Verizon Is Going To Be A Serious Challenge To Cable Companies (Finally)

Via Ars Technica - CableLabs report: cable needs to keep spending big on infrastructure

CED Magazine - WSJ report: Cable will have to deploy FTTP

I agree with the CableLabs report. Maintaining a hybrid fiber and RF (HFC) based cable plant is very expensive in terms of field personnel and upgrades which are needed to keep increasing bandwidth. Fiber to the home has tremendous upfront costs but in the long term saves money since most, if not all, of the field plant is passive.

This is why cable companies such as Charter Communications prefer to hook up large businesses to fiber.

The cable companies are very worried about Verizon FiOS. Verizon can easily ramp up the bandwidth on this network and the MTA they install on the house allows for data via Ethernet, four phone lines, and coaxial for video. So just as the cable companies are deploying MTA's that can use a house's existing telephone wiring, Verizon has an MTA that can use a home's existing data, cable TV, and telephone wiring.

Here's one person's account of a FiOS install:

http://www.bricklin.com/fiosinstall.htm

Sounds nice.

AT&T's U-verse or Lightspeed product is a joke. They're simply replicating a cable plant as they will run fiber to a node and then run the same old twisted copper pair (a phone line) from the node to each house. There is no way they'll ever get enough bandwidth with this system.

Cable companies can compete for the next 5-10 years by going to higher frequency amplifiers (essentially adding more channels; one channel is 6 Mhz, you can currently get data speeds of 38 Mbps from one channel), better video compression (MPEG-2 to MPEG-4), getting rid of analog TV channels (one analog channel can be replaced by 12 digital channels or 2-3 HD channels), lowering the number of homes per node, installing DOCSIS 3.0 gear (cable is currently at version 2, the next version of DOCSIS increases Internet speeds by bonding those 6 Mhz channels together .Four or more downstream channels for 160+ Mbps and three channels for 120 Mbps upstream speed), and by using switched video.

But all of that is expensive and will result in customer outages. Verizon just has to swap a laser.

Ten years from now only people in very rural areas will be watching TV and surfing the Internet on an HFC plant.

The whole world will be electrified and you'll get all your communications and data in packets over fiber, wireless, or broadband over power lines (which recently received an FCC endorsement).

But there is a role for cable companies to play...