Convergence coming from cable companies

One of the coolest things about this year’s Supercomm 2004 trade show was the high visibility of the “cable guys.” They are taking this whole convergence thing seriously, and they are talking about it.

For example, Don Logan, chairman of Time Warner’s Media and Communications Group, gave a very energetic keynote address to a very attentive audience. He said, “The communications landscape has shifted drastically. Cable has already revolutionized TV, and we may revolutionize the way that people communicate.”

He noted that cable needs to capture only a small portion of the $200 billion voice market to produce a significant increase in cable company revenue.

“Cable is also becoming a cost-effective way for people to communicate, thanks to video-over-IP technology and cable’s long-term $85 billion build-out, which is nearly complete,” Logan said. “Cable is transforming to be a provider of video, data and voice.”

Logan boasted that in a Portland, Maine, pilot Time Warner captured 17,000 VoIP subscribers, representing a 10% penetration of the market. With $200 billion dollars at stake in the voice market, even a small share of voice services will bring substantial increases to cable’s revenue stream.

Showing Time Warner is not alone in its enthusiasm for voice, other cable companies including Cox, Comcast, and Charter Communications are all talking proudly about their voice services.

At the Supercomm broadband access panel we participated in, Robert Carter from Charter Communications also woke up the audience to the fact that cable companies aren’t going after just the residential market. At a recent cable show’s seminar about business voice services, Carter noted that year-over-year attendance grew from about 80 to 800 attendees. Carter also noted that all the major cable players are laying plant to connect business, government, and educational locations to the cable network.

Maybe Logan at Time Warner is right. Maybe cable companies have gotten away from the “Cable Guy” image portrayed by Jim Carrey. And just maybe, the phone companies aren’t the only voice service game in town.