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Telecommunications industry

Fiber Optics Deployment Remains Promising Despite Reregulation Cloud

Strategic Insights

— 2 min read

Despite the recent setbacks in the cable TV industry, the outlook for fiber optics equipment manufacturers remains promising, albeit at a slightly slower pace. Cable TV companies are reassessing their capital investment plans due to the reregulation cloud and the parting of ways of Tele-Communications Inc. (TCI) and Bell Atlantic. Brian Roberts, Comcast Corp. president, emphasized that the regulatory pendulum is swinging in opposite directions, with cable TV companies getting more regulated and telcos becoming less regulated. The new FCC laws to be enforced starting in June will decrease rates charged for basic and expanded basic cable TV services by 17 percent, potentially altering cable TV companies' capital expenditure plans.

Key Takeaways:

  • The federal government's reregulation efforts will continue to impact the cable TV industry, with Comcast Corp. president Brian Roberts stating that it is "making it very, very tough to stay where we are, let alone grow."
  • Despite the challenges, fiber optics equipment manufacturers are expected to continue robust sales to the cable TV industry, albeit at a slightly slower pace.
  • Cable TV companies will reassess their capital investment plans due to the regulatory changes, with some potentially altering their spending on fiber optics technology.
  • The deployment of fiber optics technology is expected to continue and form the backbone of broadband, interactive cable TV networks.
  • Comcast Corp. ranks as the third-largest cable TV firm in the United States, having signed up 75,000 new customers last year.
  • General Instrument's president of the Communications Division, Hal Krisbergh, believes competition for providing broadband services is intensifying, even with the collapsed Bell Atlantic/TCI deal.
  • Fiber optics deployment needs to continue to accelerate, with Krisbergh stating that "fiber-coax is very compelling, the justification is easy."
  • Cable TV's "Big Edge:" Fiber - Comcast president Brian Roberts believes the cable TV industry holds a "big edge" in technology due to fiber optics, with wireline technologies delivered to the home beating wireless technologies.
  • Asynchronous Transfer Mode (ATM) is a key technology to be incorporated in future cable TV networks, as Comcast and other cable TV companies pursue "true convergence of wired media and wireless technologies."

Statistics:

  • The new FCC laws to be enforced starting in June will decrease rates charged for basic and expanded basic cable TV services by 17 percent.
  • Comcast Corp. signed up 75,000 new customers last year, ranking as the third-largest cable TV firm in the United States.
  • Fiber optics deployment in cable TV networks has progressed smoothly, with 4,000 homes in the 100-node system receiving fiber to the node and coax to the home.
  • The number of nodes in cable TV networks has increased, with fiber extending to a node serving 500 homes today, compared to 2,000 homes a year ago.

Sources:

  • Convergence '94 gathering
  • Brian Roberts, Comcast Corp. president
  • Hal Krisbergh, president of the Communications Division of General Instrument
  • T. Gary Trimm, president of ScientificAtlanta (S-A) Inc.'s Broadband Communications Group

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