Bridge Span 13-7: Cable – The New Software

Some have long believed that the cable industry was merely a series of “dumb pipes” or “tubes” that could only haul packets of data to and fro around the world.  They see only a world where broadband delivery is just a utility, ultimately destined for regulatory strangulation.  They have even advocated for big brother government to step in and tell the private companies, investing their private money into private networks, how to manage those networks, even proposing a heavy handed “network neutrality” regime via the FCC.  They ignore the economics of network management, of scarcity, dismiss the evidence of continued innovation and ignore that the management of networks is a tricky business.

To those who believed in this unimaginative, innovation-less world the future was limited for broadband providers.  However, this depressing group only represents one view, and one largely held in university ivory towers or within institutions on the banks of the Potomac. 

There is a more optimistic, really realistic, group that has continued to make the case that those broadband providers already were innovative, increasingly offering better products.  And all along investors kept investing in the cable companies and the companies kept investing in their systems.

Broadband network companies are making enormous investments in order to give consumers the performance, products and services they want.  Greater speeds, voice and video service, parental controls, and network wide spam filters are just some of the important and now expected managed network benefits.

But, already underway is an even greater transformation.  Cable companies are increasingly “tech” companies.

Most of the work of cable companies is now being done in the cloud, not in trenches through the earth.  This one fact demonstrates how limited the thinking was just a few years ago and highlights the absurdity of the arguments that networks are dumb or that they can be effectively managed by government.

But the changes are even more fundamental.  Listen to Comcast CEO Brian Roberts at the Cable Show last week (

“That’s how you build a software company.  In fact I think we would describe ourselves more as a technology and innovation company…”

The new product offerings by Comcast, and those in the pipeline, make clear that his assertion is more than just wishful thinking, it is the truth.   A truism of the technology industry is that anything that can be expressed in hardware can be expressed in software and vice versa.  Comcast is now demonstrating that with aplomb.  The innovations include integration of Web video with the traditional stream of video content, an improved user interface focused on ease of use and customization and a voice driven interface for the visually impaired.

Over the last several months much has been said about the console gaming system becoming the digital center, or the electronic brains, of the house.   Notice seems to have been served that there is a new technology and software company in town, sporting products with brains built into the system and in the user interface.

Regulators and legislators should tread carefully in these innovation-infested waters.  To assume to know what might be next in the technology industry is a fool’s errand, trying to chart a path to innovation no more successful charting a path to a mirage.  This case has shown the “dumb pipe” crowd’s argument to ring as hollow as a, well, pipe.  Be honest, did you think that a cable could become software overnight?

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