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Cable/Video

Report: Cable Still Beats DSL

Cable modems continue to outsell DSL access lines, giving cable operators a sizeable lead in the market for bundled services of voice, data, and video, according to a recent report from New Paradigm Resources Group Inc. (NPRG)

Over the past four years, the number of cable modem subscribers has outnumbered DSL access lines by a significant margin. While that doesn't mean DSL isn't growing fast (even faster than cable, by NPRG's reckoning), it raises the chance that cable providers will have a larger installed base from which to grow so-called "triple play" services.

What's more, it seems technology that supports video-on-demand (VOD) over the cable infrastructure (such as that announced by Internet Photonics Inc. yesterday -- see Internet Photonics Touts VOD) could boost this advantage.

Technology for adding VOD to DSL networks seems to be moving more slowly, an observation of other industry reports as well (see We Want Our Packet TV!).

NPRG sees the addition of VOD capabilities as potentially giving cable MSOs (multiple system operators) the means to offer triple-play services within three or four years -- about two years ahead of satellite and telecom providers, by the firm's lights.

There's just one catch -- telephony. NPRG indicates there's evidence that today's leading cable MSOs, including Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Inc. (NYSE: TWX), Charter Communications (Nasdaq: CHTR), and Cox Communications Inc. (NYSE: COX) -- which collectively owned over 65 percent of the cable market in 2002 -- aren't showing a high percentage of telephony or data customers.

In 2002, just 16 percent of 70.1 million cable subscribers had cable modems for Internet service; just 3 percent had IP telephony from their MSO, according to NPRG's report.

— Mary Jander, Senior Editor, Light Reading

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lastmile 12/5/2012 | 12:19:37 AM
re: Report: Cable Still Beats DSL 'Triple play' is the name of the game. The RBOC's continue to fight for copper. That obsolete infrastructure gives them revenue because consumers like me are lethargic and are unwilling to adapt to the benefits of one source for all their needs.
When people like me wake up then the RBOC's will try to convince me to stay with POTS. The only way the RBOC's can compete with cable is by offering a service that is better than cable. The better(and best)triple play is FTTH. But FTTH is expensive so the RBOC's will never attempt to compete with Cable. Catch 22!
ramiral 12/5/2012 | 12:19:36 AM
re: Report: Cable Still Beats DSL Actually, FTTH isn't necessary as twisted pair will do the trick. Look at the technology from Next Level Communications; they have over 100 customers many of which deliver the fabled 'triple play' to their customers.
lighten up!! 12/5/2012 | 12:19:29 AM
re: Report: Cable Still Beats DSL RBOCs have already lost the war in residential high-speed internet access. Their slow pace in introducing DSL will cost them dearly in the long run. People with Cable Modem won't switch back to DSL. There only bet PON, will take years to deploy and by then the Cable Industry would have walloped up their total market share. It's a shame that the RBOCs in order to preserve their existing embedded base of POTs have basically thrown away their future for broadband. UNE is partly to blame and it has impeded rapid deployment of broadband. Perhaps the RBOCs should acquire cable assets if they want to stay in the residential market.
turtle71 12/5/2012 | 12:19:27 AM
re: Report: Cable Still Beats DSL It seems that the author of this item is confusing things significantly. VOD on Cable is not delivered using the IP infrastructure (the cable modem in the home). VOD is still delivered using the classic video delivery schemes of cable. Adding VOD to cable modems is probably in about the same state of advancement as adding VOD to DSL.

The author goes on to point out that telephony is an opportunity for Cable (obviously), but that neither it nor data (!) are achieving high penetration.

So what it is? Is cable data doing well or not? If cable modems are currently in the lead, but DSL has a higher growth rate (see paragrah 2), will it not take over soon? and what does VOD have to do with any of this?

What about premium services over IP for the cable guys - what are they doing here? Is this not the clear threat to DSL? The primary suppliers of DSL are "pipe" guys, while the cable companyies are really "content" guys...
optodunce 12/5/2012 | 12:19:26 AM
re: Report: Cable Still Beats DSL The RBOC's will replace copper with FTTH soon. Not because they wish to provide better services to the customer...operational, in the long run it cost less to maintain fiber as it does for copper. As it stands RBOC's replace 5 to 7 % of the existing copper infrastructure with copper per year due to degradation. It is becoming more costly to maintain copper today.

They have been waiting to leverage their power with the FCC...now that that has all but failed you will soon see RBOC's investing in fiber infrastructure simply because it cost less to maintain.

Why do you think years ago they went from cross bar CO's to Digital CO's...not because the customer could be provided with wonderful services...no because they knew first in the long run digital CO's would cost less to maintain and second they thought that they could possibly leverage the CO space with Centrex type services to multi campus business!!!
rs50terra 12/5/2012 | 12:19:18 AM
re: Report: Cable Still Beats DSL Absolutely right. I talk about technology at work, because that's how I make a living. When I go home and I have to pay for it, I don't care whether it is DSL or cable. All I care is what is the price/performance: What do I get and how much do I have to pay for it?
Now going back to work. What is the most cost effective to deliver Voice (POTS or VOIP over cable); data (DSL or cable modem); video (broadcast and on-demand: using FTTH, FTTC, satellite, cable)?
Don't forget to discuss the regulatory landscape and the financial situation of the respective operators.
Complex problem? Yes, but think of the rewards.
stan333 12/5/2012 | 12:19:18 AM
re: Report: Cable Still Beats DSL Who cares about technology, MSO, PON, VOD, ABC, XYZ, fiber, copper..... Both cable modems and DSL do the job just fine, so it is all about pricing now.

I just switched from Comcast Cable Modem to SBC DSL because Comcast raised my cable modem prices to $65 per month - outrageous, I got DSL for one year pricing at $35 per month. Next year, I'll switch again if SBC raises their pricing and Comcast has a new introductry offer. It is simple to change, just get a generic email address from yahoo and then it does not matter whose wire you use.

Also, the way these services are priced is insane. ATT broadband (Comcast prededessor) offered me a cable service, cable modem, and IP phone bundled service - but the total price was higher than POTS phone service from SBC, cable modem from ATTBI, and digital satellite TV service sold seperately. Where is the logic here? It must have been the same marketing moron's idea that just raised my prices this time.

So all you techies get real - it is not about technology, it is about pricing. Technology needs to support sensible pricing, not vice-versa.
Navyseal 12/5/2012 | 12:19:15 AM
re: Report: Cable Still Beats DSL You are correct- VoD on cable and IP are in different orbits. But from a business perspective when the cable guys offer VoD they earn the high ground on a potential video service over DSL.

A higher growth rate may or may not be significant. The saturation points, whatever they may be, are more important. No one knows what they are for video over DSL or data over cable.

BTW, the guy who thinks Next Level's 100 customers are a sign of success never looked at Next Level's income statement.
rjmcmahon 12/5/2012 | 12:18:59 AM
re: Report: Cable Still Beats DSL Also, the way these services are priced is insane. ATT broadband (Comcast prededessor) offered me a cable service, cable modem, and IP phone bundled service - but the total price was higher than POTS phone service from SBC, cable modem from ATTBI, and digital satellite TV service sold seperately. Where is the logic here?

Their logic considers you as the source of their revenue and that's about all. Their pricing probably comes from the issue that they paid about $4,000 per subscriber and used borrowed money to "buy" these subscribers. Now that have to make those payments, and by the way, they still have to make their payments to the content owners, otherwise the subscribers will disconnect.

The fact that you see these illogical "bundling" prices reveals that they screwed up and paid too much. Investors beware seems wise.
rjmcmahon 12/5/2012 | 12:18:59 AM
re: Report: Cable Still Beats DSL The RBOC's will replace copper with FTTH soon.

Unfortunately, they'll go through bankruptcy first. They may never deploy FTTH.

The next step for an FTTH overbuilder, after embracing structural separation (which includes carrier neutral colos), is a political step. In that step, the FTTH advocate will need to find municipal leaders that are ready to enable their community.

The following are the psychological steps such a municipal leader will need go through.

1) First, they will try to use the ROW as a revenue opportunity to fund other projects
2) Next, they will begin to recognize that the municipality needs these networks for their own reasons and those cost savings alone will justify much of the overbuild.
3) They'll start to notice that future investment and growth opportunities for their community requires a modern communications infrastructure
4) Finally, they'll see that fiber is only the technology that enables quality of life issues, and that all citizens deserve a communications infrastructure which supports open access and bandwidth abundance.

Finding communities who can make these transitions may get us on a solid footing.
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