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New York Times On VoIP

So What Will The Telcos Embrace?

It seems the story about how in love with Voice over IP is has become an everyday occurrence, and now even the industry publications are "selling" the story of "selling through" the service.

So what does this mean to the telcos? That answer is easy...Video on Demand. I've been watching the YankeeNet and ESPN contract disputes with cable companies over the past few months. If I was YankeeNet I'd form a development alliance with Verizon in the New York market to "test" Video on Demand of first run sports content. See how fast the cable companies ante up some real cash to keep the telcos from jumping in.

Face it. Only four things drive a new technology. Porn, which Verizon could not lead with. Sports because sports has a huge paying customer base. Movies because HBO has proven people will pay for a network that has new and old movies and local news because a local ad market is still thriving. Exclusivity is what the cable and broadcast world is all about. Voice services are anything but exclusive with wireless, calling cards and even companies like Vonage who all can be on a network now, well before the cable, or DSL carrier has begun officially offering VoIP.

But with VoIP, the barrier is limited to only the relationship with the customer, where the exclusivity is non-existent which is why the marketing of VoIP to already existing customers who already have a phone and just have to switch will be a big deal this year.

Over the past few years the cable MSOs have done a very good job at proving reliability. If you think about it, they are as reliable, and in most cases, easier to work with than the phone company. They offer credit card billing, something the local telcos shy away from. The cable guy shows up on time, and usually fixes things on his own. Lastly, the cable company offers one bill and by eliminating the telco bill, for many that’s one less check to write.

With the advent of one rate plans which include long distance, the telcos actually opened the door to competition even wider. As most consumers go savvy and started shopping for better deals on long distance, multiple bills came with it. By consolidating back to one bill, they gave the cable operators another entry to pounce upon.

The question remains…are the telcos ready and smart enough to jump on the Video On Demand market via sports, movies and news to begin fighting back?

Stay connected,

Andy Abramson


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