Bernie Arnason over at Telecompetitor makes the argument that with DOCSIS 3.0 relatively inexpensive to quickly deploy (75 million Americans should have it by the end of the year) and many telcos clinging to aging copper last mile connectivity, the cable industry should have it pretty good competitively over the next few years. Comcast added more broadband customers (608K) in the last two quarters than AT&T, Verizon, and Qwest combined (401K), and cable’s triple play continues to gobble up fleeing copper landline customers. Cable also dominates more than 90% of the VoIP market.

Cable’s traditional weak spot – upstream bandwidth, looks to get some help later this year as cable operators perfect upstream channel bonding. Comcast recently noted that they’re seeing 75 to 100 Mbps upstream in tests. While Verizon’s decision to spend $23 billion on FTTH to the home puts them in a decent position for now, there’s a huge swath of America served by telcos using aging copper infrastructure that many of these companies can’t afford to upgrade to fiber. DOCSIS 3.0 means telcos will up their game somehow:

It all adds up to this perfect competitive storm analogy I referred to early on. This storm compels the telcos who haven’t already done so to respond, primarily with FTTH. Good customer service, local presence, and a solid DSL product are very admirable and noble. But these storm clouds may demand much more.

Can Qwest seriously compete with DOCSIS 3.0 with no money for serious upgrades? Marketing that pretends last mile copper is FTTH can only go so far. When does AT&T decide to stop waiting on VDSL bonding and pony up the cash for the move to FTTH? 3-7 Mbps is the fastest speed offered by Verizon in roughly half of its broadband territories. Luckily for most carriers, they’ll be sheltered from the “perfect competitive storm” Arnason mentions by the simple fact that many of their markets don’t see decent competition. When you’re the only game in town (be it cable, telco, satellite or carrier pigeon), you get to charge whatever you’d like for last-generation service.

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Time Warner Cable was successfully spun off from Time Warner early in 2008 in order to give both companies “greater operational, financial and strategic flexibility,” according to Time Warner CEO Jeff Bewkes. Now an insider tells Dow Jones the company has launched “Project Mercury” – an effort to rename itself sometime during 2010.

Given the spinoff the rebranding is an obvious move, though it may also help distance the company from last year’s public relations implosion when the company attempted to impose low usage caps and unreasonably high overage fees on their customers.

Good luck with that, Time Warner Cable.

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TiVo’s future depends, in large part, on cable companies embedding the TV software into their set top devices. So it’s interesting to see TiVo file comments with the FCC blasting the cable industry for making life as an independent set top creator annoyingly difficult.

According to TiVo, cable operators discriminate against third-party box providers by imposing licenses and conditions that intentionally tie TiVo’s hands. TiVo also complains that the tru2way middleware necessary to embed advanced functionality is restricted by “costly and strict license agreements.” Of course if you ask the cable industry, they’ll say that the CableCARD died because consumers didn’t want it – not because they made life hard for device makers so they couldn’t erode lucrative set top rental fees.

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Despite the best efforts by creditors who didn’t like the bankruptcy conditions, Charter Communications has announced that the company has exited Chapter 11 after filing for bankruptcy back in March of this year. The bankruptcy process and reorganization eliminated about $8 billion of Charter’s $21 billion debt load. According to Charter CEO Neil Smit, the bankruptcy will help the company to “remain focused on further enhancing the customer experience.”

Unfortunately for Charter, a lousy customer experience is one of the major reasons the company went bankrupt in the first place. Charter consistently coming in last place in nearly every survey that measures customer satisfaction among ISPs and TV operators.

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According to Verizon CEO Ivan Seidenberg, the telco isn’t worried about the threat Hulu poses to their freshly created TV empire, because Hulu will probably be dead in a year or two from now. “This is in for the next eight to twelve months and in two years it won’t matter because the world will have moved on,” the CEO was recently quoted as saying. He might not be wrong — Hulu very well could be headed for also-ran status once Comcast acquires NBC Universal, and does its best to ensure that Hulu doesn’t rock the TV revenue boat or bump up against the cable industry’s TV Everywhere initiative. That said, “cable guys” tend to have a degree of hubris in thinking that Internet video will never really harm them, despite the fact that when/if Hulu dies, there will be a stream of competitors (including piracy) waiting in the wings.

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