Cox's Robbins Ruffles Feathers

LAS VEGAS -- Telecom ’05 -- Cox Communications Inc. (NYSE: COX) CEO Jim Robbins is retiring in two months, and this week he's been "having a little fun" at the expense of his archrivals, the big phone companies. During his acerbic keynote here Tuesday, Robbins did his best to paint the phone companies as way behind in the race to provide bundled consumer services. (See Cable Braces for Services Rush.)

The 63 year-old Robbins walked to the podium as his intro music, "Let's Get It Started" by the Black-Eyed Peas, blared, looking comically out of place. But then he took a breath, looked out to the crowd of telecom industry people, and started jabbing.

“I think it’s funny that SBC is now talking in those commercials about doing something that Cox has been doing for years,” Robbins said. He had hit the stage just after SBC VP Lea Ann Champion finished her IPTV pep talk, which ended with some SBC TV commercials on the large video screens. (See SBC Stretches Lightspeed Timeline .) Champion was filling in for SBC CEO Ed Whitacre, who was one of the Telecom show’s many no-shows. (See Cox to Get Clipped?.)

“Cox and SBC almost got together some years ago, but Mr. Whitacre called it off at the last minute,” Robbins said. “In a lot of ways it’s my loss. If I had been lucky enough to have been acquired by SBC, then the last 10 years I wouldn't have had to work so hard. I know what he did for [AT&T CEO] Dave Dorman, and I wish I could have had some of that myself.”

Robbins's slide presentation pointed out that Cox and other cable companies are much farther along than the telcos in offering the voice, video, and data bundle.

Perhaps the biggest hit among the telco suits here was Robbins's slide depicting a Virginia resident’s backyard completely ripped up by a Verizon Communications Inc. (NYSE: VZ) FiOS crew. (See Tracking Verizon's FTTP Progress.)

“Imitation, they say, is the highest form of flattery. I guess we should be honored that the Bells are jumping on the bundling bandwagon, scrambling to add video to their product lineup,” Robbins said. "We know you’ve been trying to do that for years... I’m sure you’ll get it right eventually. I realize that where video used to be an experiment for the Bells, it’s now critical to staying alive in the business.”

Verizon spokesman Mark Marchand shot back at Robbins after the speech. “He probably could have saved himself the trouble of making his shrill, unfounded comments about the telecom industry by just saying ‘I don’t want competition,’ ” Marchand told Light Reading on Thursday.

“The entire speech, I sat there and listened as he talked about how they know customer care better than anyone else and then showing some ridiculous picture of an alleged Verizon fiber installation in Virginia,” Marchand says. “They are going to do everything in their power to stop us from offering video service.”

But Robbins would accuse the telcos of having it too easy in some aspects of the video services war. In fact, he cried foul at the phone company efforts to bring about state-level video franchises. (See Panel: Video Changes the Telecom Act.)

He keyed in on Texas, where the telcos have been successful at doing just that. (See Telcos Close In on TX Video Win.) “Recently, we’ve also seen Texas pass a blatantly discriminatory piece of legislation that guts much of the local franchising process for video providers -- except, if you’re a cable company, you’re stuck with the old rules and regulatory burdens,” Robbins groused.

“So, here’s my proposition. Let’s go head to head. We’ll all benefit, but don’t try to tilt the playing field through the regulatory process.

"Instead, let’s compete in our bare-nakeds, without regulators babysitting us, and let consumers choose the winners,” he added, causing some to recoil at the mental imagery.

Despite beating up on the phone companies, Robbins said the lines of demarcation between telephone companies and cable companies are disappearing with the differences in ther product offerings.

“I ask you, just 10 years ago, would you -- the United States Telephone Association -- ever have imagined inviting the cable guy to your show?” The audience then sat in quiet consideration of that question -- that and the question of why Robbins was invited this year.

“I wish him the best of luck in his retirement,” Verizon's Marchand said.

A video of Robbins’s keynote can be found here.

— Mark Sullivan, Reporter, Light Reading

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rjmcmahon 12/5/2012 | 2:55:24 AM
re: Cox's Robbins Ruffles Feathers I've been wondering for a while how the Carriers are going to make any money once they become fat-pipe carriers.

They need to find a way to get pricing power over the fat pipes. Minimizing competition and governments' economic regulation may be seen as helpful toward this objective. The trends in the US with industry consolidation as well as broadband deregulation suggest this is the path we are going down. I don't think anybody knows if this will be sufficient to stimulate investment into fat pipes or not. It does seem reasonable to conclude that there will be no fat pipes unless those paying for them see a return on investment.

So, what will they do to change the status quo?

SBC has grown with Cingular, DSL and is entering the enterprise market with the acquistion of AT&T. So from their perspective they are moving beyond the status quo of wireline POTs.

What can Whitacre do beyond making such comments?

He can withhold investment into infrastructure. I don't know if that helps SBC to get pricing power with Google/Yahoo/MSN or not, but lack of investment into a modern communications infrastructure does hold back using the internet for innovative applications as well as for disribution of video rich content.
canadian 12/5/2012 | 2:55:31 AM
re: Cox's Robbins Ruffles Feathers Very good point. I've been wondering for a while how the Carriers are going to make any money once they become fat-pipe carriers.

They can't stop the free riders (eg Vonage cases in the US). They can't join them yet (most traffic is illegal).

So, what will they do to change the status quo?

What can Whitacre do beyond making such comments?
rjmcmahon 12/5/2012 | 2:55:38 AM
re: Cox's Robbins Ruffles Feathers The CEO of SBC made some "ruffling" comments recently. They can be found in business week, both the online and physical versions. (The weekly version has a more complete article.)

Here is an interesting comment that people might want to think about.

Q. How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?

A. How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!
canadian 12/5/2012 | 2:55:39 AM
re: Cox's Robbins Ruffles Feathers Konafella,

First, several MSOs are already doing Switched Broadcast - Time Warner has been going GaGa over the savings in spectrum they are getting by doing this.

Once you do Switched Broadcast over the current Cable infrastructure, the channel change issue becomes the same for cable as it does for Microsoft/Alcatel. This marketing becomes even more curious then...

Would you care to elaborate your comment:
"you're comment about I-frames only during transition is not correct."
stephencooke 12/5/2012 | 2:55:42 AM
re: Cox's Robbins Ruffles Feathers I said:
"IPTV is the worst of the bunch as everything is time division multiplexed into, essentially a single carrier-type environment along with Internet access, VOIP, etc."

PO said:
"But ... as long as the entire information load is still delivered at a complete 30 frames per second (okay, 29.97 typical), do we really care about the added "sideband" data? Sure, the carrier bitrate is higher, but, really, so what?"

The only difficulty here is buffering necessary to deal with latency (ie: the packets arrive with different temporal spacings). Once the buffer is filled, and hence able to deal with the buffer-fill fluctuations, you are right. However, until that buffer is filled (ie: from the channel-change event until the buffer is at a safe threshold) this is another issue that cable does not have to deal with.

alchemy 12/5/2012 | 2:55:43 AM
re: Cox's Robbins Ruffles Feathers konafella writes:
Perhaps, as Alchemy suggested, the digital cable channel change delay could be addressed by better set-top-boxes. Very likely indeed. But rest assured that cablecos will begin to adopt IPTV (not necessarily Microsoft's version) as part of a total convergence/IMS/VoIP strategy over time. And don't be surprised to see them shift their content back to their Hub Site (aka Central Office) rather than pushing all of it to each set-top-box. Why? In order to free up huge gobs of bandwidth on their coax for higher Internet rates.

Sort of... but with a few twists.

First, the cable strategy for higher internet rates is to use channel bonding/concatenation with what they already have in DOCSIS 2.0. That's the major DOCSIS enhancement in DOCSIS 3.0 that should be hitting the market in about a year.

The big win in reclaiming spectrum is getting people off legacy analog. There's an FCC mandate that keeps getting pushed off to switch to all-digital TV soon. At some point, the spectrum to run a whole lot more IP using bonded DOCSIS 3.0 channnels is available. Today, the spectrum on most MSO plant is 100% utilized so this is the only way most MSOs can migrate from proprietary Motorola/General Instruments & Scientific Atlanta digital TV to open standards. I believe Comcast threw a billion at Motorola to give them an alternative migration strategy but the smaller MSOs don't have that kind of leverage. The MSOs all want to be on the OpenCable standard but they're kind of stuck at the moment since you can only move by deleting existing channels and nobody wants to do that since customers scream and start moving to the dish.

There's a broadcast/multicast spec in the cable space called DOCSIS Set-top Gateway. DSG was originally intended to emulate the legacy proprietary set-top box control channels down IP and DOCSIS L2 access networks. There's no reason why you can't use it to deliver the popular broadcast channels so you're not chewing up stupid amounts of bandwidth doing unicast when a customer isn't using on-demand kinds of services.
PO 12/5/2012 | 2:55:44 AM
re: Cox's Robbins Ruffles Feathers "IPTV is the worst of the bunch as everything is time division multiplexed into, essentially a single carrier-type environment along with Internet access, VOIP, etc."

But ... as long as the entire information load is still delivered at a complete 30 frames per second (okay, 29.97 typical), do we really care about the added "sideband" data? Sure, the carrier bitrate is higher, but, really, so what?

Right now, I'm running a MythTV(.org) backend with a single tuner, and the MythTV frontend on the same machine.

But what if I got around to running the MythFrontEnd on another machine in my house? And what if instead of a single tuner, I ran an array of backends in my basement, so that I had simultaneous (IP) access to any channel at any time. Would that model really differ significantly from what MS/AL IPTV is claiming to offer?

The "tuning" delay would become (largely) a signalling delay between the front and back ends (plus, of course, any buffering delay for "TiVo" functionality).

I recently recorded a football game (for my own viewing at a later time): 2:59:56 of video took up 7Gig, or 648826KB/s (or 5Mbps). 21KBytes per frame of 481x224 NTSC MPEG2 video and audio. (Unfortunately, I recorded from the IPG, so I missed the end of the game, which went past the scheduled end of the broadcast. Grr. Good thing I saw that part live.)

Compression lowers the bit rate, but doesn't change the information rate of 30 (nominal) fps. As I look at it, I'm surprised MS/AL IPTV is offering so little: why not include picture galleries, web browser for weather, email, etc?

The STB cost (under this model, anyway) is managed by removing the tuner entirely; the video rendering engine is needed in both the existing and the "IP" STBs.
paolo.franzoi 12/5/2012 | 2:55:44 AM
re: Cox's Robbins Ruffles Feathers
The 1 second response for sattelite is there.

For digital cable you are on drugs sir. Try a 100 - 200 msec.

Perhaps you should watch digital cable sometime. Every feature that you mentioned is available over digtital cable (see Moxi).

OldPOTS 12/5/2012 | 2:55:44 AM
re: Cox's Robbins Ruffles Feathers Tera,
BPON uses a separate frequency for TV. But it is analog insantaneous channel surfing.

desiEngineer 12/5/2012 | 2:55:45 AM
re: Cox's Robbins Ruffles Feathers seven: "There is a noticeable delay in switching digital cable channels, but not one I would bet $6B on."

Would you bet $6B on smoke and mirrors?

It sounds like SBC is either stupid or have seen enough to believe it might work.

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