The quadruple play

The cover story of this week's issue of Telephony RBOCs Gird for Broadband Battleground explores how SBC Communications, Verizon Communications and BellSouth all reported big jumps in DSL subscribership and are gaining on cable operators' lead in broadband penetration, especially in the residential consumer sector. New projections released by Strategy Analytics last week support the theory that telcos -- thanks to a coming together of technology, consumer demand and pricing -- are getting to a point where they should be able to keep pace with their cable rivals.

The Strategy Analytics report cites something that's often missing from much of the discussion of telcos vs. cable operators on the broadband battlefield, and of the telco triple combo of voice, data and video: the importance of content. Specifically, the kind of broadband content that will make DSL offerings even more competitive with cable. It's the often overlooked fourth leg of broadband strategy, but a critical one nonetheless: Broadband isn't just about connectivity, it's about what that connectivity is used for.

You may recognize this argument (or, rather, the potential outcome) as the one with a terribly disparaging name: The theory of the dumb pipe. It's aptly named, both for what broadband connections are in danger of becoming, and for how carriers should be labeled if they allow it to happen. Telecom service providers are the only ones -- so far -- that own entrenched, ubiquitous, highly capable, highly reliable networks. No other competitor -- be it a cable company, or a voice-over-IP provider, or a satellite operator, or a content company -- is yet able to make all of those claims about their networks, if they even own networks at all. The next necessary step is for them to add a strong content component to that already strong network.

So what is the right level of content involvement for telecom service providers? That's a matter of interpreting and anticipating consumer needs and desires -- another inherent strength of telcos, given their longtime role as a fixture in consumers' homes. They need to leverage that presence as a fly on the wall to figure out whatever it is their customers want -- whether it's more online gaming, digital photography functionality, Web hosting capabilities, music or some other kind of streaming media -- and forge the appropriate partnerships to make sure they're involved in providing it.

Telecom carriers need to maintain their momentum and not lose their edge to those who don't yet have their inherent strengths. They're too smart ever to be reduced to becoming providers of dumb pipes.

E-mail me at jmeyers@primediabusiness.com