HFC, two-way upgrades and the commitment to digital services (TV and data) solve operational problems of cable operators and expand their product offerings. Consumers get more channels, programmers get more shelf space, Internet service providers get the speed necessary to attract advertising, and cable operators can offer new services. These new services have propelled the stock prices of cable operators and their suppliers to all time highs.
For now, cable is the only game in town for residential broadband. The image of the industry was given a lift by investments made by AT&T, Microsoft, Vulcan Ventures, and other recapitalizations. Nonetheless, cable operators face commercial and technical problems before they can become the full-service networks they aspire to be. Cable is the target for others wanting in on RBB; it must continue to invest or let new and old competitors take marginal revenues. This is painful when cable's base business has a high capital overhead and its financial position is highly leveraged. Table 3-6 summarizes the issues facing those operators who want to make the transition of cable to RBB.
On the horizon are alternative technologies that approach the RBB market differently and that could pose significant competitive pressures to cable. The next chapter covers one such alternative: digital subscriber loop access networks.
3.17.79.20