Telephone company entry into cable television : A reply

Continuing technological advance reinforces the conclusion in our earlier study that construction of integrated broadband networks (IBNs) consisting of fibre-to-the-home systems will not be the most promising way for local telephone companies to compete with incumbent cable television providers during this decade. Whether fibre-to-the-kerb systems prove to be viable for competitive entry is also questionable. In our view, the success of telephone companies as cable competitors during the 1990s is as likely to depend on other fibre network architectures or on whether video compression techniques can be perfected for video services over existing local telephone networks. Our analysis highlights the dangers of public policies that seek to promote a particular technology, as proponents of fibre-based systems have urged, to strengthen the US telecommunications infrastructure.