TELEPHONE COMPANY ENTRY INTO CABLE-TELEVISION - A REPLY

Continuing technological advance reinforces the conclusion in our earl ier study that construction of integrated broadband networks (IBNs) co nsisting of fibre-to-the-home systems will not be the most promising w ay for local telephone companies to compete with incumbent cable telev ision 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 t he 1990s is as likely to depend on other fibre network architectures o r on whether video compression techniques can be perfected for video s ervices over existing local telephone networks. Our analysis highlight s the dangers of public policies that seek to promote a particular tec hnology, as proponents of fibre-based systems have urged, to strengthe n the US telecommunications infrastructure.