Charter CEO: Focus on symmetrical speeds due to marketing, not need | Fierce Telecom

Charter CEO: Focus on symmetrical speeds due to marketing, not need | Fierce Telecom: Echoing comments made by Comcast CEO Brian Roberts earlier in the week, Rutledge dismissed the competitive threat from fixed wireless access technology, arguing it will fall by the wayside much like DSL has as bandwidth and speed demands rise.

Mettalic COAX cable TV distribution infrastructure won’t be able to keep up either. The U.S. should have started a massive transition to fiber to the premise (FTTP) advanced telecom infrastructure 30 years ago. Instead, it adopted a laissez faire policy of allowing a wild west, constrained commercial market in "broadband" bandwidth. That created perverse incentive for legacy telephone and cable companies to sell higher bandwidth tiers at a price premium rather than invest in FTTP that would effectively end the scarcity-driven "broadband" market created by their underinvestment in distribution infrastructure.

Now the nation is caught in a never ending game of catch up, attempting to keep the advanced telecom infrastructure sufficient to end user needs with the minimum possible investment. That's beneficial to shareholders of these companies. But despite their relatively much smaller number, national policy of the past three decades has accorded their interests far greater weight than the broader public's.

Big cable’s influence, potential benefit reflected in infrastructure measure pending in Senate

The influence of big cable TV companies like Comcast and Charter Communications is reflected in the massive omnibus infrastructure bill pending before the U.S. Senate. A major indication is the proposed legislation’s requirement that some $42 billion in grant funding it would allocate to state governments be used to provide IP connectivity of at least 100 Mbps down and 20 Mbps up with latency that sufficient to allow “reasonably foreseeable, real-time, interactive applications.” That’s perfectly aligned with the current throughput offered by cable TV providers over hybrid coaxial copper and fiber cable and the Data Over Cable Service Interface Specification (DOCSIS).

The measure’s emphasis on prioritizing funds to high-cost areas with poor connectivity options points to largely benefit big cable. Consider cable TV’s history. It developed in the 1950s to serve rural areas too distant to reliably receive over the air signals from TV transmitters in cities, serving homes with cables distributed from signal amplifiers connected to large “community antenna” arrays to boost the signal.

If the bill becomes law, cable lobbyists could mount a full court press on statehouses like that of the mid-2000s when they worked to shift authority over their local municipal franchises to state public utility commissions in order to avoid universal service demands from the locals. The case they might present to policymakers: give us the funds to build out our footprints in our traditional rural areas without good connectivity just as they lacked access to urban TV signals in the past.

Cable would benefit by attaining a monopoly position in more sparsely populated rural and exurban areas where telephone companies have abandoned their legacy copper telephone lines and have not offered residential services delivered over fiber. There, cable would not have to share a duopoly market with telephone companies in more densely developed areas where the telcos are offering symmetric fiber services instead of cable’s asymmetric 100/20 Mbps throughput.

Disruptive forces bringing U.S. telecommunications infrastructure to an inflection point

Several disruptive forces are building toward a tipping point heralding a new era of construction, operation and regulation of telecommunications infrastructure in the United States. 

• The realization amid exponential growth in bandwidth demand that the nation needs to rapidly fiber up its legacy metal wire infrastructure and should have begun the work 20 years ago.
• The growth of local fiber to the premise infrastructure projects inspired by Google Fiber and the associated push back against state laws restricting the ability of local governments to build and operate telecom infrastructure.
• The obsolescence of bandwidth-defined "broadband" delivered over legacy metal wire infrastructure as an extension of plain old telephone service (POTS) and cable TV.
• The Federal Communications Commission's potential classification of Internet infrastructure as a common carrier telecommunications service amid growing popular sentiment that premise Internet service is a utility that should be universally available. 
• Excessive commercial risk that limits fiber infrastructure deployment to discrete neighborhoods.
• The recognition of the large moral hazard risk associated with public policy reliance on incumbent promises to build out the footprints of Internet infrastructure in their service territories.
• Growing unease with Comcast gaining excessive market power and getting a lock on most U.S. Internet premise infrastructure.
• The breakdown of the triple play "smart pipe" vertical business model due to high video programming costs and the rise of a la carte Internet video offerings.