OTTs Are Forcing Us to Get Better, Says Cox
AUSTIN, Texas -- Big Communications Event -- Cox Communications has admitted the competitive challenge from so-called over-the-top (OTT) players is forcing it to become a "better company" as it rolls out new higher-speed offerings.
The cable giant's pay-TV services have come under serious threat from OTT players like Netflix Inc. (Nasdaq: NFLX), which rely on the broadband infrastructure that Cox Communications Inc. is rolling out. Critics have even argued that network operators are playing into the hands of OTT players by investing in higher-speed networks.
During a panel session at today's Big Communications Event in Austin, Texas, Jeff Finkelstein, Cox's executive director of network strategy, denied that operators were "dumb pipes" but joked they might be "intellectually challenged."
"OTTs have certainly forced us to become better companies and rethink how we put out network resources and take advantage of things that are occurring around us," he told conference attendees. "There is a reason customers have moved to OTT services and we have to earn back that trust and respect as an industry."
Even so, Finkelstein conceded there is no "clear-cut business case" for investment in gigabit-speed networks and that operators were simply working to meet the demands of some customers for new types of service.
The long-term uncertainty is about the extent to which operators will benefit from this service enablement.
According to Kevin Morgan, the director of cloud and services marketing for Adtran Inc. (Nasdaq: ADTN), OTT players are only profiting in the gigabit era because of their own technology investments and employment of what he calls "web-scale principles."
"The telcos are getting in a position to do the same thing with cloudification of the network and the move to open APIs and microservices," he said. "It's about everything going over the top of the network, and even the folks owning it are moving as fast as they can."
Even if operators cannot lure customers away from OTT services, the rollout of gigabit-speed networks could force them to provide greater assurances about service quality to more demanding customers -- necessitating some of the investments to which Morgan refers.
Ricardo Torres, the director of product marketing for test and measurement specialist VeEX Inc. , believes operators marketing gigabit-speed products are coming under pressure to provide new guarantees on service-level agreements (SLAs) to their customers.
"This is happening because of savvy customers and operators have to provide proof undeniably all the way up to the application layer," he said. "You are looking at incorporating standards into SLAs to make sure you can download at 1 Gbit/s and in some cases up to 10 Gbit/s -- that is the transition."
Finkelstein reckons the launch of DOCSIS 3.1 -- which could happen later this year -- will allow Cox to provide services of up to 5 Gbit/s, and that next-generation technologies will support 10 Gbit/s "symmetrically."
"There are a number of services consumers are starting to use that add to the inevitability of symmetrical services, whatever the speeds are," he said. "It's incumbent on us to figure out how to provide the bandwidth customers need."
— Iain Morris, , News Editor, Light Reading