Cable industry developments continue

The same company that delivers your favorite TV programs to your home may be delivering files to your telecommuters' PCs sooner than you imagine. The monopoly held by the local telephone operating companies (in the U.S., at least) to deliver voice and data is clearly on its way to being broken.

Consider these two news items:

1. Cable-AT&T connection? --The Street journal reported on November 20 that AT&T is considering a multibillion-dollar investment in Time Warner's cable business. Both companies declined to comment, but the journal said that "people close to the talks...said Time Warner is seeking $2 billion to $4 billion from AT&T, funds that Time Warner would use to reduce debt and shoulder the cost of upgrading its cable system as part of an ambitious push into the phone business."
Time Warner, which has 10 million cable customers, is already involved in telephony trials in Rochester, New York and elsewhere. A deal with AT&T would be significant for two reasons: perhaps the biggest technical obstacle to cable operators' move into telephony is the absence of switching capability, and few firms know as much about switching as AT&T does. Second, AT&T (and other long-distance carriers) are scrambling quickly to move into the local phone service markets--just as the local telcos are trying to get into long-distance--and a link with an established cable operator could give AT&T a direct route into the homes of many potential customers.
There's a long list of regulatory and technical obstacles to overcome before you'll be able to download your e-mail through your cable, but I believe these problems will be solved in the next year or two. The high bandwidth of the cable infrastructure makes it a natural for data transmission for telecommuting, and makes cable a formidable competitor against the local telcos. But the cable networks were designed primarily for one-way distribution of signals, not for two-way transmission that's essential if cable will be used for voice and data.

Also, the cable industry in the U.S. has a reputation for poor service--due to outages and customer relations--which it is trying hard to overcome. One corporate client told me recently that he'd never consider using his local cable operator for telecommuting service. "If they can't reliably get TV programs to my house, why should I rely on them to handle voice and data?" he asked.
The involvement of AT&T with cable operators might help with this problem given that AT&T enjoys such a high consumer awareness and satisfaction rating. If cable service was co-branded with the AT&T name, that poor reputation might be eliminated.

2. Cable modem purchases--The three largest cable operators in the U.S. (Tele-Communications Inc., Time Warner, and Comcast) announced on November 29 that they would buy a total of 350,000 cable modems from Motorola; Comcast also announced it would buy another 150,000 modems from Hewlett-Packard. Cable modems will let home users connect their PCs to their television cable and connect to online services and the Internet, and do so at speeds much faster than is possible today using even 28.8 kbps modems and dial-up phone lines.
But as the Wall Street journal noted on November 29, "it is still far from certain that the nation's cable network-used almost exclusively for one-way transmissions to homes--will be robust enough to handle millions of two-way users. And the cable industry has a history tory of planning more technology than it can deliver."

If the network-centric computing concept described above is on target, the cable operators (and the local telcos, of course) will be salivating at the prospects for new business. A little-mentioned fact in all the articles about NCC is that NCC is totally reliant on data communications--much more so than today's PC user is. If you have a powerful PC on your desk and its hard drive has all the applications software you need, your connectivity needs are less important than if you have to access the network every time you want to do any work. That's why you've started to see news reports about AT&T, MCI and Sprint planning to market Internet access, and I suspect the big cable operators are making similar plans.

If this all sounds confusing to you, don't worry--everyone is confused, and it's going to get worse before it gets better. I'll try to keep you updated as long as I can make some sense out of it.

This article is come from:
http://www.accessmylibrary.com/article-1G1-17959246/cable-industry-developments-continue.html