Why Comcast hates - and fears - the Internet
Comcast lost corporate credibility last year over Internet bandwidth management: breaking FCC rules; enraging customers; and packing public meetings with Comcast employees. All that over network management?
Nope. Comcast has a much bigger problem - and it isn’t with Torrent users.
Follow the money
How does Comcast make its money? Selling TV programs - and now HDTV
programs - to subscribers. Internet access is a profitable addition for
current subscribers, but as a stand alone business it stinks: cable
costs are too high to be supported by ISP revenue alone.
But what are Internet users doing? The are using the Internet to download TV shows and movies. Comcast can’t sell you the content as “cable TV” when you can get it for free on the web.
VOIP too
Another fast growing business for Comcast is VOIP. But if you use Skype
over your Internet connection you won’t buy Comcast’s VOIP service.
It is a conundrum, indeed. If they increase the bandwidth of their system to enable Internet HD video, they slit their own throats. If they don’t the telcos may steal Internet business with DSL or wireless 3G.
What is Comcast to do?
It looks like they’re moving towards a multi-prong strategy:
- Meter Internet bandwidth. This is a winner: less investment in bandwidth; a chance to collect overages from heavy downloaders; entry-level pricing low enough to keep DSL and satellite at bay.
- Push “everything” packages. TV, phone, Internet at a price carefully calculated to be less than the sum of the parts. Grab telco revenue, minimize downloading, lock out ISP competition.
- Kill “net neutrality.” Comcast wants to charge Internet entertainment suppliers so make up for the people canceling cable TV service. Common carrier status (see “Net Neutrality” is stupid) eliminates this revenue, so Comcast is fighting it.
The Storage Bits take
Cable’s had a good run, but it is coming to an end. TV, which used to
be concentrated in 3 networks, is now atomized among dozens competing
for screen time with video games, DVDs and computers.
Cable’s costly infrastructure, optimized for hundreds of channels, can’t adjust to a world where entertainment is downloaded. They have to tame the Internet to survive.
The telcos have been going through hard times as land line usage craters. Cable is next up.
Gigabit Ethernet to every home should be a national goal. Let people, not companies, decide what they want to see. Let entrepreneurs build new services to use that bandwidth and see what happens. It will be cool.
Comments welcome, of course. I’m their worst nightmare: no cable; no landline; just a wireless ISP and a cell phone. I don’t miss either.
I don't think that Comcast would ever benefit from putting a limit to the amount of internet usage. That would be a last straw for most customers. All internet companies would have to agree on the same principle.
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