Tuesday, January 17, 2006

Net Neutrality and IPTV

In much of the discussion (Michael Parekh, Om Malik, Jeff Pulver and Lawerence Lessig to name but a few) about net neutrality few seemed to have spotted the primary underlying reason for the determination of the US telcos/cable companies to implement tired Internet access. Besides greed that is.

As I see the primary driving force between the Telcos/Cable Companies (shall they become the new Evil Empire?) is to make their wonderful, investor friendly IPTV plans economical. As I have discussed in a previous post IPTV has significant disadvantages to Broadband TV to the point of IPTV being uneconomical when competing against Broadband TV. Unless the Evil Empire (aka telco/cable companies) can implement two tiered Internet.

The telcos/cable companies are frantically seeking to raise revenue and ARPU (the CEO's bonuses depend on it remember?) in the face of the on-slaught of the IP world. They see IPTV as their salvation and are consequently desperate to make their IPTV plans work. Unfortunetly, Broadband TV makes destroys the economics of their plans. The only way to make IPTV economical is to make it impossible for Broadband TV to be delivered at reasonable resolution and speed (downgrading Broadband TV packets or tiered Internet) without paying. The price the Broadband TV provider has to pay would at the very least make the IPTV competitive but more likely be set to price Broadband TV out of the market (wouldn't want to compete, now would we?)

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