Archives

April 2003 Issue

EDITOR'S LETTER

LAURA HAMILTON

$Billions to Lose

It's a simple formula. Small- and medium-sized enterprises (SMEs) spend billions of dollars a year on data and voice, and they tend to have little choice in providers. Your HFC networks run extremely close to many of those businesses. You have billions to make--or concede to the telcos.

With today's broadband battle cry to turn profits utilizing the upgrades you've completed in the past few years, this doesn't seem a good time to fall back on the old wait-and-see strategy.

As Charter Corporate Vice President James Rice put it at this year's Emerging Technologies Conference: "Doing a lot of market studies and thinking about this is probably not a good exercise. It's like shooting fish in a barrel."

Rice added one of the most memorable quotes of the conference when asked about cable's past poor service reputation, and its effects on obtaining SME customers: "They hate the telcos more than they hate you," he quipped.

Life's a niche

Of course, most of the SMEs sitting so close to your nets, are just that--close. Close isn't connected. But a plethora of vendors continue to come forward with solutions to help operators make that connection, and do it cost-effectively.

According to vendors in the SME space, MSOs only need moderate penetration rates to see a quick return on their initial investments. However, offering data or voice to SMEs remains a niche play for many cable ops.

Why? The answer I get most often when I pose that question to engineers is the high cost of redundancy. If your net goes down, and a residential user is out for a couple minutes, it's a bother. If your net goes down, and an SME loses Internet access, it could mean big profit losses for both you and the business customer.

DOCSIS 1.1 and 2.0 mean HFC nets can provide more robust services, and allow you to offer service level agreements (SLAs). This means that cable is poised to be a competitor in the SME market rather than a niche player.

However, as cable ramps up its technology to reach SMEs and nab underserved customers, the industry shouldn't forget the more subtle battle going on in the halls of government. The telcos have set up residence in those halls, and left unchecked, they'll create major obstacles to competition. Unless the industry pays closer attention to the regulatory game in the SME space, all its technology won't get those billions lost to the telcos back.

()

Back to April 2003 Issue

Access Intelligence's CABLE GROUP
Communications Technology | CableFAX Daily | CableFAX's CableWORLD | CT's Pipeline
CableFAX Magazine | CableFAX databriefs | Broadband Leaders Retreat | CableFAX Leaders Retreat