TelcoTV, TelcoTV, TelcoTV. We figured if we said it three times fast, something magical might happen, sort of like on Beetlejuice. But alas, it hasn’t. A week after the TelcoTV show, we still are not convinced the basic fundamental answers about TelcoTV have been answered.  It’s that same uncomfortable feeling we had with, oh, national 802.11 Wi-Fi network plans a la Cometa.

First, we should say that we absolutely agree with telcos who want to expand their fiber closer to the customer, increase customer bandwidth, and offer triple play services. Yes it will be hard to do, yes it will be expensive, but if nothing else, it gets telcos into the game against multiple system operator (MSO) competition (and in some areas, against the overbuilders, municipalities, developers and utilities who also are getting into fiber).

But - there has to be a but here, of course - we’re still struggling with the leapfrogging and value-added part of the equation. Where’s the pioneering going to take place?  Or said another way, Is there money in ‘me-too’?

Early triple play pioneers were telling us years ago that they found that they needed to do one of two things to compete with cable MSOs in video:

1.) Be better for the same price.

or

2.) Be cheaper offering a comparable service.

We’re not seeing that this has changed much. People don’t necessarily love their cable company (or satellite provider). But they’re used to them. They’re comfortable with them. They need a reason to switch.

What this means for carriers is that they can either take the low cost (low revenue/low margin) approach out of the gates - which a few might do, but none would prefer, - or they can offer customers something that is better and different and maintain (or at least lead with) pricing that isn’t discounted to within an inch of its life.

There are two areas where telcos can probably stake a claim - at least in the near term - vs. cable: HDTV and Video on Demand.

Now we realize that MSOs are already offering both of these services in many of their service areas. But bandwidth and architectural constraints often limit these services in some ways. HDTV and Video on Demand are both bandwidth hogs, and although cable has a fat pipe with a lot of potential spectrum to be used, there are significant shared elements within the network.