A Wall Street Journal article today postulates that Cable will have to invest billions in new network upgrades to weather competition from the telcos, including Verizon. The reporter based his conclusions on a confidential report from CableLabs, the cable TV industry’s research and development consortium. We believe the article makes a much bigger deal about this one report than is warranted.

To start with, this was just one single report. CableLabs routinely evaluates a wide range of emerging technology trends for its members, and cable companies like Cox Communications see numerous conclusions and recommendations from various researchers all the time. The future course of our network design and upgrades can only be charted with a substantial amount of competitive and technological trending information—info much broader than this one single report. Further, as the report in question makes clear, Cable’s hybrid fiber/coax (HFC) network can be “gracefully extended” as bandwidth demand grows. This is a critical point. The article posits that Verizon’s fiber to the premises (FTTP) path will be one of the key factors forcing cable to upgrade. But you have to note that Verizon is investing a reported $20 billion to lay fiber now because they do not have a network that can accommodate a video play, nor can they “evolve” to one. They simply have no choice but to make this investment now, given competition from Cable.

Meanwhile, Cable is already delivering consumers the bundle of services that Verizon and the other telcos covet. Will we need greater capacity going forward? Sure, but we have plenty of capacity now, continue to optimize existing bandwidth, and are undertaking bandwidth expansion measures as appropriate. Cable companies can extend and evolve our networks to an even more fiber-rich architecture over time, but in a cost-effective, as-needed approach that contrasts clearly with the multi-billion-dollar deployments of Verizon and other telcos.

The CableLabs report actually should instill confidence among consumers that cable companies, along with CableLabs, are continually looking carefully at our needs and planning for the future. The telcos’ entry into video and their network investment are certainly nothing new, and frankly long overdue. After all, what choice do they have? They’re facing considerable competition from Cable. As they are furiously working to lay fiber over the next many years, we’ll continue to thoughtfully and methodically improve and extend Cable’s winning network while simultaneously delivering the services customers want today.