Time Warner Proves Competition Works...But Only Where It Exists

Wow - Well here we go, proof positive that competition does drive deployment of faster networks. Time Warner's COO basically said that where there's fiber to compete against they'll be deploying DOCSIS 3.0, the next generation of cable broadband.

But then there's the flip side to his comments: for the near term, they're only going to be deploying DOCSIS 3.0 where they have to compete against fiber; everywhere else they're comfortable with their existing infrastructure's chances of competing against DSL.

So if you don't live in an area that's getting Verizon FiOS, fiber from a local telephone company, or a municipal full fiber network, then you're out of luck. There exists the possibility that unless a competitive fiber force shows up you'll never see a major upgrade in capacity. So long as the competition can only offer speeds slower than a cable modem, cable companies see no reason to invest in building up their networks.

Now lest you think this post is another railing against the cablecos that's not my point at all. From a business point of view, I don't fault them for this decision. If I'm in a market where my product's selling fine and no one's stepping up to offer a product that surpasses mine, why should I worry about improving my product?

But this gets to the heart of the fact that if we want our goal for America to be that we have the best possible telecom infrastructure, then we're never going to achieve that through a purely private, market-driven approach. Quite simply, going this route is going to take too long and it will likely never reach any level of universality as there are so many parts of our country that won't be seeing sufficient competition to drive this forward.

Of course, if all our telcos embraced Verizon's vision of the future that wouldn't be the case at all. If they were all deploying full fiber networks, the cablecos would have to respond with a ramp up in deploying DOCSIS 3.0. Then all of a sudden we'd be better off than other countries, which typically only have one big bandwidth provider.

But in lieu of that reality, which is likely years if not decades off, we're faced with the dueling facts that while competition can work, without the presence of a full fiber network to compete against, competition doesn't and won't work when it comes to increasing the capacity of America's last mile infrastructure.