Commercial Services Just Part of Cable's Good News

By Carl Weinschenk Senior Editor

The cable industry is on the precipice of a golden age, if it plays its cards right. And the best news is that it has many cards to play. Indeed, even one element that appears on the surface to be a negative - the fact that DSL is proving resilient - really is not such a bad thing.

There are several great things happening at one time for cable operators: They are moving beyond linear delivery of content to a few TV sets in the home to full service providers of linear, VOD and streaming content to those sets as well as PCs, tablets and smartphones. They are getting into the home automation business. The size of that business is so great that it essentially still is impossible to really gauge, simply because the basic foundation in the home can be extended in so many ways that the only real limits are entrepreneurs' imaginations.

That's not all. The industry rightly sees great opportunities in cellular backhaul. The wireless carriers are grappling with a flood of traffic so deep that it threatens to overwhelm them. The cable industry, with its modern infrastructure and concentration in residential areas - near the macro towers that need the help - are perfectly positioned to lend a helping hand ... and charge for it.

And, finally, there is cellular backhaul's older cousin, commercial services. During July, Broadband Technology Report covered business services. Starting next week, we'll take a look at cellular backhaul.

Little But Good News

A month-long look at commercial services turned up little but good news for cable operators. The industry's ever-greater sophistication is enabling it to more efficiently serve its core constituency - very small and moderately sized businesses - while moving up to the higher end of the small- and medium-sized business sector.

Whether cable operators ever really go after the Fortune 1,000-type companies remains to be seen. At this point, it seems that they will be able to make a play for these companies if it is determined that it makes sense to do so. Even if it passes, operators can be a secondary supplier to even the biggest companies. Telecommuting is growing, and even the biggest companies have small satellite offices. Cable operators can provide these services without becoming the company's primary carrier.

It may just be that the cable industry is best off sticking to its small and small/medium size business roots. Abe Lincoln famously commented that, “God must love the common man, he made so many of them.” Substituting "small business" for "common man" doesn’t make the statement any less true. The small and small/medium business sector traditionally has been dissed by the telcos, who have bigger fish to fry. The strategic decision, then, is whether to go to war on the competitor’s turf or consolidate the gains where cable is strong - likely with an upward expansion great enough to require service level agreements.

It is possible to see the apparently successful efforts by the telephone industry to keep their copper wiring viable through advanced vectoring and channel bonding techniques as a negative. After all, it provides a way to extend the life of perhaps the one communications conduit that is more ubiquitous than cable's coax.

That’s true, to an extent: The advances mean that cable has a somewhat more formidable competitor for its residential and small business services. In the bigger picture, however, the improvements being made to DSL will force the cable industry to continue innovating on both the technical and business-case levels. In short, Muhammad Ali was a greater fighter because of Joe Frazier, even though it probably didn't seem that way to him the night of March 8, 1971.

It also is true that the marketing done by both will cross-pollinate. A small business listening to pitches from cable and telcos likely will choose one or the other. If cable's offerings are as superior to DSL as the industry claims, they eventually will end up with the lion's share of these businesses, even those who start with the telephone companies.

In the long haul, the real question will be which of the great opportunities the industry embarks upon. It could be an embarrassment of riches - if adroitly managed. The key is to prioritize: Is the most promising area an expansion in backhaul, commercial services or multiscreen? What infrastructure elements can be installed that support more than one of these new services?

In the past, the idea was that the cable industry would do well because people loved television. The future is bright now because people still love television - and they love watching it on many devices and many places. They love automating their homes and they love running their small businesses with inexpensive and flexible telecommunications services.

Carl Weinschenk is the Senior Editor of Broadband Technology Report. Contact him at [email protected].