TELECOM Digest OnLine - Sorted: Cable, Phone Companies Battle to be Your Everything

Cable, Phone Companies Battle to be Your Everything

Andrew Kantor (
Fri, 10 Feb 2006 12:42:52 -0600

Andrew Kantor: CyberSpeak - Cable, Phone Companies Battle to be Everything
Andrew Kantor, USA TODAY

It looks to be a busy year for lawmakers, technology-wise.

Last week I wrote about a debate beginning in Washington about Net
neutrality -- something that could affect everyone who uses the

Continuing in that vein, there's another argument going on that also
directly affects just about everyone. It's what you might think of as
the next stage in the battle between "cable" companies and "telephone"
companies. I put those terms in quotes because these days, no matter
how they got their start, both are becoming phone, Internet, and
increasingly television providers. Data are data.

Sure, it's still a bit odd to get your phone service through your
cable company, or your television through your phone line, but more
and more that's exactly what's happening because it's all carried
using the same technology that carries data across the Internet --
TCP/IP. (IP stands for Internet Protocol; think of it as the language
of the Internet. That's why you hear about "voice over IP" and even

Having this common data language means that companies that used to
only provide the connection can now provide other services as well --
as soon as the law catches up, that is.

We're already seeing that in some places. Cable companies are offering
VoIP telephone service, which is helping to drive down the price of
traditional phone calls from traditional phone companies. Today,
flat-rate service is the norm.

And phone companies are offering television, most notably Verizon with
its Fios service, which provides a fast enough connection for several
DVD-quality signals to a home.

It's been an uphill battle for the phone companies. If a high-speed
Internet provider (e.g., a cable company) wants to offer VoIP phone
service, it doesn't need to change the law. But if a phone company
wants to offer TV, that's another story.

Breaking in

When cable television first came along, towns and cities were happy to
get the extra channels. At the same time, though, they realized that
the problem with cable TV was, well, cables. If 10 cable companies
converged on an area, there would be wires hanging all over the place,
streets dug up, traffic snarled, dogs and cats living
together; you get the idea.

So municipalities started to offer cable franchises, in which one cable
company was granted the exclusive right to service an area. In exchange for
a virtual monopoly, it agreed to wire every home and not discriminate
against the poor side of town, among other things.

Of course telephone companies enjoyed a monopoly status too, starting
with good ol' Ma Bell, and then onto the regional Bells. Deregulation
came along, but it never really took off for local phone service,
which is why you still have "the phone company" wherever you live.

The sharp division between the phone company and the cable company
started to blur when the Internet came along. Both kinds of company
began offering high-speed access, and suddenly the Sharks and the Jets
were eyeing the same piece of turf.

The line blurred even further when voice over IP caught on, and cable
companies -- whose connections tended to be faster than the phone
companies' DSL -- began to offer telephone service.

They were able to crack into the phone companies' monopoly fairly
easily as these things go, and suddenly there was more choice in the
market thanks in large part to the deregulated phone business.

Sauce for the gander

But now the shoe goes on the other foot. Just as television providers'
technology got to the point where it could carry phone calls, phone
companies' technology is getting to the point where it can carry

It takes about 3.5 Mbps of bandwidth to carry a single DVD-quality
television signal,. (Obviously, companies want to be able to offer at
least three times that; so many home have more than one television.)
At less than 5 Mbps, DSL didn't fit the bill. But now companies like
Verizon are deploying fiber-optic connections which have plenty of

They want to break into the television business, but in their way are
those cable franchises. To offer TV to an area, a company like Verizon
needs to negotiate an agreement with the local franchising board. There
are thousands of those, and they often have lots of requirements --
'build a new wing for the library,' 'wire all government buildings for
free TV,' etc.

Sometimes those negotiations only take a few months. Sometimes they take

Which brings us to today's arguments.

On one side, the cable companies: If they're going to get competition
from Verizon and Co., they want that competition to have to meet the
same requirements they had to - namely, to build out to an entire area
and not only the profitable parts of town.

On the other side are the phone companies: They don't think they
should have to meet those same requirements because, unlike the cable
companies, they don't have monopoly status -- they have to fight tooth
and nail against an entrenched competitor for every customer.

"So what?" say the cable companies. It's unfair not to have a level
playing field.

Over here in Roanoke, VA, the phone companies played a bit of a trump
card. They pointed out that, when the shoe was on the other foot, the
cable companies were arguing for relaxed standards for a new entrant
to a market.

In fact, the cable TV people had practically written the phone
companies' argument for them. Wrote the Virginia Cable Television
Association, in a filing to the State Corporation Commission (which
regulates these things): "[R]equirements necessary to regulate a
government-protected monopoly can impose significant burdens on new
entrants without any corresponding public interest benefits."

So, says the phone industry, when you wanted to get into the phone
business the regulations were a "significant burden." But when we want
to get into TV, those regulations are a level playing field? Ha!

(OK, I made up the "Ha!")

What Verizon, and I suspect other phone companies want, is a standard
set of requirements for anyone wishing to enter the television-provider
market. So rather than negotiate everything with each franchising
authority, the company would certify that it would meet those standards,
pay the franchising fee, and start laying fiber.

That's the premise behind the Broadband Investment and Consumer Choice
Act (S. 1504, if you want to search Thomas).

It says, "A video service provider may not be required -- (1) to obtain
a State or local video franchise; (2) to build out its video
distribution system in any particular manner; or (3) to provide leased
or common carrier access to its video distribution facilities and
equipment to any other video service provider."

By eliminating the cumbersome franchising process, an open-access law
should make it easier for new providers to come to an area and start
offering television service. Verizon's Fios is limited, for now, to
larger metro areas, but that probably won't last, and smaller
companies might be able to get into the game more easily.

And as much as I hate to take the side of either major industry here,
I gotta back the phone companies. Yes, consumers have some choice now;
I use DirecTV instead of my local cable company. But more choice is
almost always better for us little guys, and letting competition into
the TV market isn't an exception.

Andrew Kantor is a technology writer, pundit, and know-it-all who
covers technology for the Roanoke Times. He's also a former editor for
PC Magazine and Internet World. Read more of his work at His column appears Fridays on

Copyright 2006 USA TODAY, a division of Gannett Co. Inc.

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