Wednesday, November 17, 2004 DSL Is In Danger Of Losing Out To Cable

A theme hereabouts has been that the unnatural alliance between Cox and BellSouth is a marriage of convenience, and that the short end of the stick is held by BellSouth. (How many metaphors did I just mix?) BellSouth's fiber to the curb strategy is not going to work as advertised as the technical analysts have been saying for some time. The financial analysts are beginning to to take note. (I see as I log in that Mike has pointed to a more extensive analysis at the Wharton School of Buisiness and pointed out the implications for our case. Good Stuff.)

From the guys at Deutsche Bank:
"The undeniable truth is that DSL is in danger of losing the early battle to cable,"

"We continue to believe operators emphasizing FTTP [fiber to the premises] should be better positioned over the long term, with FTTN [fiber to the network (sic: node)] and other solutions second best."
Clever fellows, those Germans.


One simple comment:
One of the more frustrating elements of the fight for fiber in Lafayette has been the unreflective presumption free enterprise purists that Cox and BellSouth, by the simple fact that they are privately owned, are somehow smarter, more nimble, and just plain better businessmen than the guys at LUS. 'Tain't so. And it was bad logic to ever think so. LUS is right about Fiber To The Home and BellSouth will pay the price throughout its footprint if it persists in believing that some future, as yet unrealized technology will save its Fiber To The Curb strategy from the coming deluge of bits that is HDTV. Praying for salvation is not a business strategy.

It is huge, monolithic institutions, of whatever ownership structure that tend to be blundering, self-assured, hives of incompetence that make business decisions that only make sense in terms of advancing in the bureaucracy. It is small, nimble, businesses that are close to their customers that tend to make smarter long-term business decisions. We are lucky to have one of the these in Lafayette and "free enterprise" purists would do well to think their position through more carefully. They've missed that the essential quality that they admire is found in businesses that are small, sharp, local, and have a rock solid commitments to their customer base. These are the "mammals" of the economic ecosystem. Cox and BellSouth are the dinosaurs.

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