In the News

Published July 1, 2007

Mutual Invasion Society

U.S. cable and telephone companies are busily invading each other’s turf, with cable companies steadily capturing telephony customers while telcos establish firm beachheads in the television business.

IP Media Monitor, which tallied the numbers, determined that at the end of the first quarter of this year, the top U.S. cable companies had 9.82 million telephony customers. The figure represents 9.6 percent of the 102.5 million homes served by telephony-capable infrastructure. The operators are not actively marketing to all of these homes.

Cable companies stepped up the speed of their telephony invasion, IP Media Monitor reported, adding customers 78 percent faster than they did in the comparable period one year ago.

Meanwhile, the telcos are pushing into cable’s traditional territory, with the top three incumbents serving 3.2 million video customers at the end of the first quarter of 2007. Verizon and Qwest had television customer increases of 122 percent and 131 percent, respectively, while AT&T’s video customer count was up 44 percent.

Source: Cynthia Brumfield, “Cable Telephony at 10% Take-Rate Level” and “Telco Video Customer Count Tops Three Million,” IP Media Monitor, May 7, 2007, (requires subscription)

Billions and Billions

AT&T is putting big bucks behind its commitment to winning video customers. The Wall Street Journal reported the phone company says it will spend an additional $1.4 billion on its new Internet-based television system, called U-verse, bringing the total the company will spend on the system up to $6.5 billion through 2008.

U-verse is designed to deliver digital television, Internet access, and voice services using the Internet Protocol (IP) across AT&T’s huge fiber network. Because the U-verse services are all IP-based, AT&T is blurring distinctions among TVs, PCs, and wireless devices. For example, the service allows users to program their digital video recorders from their PCs, or to watch a film on a cell phone.

AT&T says the additional $1.4 billion will pay for more servers designed to deliver high-definition channels to consumers, as well as incentive payments to equipment vendors to ensure set-top boxes, DSL upgrades, and other infrastructure are available when needed.

The U-verse service, which debuted in San Antonio last summer and launched in 10 markets late in 2006, is now available to about 2.8 million homes in four states. The Journal reports the company has about 20,000 subscribers nationwide. AT&T says that figure reflects “a rapid growth rate,” and in April it reported it is doing about 2,000 U-verse installations a week nationwide.

Source: Dionne Searcy and Peter Grant, “AT&T May Spend Another $1.4 Billion On Its Ambitious Television Venture,” Wall Street Journal, May 7, 2007

‘Speed … I am Speed’

Like the race car Lightning McQueen in the Pixar movie Cars, that might have been what the DOCSIS 3.0 modem was murmuring to itself at the National Cable Telecommunications Association’s Cable Show in Las Vegas in May.

The modem made its public debut downloading a 30-second, 300 megabyte (MB) television commercial in a few seconds, while a standard cable modem took about 16 minutes to do the same.

The DOCSIS 3.0 modem took four minutes to download the 32-volume Encyclopedia Britannica and Merriam-Webster’s visual dictionary. A standard modem would need more than three hours for that task.

DOCSIS 3.0 is the cable industry’s response to AT&T’s IP-based U-verse as well as FiOS, a TV and Internet service that Verizon is selling over a new fiber-optic network that currently offers consumers top speeds of 50 megabits per second (Mb/s) and has the potential to be much faster. Current cable modem speeds max out at four to six Mb/s.

DOCSIS in an anagram for Data Over Cable Service Interface Specification, the basic common specification for cable modems. CableLabs, a nonprofit research group founded by cable companies, developed DOCSIS and its ensuing generations, including DOCSIS 3.0. It expects to start certifying modems under the standard by year’s end.

DOCSIS 3.0 modems could be available commercially in “less than a couple years,” Comcast Corp. Chief Executive Brian Roberts told the Associated Press.

Source: Ryan Nakashima, “Comcast CEO Shows Off 150 Megabits Per Second on New Modem,” Associated Press, May 9, 2007.

Real Conflict Over Real ID

States are squaring off against the federal Real ID Act of 2005. Two have passed legislation refusing to comply with the act, and legislation condemning the act is pending or has passed in 30 state legislatures, according to, an online state policy newsletter.

In April, Washington State passed a law refusing to comply with the act unless the federal government pays $250 million to cover compliance costs. Montana banned its motor vehicle division from enforcing Real ID, which among other requirements calls for states to include digital photographs, physical security features, and “a common machine-readable technology with defined data elements” on each license issued.

The Real ID Act “is another unfunded mandate from the federal government and, even worse, it doesn’t protect the privacy of the citizens of Washington,” Washington Gov. Christine Gregoire (D) said in her signing statement.

It will cost states $14.6 billion overall to comply with the Real ID Act, according to U.S. Department of Homeland Security estimates.

In his signing statement, Montana Gov. Brian Schweitzer (D) said Montanans did not want federal agents intruding in their private lives. “We think they ought to mind their own business,” he said.

Licenses that don’t comply with the act won’t be usable to board airplanes or enter federal buildings.

Source: Eric Kalderman, “Two States Lead Revolt Against Real ID,”, April 19, 2007,

Sharon J. Watson ([email protected]) writes from Sugar Land, Texas.