Telcos, cable companies face off over TV franchises (Published: May 27, 2005, 1:34 PM PDT, By Marguerite Reardon, Staff Writer, CNET News.com)
A conflict in Texas between cable companies and phone companies will come to a showdown this weekend over a new bill that would allow phone companies to offer television services without negotiating contracts with local governments.
The controversial bill, which is being considered by the Texas Senate and has stirred up lobbyists on both sides of the debate, is now in a Senate conference committee. The measure's fate will be determined this weekend, as lawmakers try to bring it to a vote before the legislative session ends, on May 30.
There's been a lot of rancour about requiring the telephone companies to open up their wires to allow competitors to offer phone service to homes. This was supposed to spur a wide range of benefits from competition and open/free markets. All I saw it lead to was AT&T buying some cable TV service (@HOME) and offer local phone service using the cable TV wires as the medium. AT&T has since backed out of that, however I did subscribe to that phone service when I had a chance and it didn't impress me.
Both the telephone and cable companies have wires that go to houses. So, I ask, what's the difference between those two wires? They're both made of copper, but you could argue the cable TV wire, since it's shielded, can offer a much wider bandwidth than the telephone wire offers. But, really, is that bandwidth needed? One can run DSL service over telephone wires, and given the right boxes at the receiving end of that DSL service, you could do some interesting services. It simply requires, after all, 1.5 MBPS of data throughput to deliver television quality video.
If the telephone companies would simply wake up and remove their blinders they could offer a service like this:
- Every home is wired for DSL at above 1.5 MBPS throughput
- Homes that simply want telephone service, would get a VOIP interface unit that provides them their telephone service.
- Homes that want more, get a different interface unit that provides other features ... such as Internet access, or the ability to "tune" to different TV signals.
See ... when you get DSL service today, you get a box that connects to the telephone wire and does the right DSL protocols to interface with an local ethernet. But you don't have to run TCP/IP protocols over that DSL wire, you could run other things over it.
For example, a special purpose DSL interface would send commands upstream that include these:
- Send a list of channels
- Change channel
- Approve purchase of paid content (pay per view)
The cable companies, such as Time Warner, Comcast and Cox Communications, oppose this approach because, they say, it unfairly favors telephone companies. For example, under this law cable companies would still be subject to the old rules for securing local franchises. The cable companies would also still be required to provide free access channels to communities and free access to municipal buildings, while the phone companies would not be required to make either accommodation.
Cable companies also accuse the telephone companies of pursuing statewide franchises because they don’t want to provide access to poorer residents. They say that Verizon and SBC will build out their networks only in affluent neighborhoods, a contention the phone companies dispute.
Hmm, okay, so it's not technology they're arguing over, but politics and business deals and power.