It is hard to overstate the importance of the Federal Communication Commission's investigation into Comcast's traffic management practices. As FCC chief Kevin Martin yesterday said: "I think if Comcast did not also provide video services, we would not be here having this debate." The TIA's new market report dramatically observed bundling is fast becoming the norm for all players. In six years from 2005 to 2011 the number of users bundling is predicted to go from 14 percent to 82 percent. In other words if you can't offer a bundle you are not going to have a business. Marry that with the 50 times increase in bandwidth demand predicted by 2015 and you clearly see the picture.
For the moment this is a cable problem; its network architecture is a legacy of its TV past and simply shares the bandwidth with houses in a given node.
For an FCC genuinely interested in competition, it has to find a definition of reasonable traffic management that ensures cable can offer a quality of service consistently across all three plays--voice, video and data. No doubt users should be told what they pay for and on what basis an ISP will manage the traffic. But a conclusion that in practice damages service quality will be hugely destructive to consumer choices and, in the longer run, to prices and innovation. Take the cable guys out and you quickly find in practice it is friends AT&T and Verizon who will gate-keep the next generation of digital services. Tom
