Cable must embrace OTT services

One of the advisors to President Obama's broadband plan, the former FCC member Blair Levin, said that it was foreseeable back in the 1990s that the Internet was going to supplant broadcasting and traditional cable video service.

“In 1994, you could envision as inevitable the Internet replacing existing platforms for communications and entertainment,” he said in a speech to the American Cable Association policy summit. “And based on numerous metrics, that transformation is well underway.”

What he said was not as clear was who was going to provide that access–it turned out to be cable in this country. And he at least had some encouraging words for that medium. “Given that the cost of upgrading the performance of the cable platform from DOCSIS 2.0 to DOCSIS 3.0 is significantly lower than the telcos’ cost to upgrade, it is likely–though not inevitable-that cable will increase its lead,” he said.

But that means the cable industry needs to focus on those so-called “over the top” video offerings online. He basically gave cable credit for investing in providing online service. He also said cable should be in the best position in most cases to provide the massive bandwidth needed to deliver over-the-top video. Cable, he said, may be the only business to ever have to build out, then completely rebuild for a product “is likely to challenge, if not replace, the product for which the original infrastructure was built.”

Levin said it was inevitable that someone would invent the iPhone equivalent of the set-top box, which was why that inquiry was made part of the broadband plan, though he had not originally planned to deal with it in the plan, he said. “The current system is not providing the kind of choice Congress asked for and consumers want,” he said. The FCC is opening an inquiry on creating a set-top device to wed broadband and traditional video.

Levin said that mobile broadband and targeted, interactive advertising were two more inevitabilities, though he said it was unclear what the impact of the former would be on fixed broadband, and that while it was inevitable that someone would “unlock” the value of interactive advertising while still protecting privacy, who that would be is “up for grabs.”

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