There are so many implications to the proposed Comcast acquisition of Time Warner Cable that it’s a little hard to stay focused on one angle. However, I do want to interject something into the argument that the deal is all about the expansion of broadband. While that’s true, it’s also a simplistic statement. Why? Because broadband is all about TV right now. Think about it. What is driving the ridiculous growth of Internet traffic? It’s video. And what major video source is in the process of shifting to IP delivery? Television. You can’t tease out one side of the business from the other when the financial considerations of both are so intensely intertwined – from how networks are upgraded, to how bandwidth gets allocated, to how service packages are created.
There is one thing I think we’ll have to pay a lot more attention to going forward, and that’s how the major operators (including Comcast-Biggest-Cable-Company-of-All-Time-Warner) decide how to divide up their total delivery capacity between public Internet service and their own managed IP services. To be sure, ISPs depend on being able to market higher Internet speeds and cheaper prices to keep customers (at least in some markets), but I wonder whether in the future there will be less incentive to make public Internet services high-performing if cable companies can make more money from their own managed IP offerings.