It was only a very small report on the front page of last Thursday’s issue of USA Today, but it indicated a tremendous change not only for America’s telecommunications market, but also for its society as a whole. In a small box between headlines about the crisis in Kosovo the interested reader could find out that AT&T had announced to purchase cable giant MediaOne and that software producer Microsoft was about to invest $5 billion in AT&T shares. This huge move won’t let the video distribution market unchanged and many experts believe that this merger has triggered a lot of new developments in all kinds of fields.
This paper deals with the competition between traditional wired cable (as we know it since the beginnings of television) on the one hand – and newer services like direct broadcast satellites (DBS) and video and data distribution via telephone lines. While the first part will mainly cover the latest developments in the telephony business (focusing on the breathtaking AT&T deal), the second part will compare the benefits of cable and DBS in detail.
It lies in the nature of the subject that the playing field can change in a couple of weeks (if not even in a couple of hours). Therefor it is very important to rely on up-to-date information and literature. Especially literature from before the 1996 Telecommunications Act, which allowed cross-ownership between cable and telephony and the like, can’t be considered too useful and was used only to get a historic idea of the subject matter. In doing research in this field one also has to be especially careful not to rely on sources that are heavily influenced by either the cable or the DBS lobby. Both groups naturally try to present the facts in a light that makes them look better and emphasizes the advantages of their particular system over the ones of the competition.
Table of Contents
1. INTRODUCTION
2. AN ALLIANCE OF TITANS – THE AT&T DEAL
3. COMPARISON CABLE VS. DBS
3.1 Costs to the consumer
3.2 User-friendliness
3.3 Customer service
3.4 Picture quality and reliability
3.5 Carriage of Local networks
4. CONCLUSION
Objectives and Topics
This research paper examines the competitive landscape of the video and data distribution market, specifically focusing on the shift from traditional wired cable services to emerging technologies like Direct Broadcast Satellite (DBS) and telephone-line-based distribution.
- The impact of major corporate mergers on the telecommunications market, specifically the AT&T and MediaOne deal.
- Comparative analysis of cable television and DBS in terms of consumer costs.
- Evaluation of user-friendliness, customer service, and technical reliability between providers.
- The strategic importance and regulatory challenges regarding the carriage of local network programming.
- The influence of software giants like Microsoft on the infrastructure of cable communication.
Excerpt from the Book
COMPARISON CABLE VS. DBS
Costs to the consumer
Up until a couple of years ago, this question was a major plus for the traditional cable companies. Satellite dishes were about $700 and consequently demanded a major up-front investment to get started. Now that prices are down to $100-200 one of the biggest barriers for DBS has come down. Cable advocates still point out that the initial costs for DBS are higher than for cable and that hooking up additional TV sets costs extra, same as most sports packages (which are praised as one of satellites greatest strengths).
The satellite industry answers that the initial investment might be higher but – in contrast to the leased cable boxes – the consumers would at least own what they pay for. They also argue that once you exclude the cost of the hardware, the average monthly bill for basic DBS service programming is only $7 higher than for basic cable ($30 vs. $23, see “Who’s watching what, where” in appendix). If you compare these costs to the number of channels both services offer, you get much more different channels for your money subscribing to a satellite service (Blake 1997, p. 12).
Summary of Chapters
1. INTRODUCTION: Outlines the scope of the paper, focusing on the significant telecommunications shifts caused by industry mergers and the competition between cable and newer distribution methods.
2. AN ALLIANCE OF TITANS – THE AT&T DEAL: Analyzes the high-stakes corporate environment, focusing on AT&T’s acquisition of TCI and MediaOne, and the strategic investment by Microsoft.
3. COMPARISON CABLE VS. DBS: Provides a detailed performance and cost comparison between satellite and cable, covering technical hurdles, service quality, and market accessibility.
4. CONCLUSION: Summarizes that there is currently no single ideal winner, as market success depends on a combination of consumer needs, location, and the ongoing trend of consolidation between providers.
Keywords
Telecommunications, AT&T, MediaOne, Cable Television, DBS, Direct Broadcast Satellite, Microsoft, Market Competition, Infrastructure, Local Networks, Consumer Costs, Satellite Technology, Industry Mergers, Telecommunications Act 1996, Video Distribution.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on the changing landscape of the video and data distribution market, highlighting the intense competition between traditional wired cable providers and newer satellite or telephone-based services.
What are the primary thematic fields discussed?
The main themes include corporate mergers (specifically the AT&T deals), the comparative costs of services for consumers, technical challenges such as reception quality, and the strategic regulation of local network broadcasting.
What is the primary objective of the research?
The objective is to analyze the shift in the American telecommunications market and evaluate whether satellite or cable offers a more viable service model for the future.
Which methodology is utilized in this paper?
The paper utilizes a comparative analysis of industrial developments and existing market research, emphasizing the need for up-to-date data following the 1996 Telecommunications Act.
What topics are covered in the main section of the paper?
The main section covers the "Alliance of Titans" (the AT&T/MediaOne merger), followed by a comparative analysis of cable vs. DBS across metrics like pricing, user-friendliness, customer service, and signal reliability.
How can the paper be characterized by its keywords?
The paper is defined by terms such as Telecommunications, Market Competition, Cable Television, Direct Broadcast Satellite, and Vertical Integration.
Why is the AT&T deal described as a "horror scenario"?
It is described this way because the merger of a telephone giant with major cable companies raises significant concerns regarding market concentration and the creation of telecommunication monopolies.
What is the "trump card" for traditional cable companies?
The primary advantage of cable over DBS is its ability to easily carry and provide local network programming, whereas DBS users currently face technical limitations and legislative barriers to accessing local broadcasts.
- Arbeit zitieren
- Christoph Koch (Autor:in), 1999, Direct Broadcast Satellite, Telephone / Traditional Cable, München, GRIN Verlag, https://www.grin.com/document/3946
