People can argue about “cord cutting” and whether it’s a serious problem, but few of us disagree that the cord as a physical commodity tethering us to the Internet has become passé. Sure, those bits ultimately flow over cables. We all know that. But in terms of the last few feet or even last mile to the device, wireless data has become the in-home and out-of-home networking standard for a new global community of hyper-connected, socially networked data junkies. Sprint and cable-backed Clearwire is pushing WiMAX. And with big telco guns Verizon and AT&T launching 4G networks based on lightning-fast LTE tech in the coming months, the continuing liberation from the cord continues to shape our world.
According to Strategy Analytics’ new global wireless forecast, handset-generated data traffic will account for 30 percent of the global network load by 2015, up 10-fold from 2010. That’s more than 8K petabytes (or a whopping 8 million terabytes) flowing over the air within a few years. And just this week as Comcast launched its long-awaiting iPad app to watch authenticated content and double as a remote control, Strategy Analytics predicted that wireless dongles and connected consumer electronics devices, including tablets, will generate the remaining 70 percent of all that massive wireless traffic.
This shift toward wireless data won’t kill the cord. Quite the contrary, those bits must eventually flow to an Internet network access point that shuttles data through physical wires until they can complete their journey over the air. But the consumer perception that the world is wireless has great psychological implications for cable’s future. It’s no secret that Verizon and AT&T are also making big plays for cable customers in the wired world with FiOS and U-verse. But unlike most cable operators, these two mammoth telcos own the dominant wireless phone networks—the ones whose LTE-infused horsepower will in some cases match performance levels offered by wired broadband connections, including their own. Sure, the cable-backed Clear-branded service holds promise, but it also faces challenges as Sprint looks for more funding. Continued skepticism of WiMAX technology abounds. And many experts view LTE as wielding more long-term staying power. Ultimately, the marketplace and consumer demand will decide these questions—as always happens. And that’s as it should be. But in 2011, cable operators face a wireless broadband threat unmatched by any that may have preceded it.
In the past, mobile data networks were no match for wired broadband. And truth be told, even LTE won’t be able to compete with DOCSIS 3.0-level speeds when you start scaling it up to millions of data-hungry smartphone users. But here’s the rub: LTE will be fast enough for a whole lot of people who don’t want to pay for the privilege of 100-plus Mbps speeds. And with iPhones and Droid-based handsets already offering nice video streaming options through services like Netflix, the truth is that many mobile media addicts may simply “cut the cord” for broadband service the same way that some already have cut it in respect to video service. If large numbers of consumers went this direction, it would obviously devastate cable balance sheets and make some of the past basic sub losses seem like child’s play.
What’s the solution? Cable operators obviously need to hedge their bets, not only by backing ventures like Clearwire, but by making a serious national play for the wireless business. Cox was thinking way ahead when in 2008 it spent about $300 million to lease 14 Block A and eight Block B wireless licenses, presumably with plans to offer its own wireless broadband service in its key markets. Just this week, the NTIA recommended that 115MHz of spectrum be reallocated for new wireless broadband services within the next 5 years. Cable operators should jump all over that. Whether they use the spectrum for Wi-MAX or LTE, the more important point is that the future—at least when it comes to the last stretch of data road leading to the consumer—is wireless. Cable may have a romantic history with the wire, but it needs to go forward with an eye toward the ether. That’s where consumers live these days and will increasingly roam for the foreseeable future.
(Michael Grebb is executive editor of CableFAX Daily).