Uncommon Wisdom

Feb 23 2011   3:58PM GMT

Video streaming causing wireline broadband and cable planning issues

Tom Nolle Tom Nolle Profile: Tom Nolle

It is very clear that video streaming services are growing, partly in response to the tablet opportunity, and this creates special problems for broadband operators, most of whom see video services in the form of channelized TV as a big revenue opportunity. Now they’re faced with having OTT streaming services using the operator’s own lowest-profit Internet service to compete with channelized video that’s supposed to be that operator’s highest-profit service.

The debate here, crystallized in the Comcast/Level 3 dispute, was recently punted by the FCC even though no formal complaint has yet been filed. But not only may Level 3 file such a complaint, Netflix is making noises that it might do the same.

Cable MSOs are particularly sensitive to OTT video competition because of the fear that cord-cutting will catch on. They’re similarly concerned that HD and 3D services, when streamed, will create even more traffic and pose major congestion issues unless cable companies build out more. Remember, their cable spans are shared-capacity, so they may have to make more radical changes to scavenge bandwidth for online services. And they want somebody to pay.

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