IT Curmudgeon

A new tidal wave arrived that some may have missed. It seems small today but will change much that we take for granted in the coming years.

Two examples of this sea change? One is http://www.hulu.com and the other is http://www.youtube.com/shows. These services offer video on demand with complete feature-length programming through the Internet, and the number of competitors and libraries should grow quickly.

Are you laughing? These services are in their infancy, but may already offer you more interesting fare than your normal television signal provider.

Today there are basically 4 kinds of companies competing to supply your household with communications services:

• Cable
• Local Phone Companies
• Satellite TV
• Wireless Telephone

Some of these companies want to sell you "bundles" of services. For example, cable companies want to sell you high-speed Internet, cable television, and telephone service. What they and many people are coming to realize is that all you really need is "the pipe." That is, high-speed Internet can now bring you all of the others, and the bundle becomes superfluous when competitors like Vonage and YouTube can offer services that are a better value.

Wireless companies have a more difficult challenge, but their ability to provide a broadband Internet pipe through cell towers keeps them in play, as well. Satellite providers are at a disadvantage because there is latency when you send a signal 24,000 miles to a satellite and back, and the cost of putting switches in orbit can be prohibitive.

Where does this end up? We will have two layers of competition: one for the pipe and one for service delivery through the Internet. The rest goes away. Televisions will accept input from multiple sources including Internet video.

When will it happen? That's hard to say. It's clear that these companies have put the changes into their business plans. The question is, how long the inevitable politics, arm-twisting and machinations of special interest groups lasts.

Hopefully, though, there will be a result that ensures that there is competition for the pipe to your house. That will keep pricing low and stimulate a healthy progression of features offered to customers.