Editor’s Note: Welcome to Reality Check, a feature for RCR Wireless News’ weekly e-mail service, Mobile Content and Culture. We’ve gathered a group of visionaries and veterans in the mobile content industry to give their insights into the marketplace. In the coming weeks look for columns from Laura Marriott of the Mobile Marketing Association and more.
It was four years or so ago, at a cable marketing event, that I had my “ah-ha!” moment regarding the future structure of the wireless, wireline, cable and ISP industries. The event had only a modest floor of mostly table-top exhibits, but the types of products and services being offered to the cable companies caught my attention and altered my thinking.
At the time, of course, cable was (and still is) the principal means of distribution of television programming. But it had also established itself as the principal challenger to the ILEC and CLEC ISPs for the provision of broadband Internet access to the home and was already hastening the demise of dial-up ISPs.
Far from just television programming, the table-top exhibits at the cable event were focused on future products and services, such as Voice over IP (VoIP), which was still a glint in the cable companies’ eyes, and cable boxes, like Moxies’, that collected and stored all of a subscriber’s digital content, wherever it was stored in a house, and redistributed to any connected device. At the time, Comcast had just failed in its bid to buy Disney, and the cable industry itself was still a couple of years from establishing a partnership with Sprint. But what I began to believe as I looked around the show floor was that Comcast did not want to buy Disney; it wanted to buy Nextel or T-Mobile.
Cable dreams
From that moment on, I have believed that there is no more cable industry, wireline, ISP or even wireless industry. The regulatory constructs for those industries continue, to be sure, and will for some time given that policy makers are always doomed to be trailing events on the ground. But when each of those industries are competing to provide the same set of services to the same set of customers, it is hard to make a case that the access technologies used are defining anything more than a firm’s physical capital decision, especially as we move forward.
Welcome to the access-provider industry, where the fattest pipe to the house wins. everything!
Little that has happened in the four years since I had my epiphany has changed my belief about where these formerly disparate industries are headed. In fact, just the opposite: The cable companies rolled out Voice over IP services and are competing head to head, not just with Internet VoIP providers, but with ILECs to provide voice services in the home. Indeed, the cable companies have also aligned with a wireless company to offer wireless voice services. and then went the extra mile of securing spectrum for themselves, girding for the battle ahead. Not to be rendered irrelevant, ILECs stepped up the roll out of access technologies that allowed them to deliver video services to the home. Players from both industries started touting triple-play and so-called quad-play bundles. And while the differences in their access technologies have not disappeared overnight, the distinctions between those differences have begun to dissolve as all seek to offer access to the digital world. Interestingly, while the telcos and the cable companies were trying to steal each other’s core customers, wireless was providing access to voice, video and Internet services on its singular platform.
It starts with video
Today, it seems clear to me that any company that wants to provide access to digital services will first and foremost have to be able to provide access to video content (currently of a type known as network television, but soon, of “networked” television, as Shelly Palmer as so aptly described it) if they are going to get even the chance to offer voice and Internet services. Today, convenience is being touted as a driver of that decision, but in the future, as the boxes into which the video content flows become data/content distribution hubs, the value of a single service provider will include the ability to integrate content and services from a wide variety of sources and re-distribute it to any device anywhere. The winning value proposition will inevitably be that a consumer pay only one time for digital content, rather than the two or three times he or she is charged for it today.
The cable companies are the current leaders in the access-provider industry by virtue of their heritage of video distribution. The telcos must become substitutes if they are to survive. Ensuring competition will be an important role for regulators and legislators. And what of wireless in access-provider world? Will it be an extension of the wired world, an important aspect of integrated and distributed services, or a stand-alone service unto itself? Certainly, wireless voice is an indispensible service, and if one must, one would surely buy one’s wireless voice from a separate service provider than one gets his or her home access to digital services. But eventually, when provided with the opportunity to pay one time for digital content and services and access it any time, any place, would you really want to?
You may contact Mark directly at MDesautels@ctia.org. You may contact RCR Wireless News at rcrwebhelp@crain.com.
