When cable met Silicon Valley: Western Cable Show panel focuses on convergence

On the first day of the Western Cable Show in Anaheim, Calif., last week, some of the top minds in software, computers and Internet services gathered to offer advice to the cable industry as it steps hesitantly into Silicon Valley territory, as well as take a few swipes at telcos. The fundamental question for the panel: What does the cable industry need to do to become a truly integrated provider?

"The Internet industry is characterized by being a very open competitive environment, where a lot of people can participate," said Mario Vecchi, vice president of broadband development for America Online, adding that such openness will be key to the cable industry.

Cable companies must invest in technology, said Avram Miller, corporate vice president and director of business development for Intel Corp. "Look at an open system-the telephone system-everybody can put anything they want on top of the local phone system. But phone companies don't invest heavily in [digital subscriber line]," he said.

In their discussion of the next generation of set-top boxes, panelists predicted a wealth of interactive services.

Inevitably set top boxes will include "those applications that involve human-to-human communication" such as e-mail, unified messaging and gaming, said Guy Tribble, vice president of architecture and technology for consumer systems at Sun Microsystems.

The next generation will demonstrate what cable can do that its chief competitor, satellite services, can't, said Alan Yates, director of Microsoft's digital television platform marketing group. "Video-on-demand will be tough, but it will happen," he said. "[Internet protocol] telephony is a totally new business, but it will be supported."

Panelists agreed that cable companies have the capability to be sole bandwidth providers to the home.

"Their last-mile structure has a huge advantage. Plus cable has multichannel capability that DSL doesn't provide," Vecchi said.

"The cable company is in the best position," Miller added. "The phone company will be driven by policy, and it has to deal with the technology of DSL."

When could cable companies be such integrated providers? Most panelists predicted within five years.