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The Convergence Myth

November 17, 2004

Loyal readers of the a:c know that we have nothing but withering contempt for the RBOCs. They block innovation at every turn. So it is with great skepticism that we receive SBC’s announcement of a partnership with MSFT to deliver TV over fiber-optic lines. SBC plans to pay MSFT $400 million for its IP-TV software and the two companies will hammer away at this implementation over the course of a 10-year agreement.
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I want my SBC TV!
Why the skepticism? Well, we feel like we’ve heard this all before. For example, when AT&T purchased the cable operator TCI in 1999, the newswires were abuzz with talk of convergence. It wouldn’t be long, the reasoning went, before AT&T was delivering voice services over the cable infrastructure. We’re sure there’s some test market in a place like Topeka where the cable telephony service is going gangbusters, but beyond that, we suspect AT&T Broadband & Internet Services (formerly TCI) is inching along with fairly standard offerings.
The point is that attempts at “convergence” always take much longer than anticipated – if they happen at all. Perhaps the most realistic aspect of this SBC/MSFT announcement is the timeframe – 10 years. Maybe we’ll revisit this in 5 years, but for now we’re much more interested in the start-ups that are giving SBC a run for its money.
Read: SBC, Microsoft in $400 Million Deal – [AP via Yahoo]

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