For Cable, Old Monopoly Behaviors are Going to Change
Telcos and cable TV companies historically have not generally competed head to head with each other on a facilities basis, though mobile companies quickly moved to facilities-based competition. That is not to say fixed network telcos and cable companies now are unused to competition. They compete with each other, with satellite and mobile companies and sometimes overbuilders (independent ISPs).
But, as a rule, telcos have not overbuilt other telcos and cable companies have not directly confronted each other. The direction, though, clearly is in the direction of growing competition, nationwide, albeit on the basis of “over the top” applications competition, and only partly in terms of physical facilities.
For telcos, mobile services were the big break from the historic monopoly pattern. Now AT&T offers nationwide video service for the first time, using it DirecTV asset. Over time, AT&T and Verizon are likely to compete nationwide, or globally, to an extent, in various areas related to applications and services related to internet of things, connected cars, connected health and other services.
For cable companies, it also is likely that mobile entry will lead, for the first time, to nationwide competition that oversteps the historic geographic boundaries. Streaming video is likely to be the other area where competition breaking the historic pattern will happen.
Comcast, for example, has acquired rights from cable network owners to offer their channels nationwide.
To be sure, cable operators are likely to continue to avoid head-to-head competition in their fixed network coverage areas. That obviously will not be possible if and when both Charter and Comcast get into the mobile business. Should Charter and Comcast both wind up in the streaming video service business, they are likely to compete with each other directly, though not on a “facilities” basis.
Still, markets and services are going to push cable operators into unusual behaviors, such as competing directly with each other. Mobile companies have grown comfortable with that notion. Fixed network telcos have found their primary competition comes only from cable operators, as have cable companies, who mostly face only telcos as primary rivals. But that is the fixed networks business.
Mobile is a national basis, as are the major apps businesses. So change will come. The old adage used to be "we have the best of all possible worlds: we are an unregulated monopoly." That is going to be less true, in the future. At least in the "new business" areas, there will be no monopoly, and no avoiding competing against other cable operators. They'll eventually get used to it, as tough a change as that will represent.