UPDATED 14:06 EDT / JUNE 29 2010

Dear CableCo’s and Telcos: Today is the First Day of the Rest of Your Lives [An Open Letter]

Dear Big Old Media,

I don’t know if you were paying attention today, guys, but the game completely changed.

As of yesterday, you guys were sitting high on the hog. Kings of the heap. You guys could pretty much throw anything out there to the consumers, and if they told you they didn’t like it, you could tell them to shove it because they more or less lacked choice.

If you folks were paying attention, you could have seen the writing on the wall. Folks like me and Daisy Whitney have been talking about cord-cutters for quite some time, for instance. Today, though, the final piece in the jigsaw puzzle became available to almost everyone in the country with any sort of communications device available.

Over the past several months, services like Hulu, Spotify, iTunes, YouTube and many other technologies (like video and audio podcasting) have been showing up on more and more devices, slowly encroaching on your jackpot market: the living room. Today, though, Hulu has very loudly announced that they’re deploying a paid service – only $10 a month – that allows anyone access to the full range of programming they enjoy via you guys.

That means I can connect with my WiMax connection from MetroPCS, Sprint or Clear with my XBox 360, Playstation 3 or iPad and watch everything from live sports to DVD releases to last night’s primetime TV programming. My raw monthly cost for this action will be between $45-65 a month without you. If I wanted to do this with you guys, it would cost me anywhere from $50-150 a month.

I’m talking about HD level content as a baseline, not an extra. With many of the devices I’d use to get this content, I’d have many more entertainment options aside from passive viewing of video programming, since many of these devices double as game consoles or communications devices.

At the most base level, though, I’m getting more value with cord-cutting solution than I’d ever get with you because on top of all the wonderful programming I’m getting at affordable, ala carte prices, I’m also getting internet service, something you generally charge me an extra $30-65 a month for over and above my TV imageprogramming costs.

Is the Picture Coming in Clearly For You Now?

I hope I’ve painted an adequate picture for you. These aren’t hidden options anymore. This isn’t a hacked together solution. Hulu has bought Superbowl ads before, so you can be pretty sure the world knows who they are. Sprint, Clear and MetroPCS are major players in the telco game, and everyone knows they exist. They’re mainstream.

You’re looking at a major threat to your existence.

So you’re probably asking yourself whether or not you can turn this ship around. Is you’re calling up the boys in accounting and legal to see if the FTC will allow you to make more purchases or if there’s some antitrust regulations that prevent you from acquiring more territory. If you’re a bit more smart than I give you credit for being, then you might even be thinking about some innovative social media real time web thingy you’re adding on to your service that you’re sure will keep folks around.

Just stop. That’s not going to help you.

Here’s a two step plan for you to regain your customers’ future business, and it begins and ends with speed.

1) Start Treating Video as Data!

Believe it or not, guys, I used to work for Big Cable. I was responsible for implementing one of the nation’s first cable modem services at Cox Communications (though we were called TCA Cable at the time of implementation). I understand the fundamentals of how cable works, and it baffles me that almost nothing has changed over the ten years from the days I was working with the technology.

Sure, you’ve standardized the cable modem protocols, though I’m pretty sure DOCSIS was a step backward from some of the other available technologies at the time. Fundamentally, though, you still treat TV signals as a separate entity from data.

I’m not sure what’s theoretically capable nowadays with the DOCSIS style modems, but when I worked with the Terayon modems in the ‘90s, to set up a cable modem system, you needed to cordon off one analog channel and devote it to data download and upload. Each channel you did this with would provide 13 megabits of throughput, up and down, per cable segment. When my boss and I realized what was possible, we immediately set about the task of trying to demonstrate how clear of a video signal we could shove down that 13 megabit pipe in the hopes that we could start a revolution, changing the game for television delivery.

As it turned out, my boss’s bosses weren’t interested in that jibba-jabba. They had a system that worked just fine, and they didn’t want to mess with it.

They didn’t understand, nor care to understand that if we took the 70 some odd analog channels and turned them into data channels, we’d have nearly a potential gigabit per second data delivery capability to each segment. The best the telephone companies could do at the time would be to deliver around a megabit and a half via a dedicated T1 connection, and the price for that would be astronomical compared to a $65 cable modem.

To this day, you act as if you’re thinking along the same lines. You don’t care that you’re wasting un-told potential with your networking technology. AT&T and Verizon finally realized your mistakes a few years back, and they’ve been absolutely killing you guys in areas where their UVerse and FiOS connections are available, both in marketshare and quality of service.

But you and the telcos of today still have one thing in common: you’re stingy with your connection speeds.

2) Stop Being Stingy!

You have to be aware, at this point, that the United States lags behind the rest of the world in broadband speeds available to consumers. While countries like Finland, Japan and South Korea regularly deliver 50 megabits bi-directionally to the home as a cheapie, baseline connection, the absolute best baseline plan from the whole lot of you in the USA is 5 to 10 mbs.

That’s unacceptable.

What’s sad is that this is the one area where you could prove your edge over the new and upstart competition. You’ve acclimated the average American broadband user into thinking barely faster than dialup is the same thing as “super-fast unlimited internet service.”

That’s allowed 4G providers to swoop in and say “Look! We’ll give you 6 mbs down and 2 mbs up! It’s half the cost of what you’re paying now, and it’s wireless!”

image People take a look at that and go “Hey! It can’t be worse than what I have now!”

And they’re right.

I know this because I cut the cord with Time Warner several months ago. Was Time Warner’s internet marginally faster than Clear’s internet? Yes. But Clear has better customer service, better up-time, and roughly the same speeds and half the price.

Do You See Where I’m Going With This?

You guys need to get your act together.

I’ll admit it – I’m an edge case, and I’m advocating cord-cutting because I’m on the edge and I see what’s possible.

I won’t be out here alone on my own for much longer, though, which means you’ve got a very short window of time to pull yourselves together and decide to do the right thing.

So I end my letter to you with a question: will you do the right thing, or will I be writing your eulogy here on these pages in a year or two?


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