Nyah Nyah, My Broadband Network's Better Than Yours

from the not-done-spending-yet dept

Cable companies have been telling shareholders for some time that their broadband networks are robust enough that they'll be able to hold down capital expenditures, while telcos have worried investors with the billions they're shelling out to lay fiber up and down the country. But a new internal report from the cable industry warns that it too may have to make major network upgrades to match what the telcos are now doing. Of course, the cable industry is already in full spin mode, arguing that the report was purely speculative, and that it will be able to compete with its existing infrastructure. But there may be something of an Intel vs. AMD dynamic going on. Both companies would love to slow down on R&D, and you could argue that most people rarely use their processors anywhere close to full capacity. Yet neither side can afford to be perceived as trailing the other, in terms of performance. When it comes to their competitors, the cable companies might claim that the speeds afforded by fiber aren't necessary and won't add much to performance, but that's not the point of this arms race. Neither side wants to have the less-advanced network, or be seen as being behind. The broadband providers keep insisting that there is plenty of competition in their industry; maybe that's more true than they realize.
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  1. identicon
    hegemon, 18 Aug 2006 @ 7:21am

    RE:

    "Think people, if you are a provider executive, will you worry about the consumer who spends $30 a month over the consumer willing to pay $200?"

    Yes, in fact. It's called catering to the masses. The vast majority of customers are goi ng to be more of the $30/mo than the $200/mo variety. Wal-mart got to be so massive because they understood the power of the masses. They sell primarily cheap, low-quality products, but they sell them at very low prices that are attractive to most of the general public that doesn't know the difference, anyway.

    It's not the lack of insanely fast high-speed that pisses me off. It's the fact that I don't actually HAVE the option to spend less on a slower-but-adequate connection. If one of those companies would learn from Wal-mart, they would be huge...except that competition doesn't apply to monopolies, and most of them are barred from expanding into other markets by the regulation of services there.

    Just for the record, Kansas City is an amazing example of what happens with competition. Everest, a tiny David to Time Warner's Goliath, comes in a few years ago, spends a ton of money laying new line, and offers a low-priced all-in-one phone/cable/internet service for half of what just cable and internet cost from Time Warner. Almost immediately, Time Warner slashed prices in the area and came out with an all-in-one offering of their own.

    As a counterpoint, the suburb I live in is still regulated to Comcast, and the EXACT same service and speeds costs about twice as much and service response is worthless.

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