Editor's Letter: Here Comes Comcast

Cable World, April 4, 2005

By John P. Ourand

If you're in San Francisco, you're going to hear all about competition this week.

You're going to hear about competition from DBS. You're going to hear about competition from telcos. You're even going to start to hear about competition from cell phones.

What you're not going to hear about--at least not from any podium--are MSO concerns about one of the biggest potential threats out there. That's the threat from other cable operators.

Or, more specifically, the threat Comcast is posing to other MSOs.

It may be the height of corporate paranoia, but some MSOs are concerned that, years down the road, Comcast might overbuild the rest of the industry via the Internet using IP technology.

Remember Brian Roberts' fascination with IP at the 2003 National Show? That's when he literally took over moderating duties from Lou Dobbs to quiz Bill Gates on his vision of an all-IP world. Some MSO executives sure remember it well...

(Comcast isn't the only cable operator dabbling in this arena. But it's the biggest, which means it's the focus of the most angst.)

Operators are keeping an eye on Philadelphia, fretting each time Comcast cuts a deal and becomes more powerful. The paranoia increased last month when Comcast and Motorola signed a deal effectively giving the MSO control of conditional-access technology.

The MSO's content plays--trying to buy Disney and bringing in Jeff Shell to develop programming, for example--also are troubling (we're not quite at the point of calling them alarming). "Brian is a very aggressive executive," an industry executive told me. "I wouldn't put [the idea of developing an Internet- based video platform] past him."

Programmers have heard these rumors, too. And more than a few of them are starting to investigate. They're more than happy to feed Roberts' IP curiosity, even if it means re-opening contracts. If programmers can get into bed with the biggest MSO and help develop another distribution platform, who loses? "That wouldn't be the end of the world," one programming executive told me.

There's a strong fraternity among cable operators; but those bonds have been tested recently as MSOs increasingly get into public carriage battles with each other.

Time Warner Cable's fighting with Cablevision over a regional sports network. Charter's upset with Cox over its regional sports network. I can't wait for Mediacom's Missouri Cable Sports Network to run into carriage battles eventually with the MSOs in its markets (including Cox, Charter, Cable One and Cebridge). Even Comcast's G4 ran afoul of Time Warner Cable in New York City.

So, while you sit in a big hall and listen to cable's finest talk about the threat from cell phones, remember that the biggest opportunities--and the biggest threats--generally don't get a public airing.

Not at first, anyway.

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]