Cable, Phone Companies Battle to be Your Everything

Andrew Kantor: CyberSpeak - Cable, Phone Companies Battle to be Everything Andrew Kantor, USA TODAY

It looks to be a busy year for lawmakers, technology-wise.

Last week I wrote about a debate beginning in Washington about Net neutrality -- something that could affect everyone who uses the Internet.

Continuing in that vein, there's another argument going on that also directly affects just about everyone. It's what you might think of as the next stage in the battle between "cable" companies and "telephone" companies. I put those terms in quotes because these days, no matter how they got their start, both are becoming phone, Internet, and increasingly television providers. Data are data.

Sure, it's still a bit odd to get your phone service through your cable company, or your television through your phone line, but more and more that's exactly what's happening because it's all carried using the same technology that carries data across the Internet -- TCP/IP. (IP stands for Internet Protocol; think of it as the language of the Internet. That's why you hear about "voice over IP" and even "IPTV.")

Having this common data language means that companies that used to only provide the connection can now provide other services as well -- as soon as the law catches up, that is.

We're already seeing that in some places. Cable companies are offering VoIP telephone service, which is helping to drive down the price of traditional phone calls from traditional phone companies. Today, flat-rate service is the norm.

And phone companies are offering television, most notably Verizon with its Fios service, which provides a fast enough connection for several DVD-quality signals to a home.

It's been an uphill battle for the phone companies. If a high-speed Internet provider (e.g., a cable company) wants to offer VoIP phone service, it doesn't need to change the law. But if a phone company wants to offer TV, that's another story.

Breaking in

When cable television first came along, towns and cities were happy to get the extra channels. At the same time, though, they realized that the problem with cable TV was, well, cables. If 10 cable companies converged on an area, there would be wires hanging all over the place, streets dug up, traffic snarled, dogs and cats living together; you get the idea.

So municipalities started to offer cable franchises, in which one cable company was granted the exclusive right to service an area. In exchange for a virtual monopoly, it agreed to wire every home and not discriminate against the poor side of town, among other things.

Of course telephone companies enjoyed a monopoly status too, starting with good ol' Ma Bell, and then onto the regional Bells. Deregulation came along, but it never really took off for local phone service, which is why you still have "the phone company" wherever you live.

The sharp division between the phone company and the cable company started to blur when the Internet came along. Both kinds of company began offering high-speed access, and suddenly the Sharks and the Jets were eyeing the same piece of turf.

The line blurred even further when voice over IP caught on, and cable companies -- whose connections tended to be faster than the phone companies' DSL -- began to offer telephone service.

They were able to crack into the phone companies' monopoly fairly easily as these things go, and suddenly there was more choice in the market thanks in large part to the deregulated phone business.

Sauce for the gander

But now the shoe goes on the other foot. Just as television providers' technology got to the point where it could carry phone calls, phone companies' technology is getting to the point where it can carry television.

It takes about 3.5 Mbps of bandwidth to carry a single DVD-quality television signal,. (Obviously, companies want to be able to offer at least three times that; so many home have more than one television.) At less than 5 Mbps, DSL didn't fit the bill. But now companies like Verizon are deploying fiber-optic connections which have plenty of bandwidth.

They want to break into the television business, but in their way are those cable franchises. To offer TV to an area, a company like Verizon needs to negotiate an agreement with the local franchising board. There are thousands of those, and they often have lots of requirements -- 'build a new wing for the library,' 'wire all government buildings for free TV,' etc.

Sometimes those negotiations only take a few months. Sometimes they take years.

Which brings us to today's arguments.

On one side, the cable companies: If they're going to get competition from Verizon and Co., they want that competition to have to meet the same requirements they had to - namely, to build out to an entire area and not only the profitable parts of town.

On the other side are the phone companies: They don't think they should have to meet those same requirements because, unlike the cable companies, they don't have monopoly status -- they have to fight tooth and nail against an entrenched competitor for every customer.

"So what?" say the cable companies. It's unfair not to have a level playing field.

Over here in Roanoke, VA, the phone companies played a bit of a trump card. They pointed out that, when the shoe was on the other foot, the cable companies were arguing for relaxed standards for a new entrant to a market.

In fact, the cable TV people had practically written the phone companies' argument for them. Wrote the Virginia Cable Television Association, in a filing to the State Corporation Commission (which regulates these things): "[R]equirements necessary to regulate a government-protected monopoly can impose significant burdens on new entrants without any corresponding public interest benefits."

So, says the phone industry, when you wanted to get into the phone business the regulations were a "significant burden." But when we want to get into TV, those regulations are a level playing field? Ha!

(OK, I made up the "Ha!")

What Verizon, and I suspect other phone companies want, is a standard set of requirements for anyone wishing to enter the television-provider market. So rather than negotiate everything with each franchising authority, the company would certify that it would meet those standards, pay the franchising fee, and start laying fiber.

That's the premise behind the Broadband Investment and Consumer Choice Act (S. 1504, if you want to search Thomas).

It says, "A video service provider may not be required -- (1) to obtain a State or local video franchise; (2) to build out its video distribution system in any particular manner; or (3) to provide leased or common carrier access to its video distribution facilities and equipment to any other video service provider."

By eliminating the cumbersome franchising process, an open-access law should make it easier for new providers to come to an area and start offering television service. Verizon's Fios is limited, for now, to larger metro areas, but that probably won't last, and smaller companies might be able to get into the game more easily.

And as much as I hate to take the side of either major industry here, I gotta back the phone companies. Yes, consumers have some choice now; I use DirecTV instead of my local cable company. But more choice is almost always better for us little guys, and letting competition into the TV market isn't an exception.

Andrew Kantor is a technology writer, pundit, and know-it-all who covers technology for the Roanoke Times. He's also a former editor for PC Magazine and Internet World. Read more of his work at His column appears Fridays on

Copyright 2006 USA TODAY, a division of Gannett Co. Inc.

NOTE: For more telecom/internet/networking/computer news from the daily media, check out our feature 'Telecom Digest Extra' each day at

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