've discussed here before, it's only a matter of time before incumbent MSOs obtain the kind of programming rights that will let them expand their pay-TV reach beyond their traditional franchise borders. However, I think they'll pursue that with pure over-the-top plays that don't require partnerships with those that are running the access network. (See Signs of the Video Armageddon and Comcast Won't Go Over the Top.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

joanengebretson 12/5/2012 | 5:39:35 PM
re: Cox Won't Ride UTOPIA's Fiber

The cable companies & the telcos seem to have one thing in common. Each industry operates as a sort of fraternity--and members of that fraternity seem to have an unspoken agreement not to compete directly with one another. A cableco competing against a telco is no problem, but competing against another cableco would be viewed as a sort of treaty-breaking.

Jeff Baumgartner 12/5/2012 | 5:39:34 PM
re: Cox Won't Ride UTOPIA's Fiber

Yes, it's a clubby environment, there's no doubt about it, but increasingly less-so as everyone comes to grips with the fact that they will someday compete with each other.  I think that's inevitable; just hard to say if it's going to happen in the next 1-5 years, or after. The MSOs will have new competition coming over the top one way or the other -- via a virtual MSO or an incumbent that has developed a virtual strategy to attack outside its own markets.  But it won't take much to set it all in motion. Who will fire the first shot that will spark the war that is to come? JB




RBR 12/5/2012 | 5:39:29 PM
re: Cox Won't Ride UTOPIA's Fiber

Sad part is the adherence to old guard business models is suppressing otherwise great opportunities.  Converging economic factors will eventually triumph though:  1) National MSO’s have greater purchasing power for content than small independents = virtual MSO will triumph.  2)  Consumer electronics, Cloud CDNs, and software giant’s all seek to “remake” TV = they are.  3)  The IP-Ethernet BORG is repurposing MSOs, Telcos and Wireless providers into sibling “Smart Pipes” = broadband is the principal source of margin and most effective use of capital (network over CPE).  4)  Markets cannot support upgrades for all four industries – wireless to 4G, HFC to next gen beyond 750, Telco to FTTH, new Muni or Utility competition = firstest with the mostest wins.  “And enterprises of great pitch and moment, with this regard their currents turn awry, and lose the name of action.” – Shakespeare, Hamlet, Act 3, Scene 1.  Were there ways to foster collaboration between the four industries, we’d all be Kansas City and part of a much larger pie.

Flook 12/5/2012 | 5:39:28 PM
re: Cox Won't Ride UTOPIA's Fiber

The article states: " However, I think they'll pursue that with pure over-the-top plays that don't require partnerships with those that are running the access network." But aren't the MSOs and telcos same guys who are exercized regarding OTT video from companies like Neflix over their access networks?

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