I began 2003 talking about a conference ( How consumer electronics users drive telecom today), so it’s probably fitting that I close the year with two others.   During the past month, the telecom and cable industries had their last significant conferences of the year. Judging from these events, the differences between the cable and telephone industry seem to be blurring a little more every day.

Recently, the 36th (and last) annual Western Cable Show convened in Anaheim, California.  The Western Show was something special.  Held just after Thanksgiving, it was one of those few places where Hollywood, Silicon Valley, New York and the cable barons could come together amicably.  Historically, there had always been two contingents: the people selling TV programming to the cable companies, and the cable operators out looking for new programming.  Increasingly over the years, a third contingent grew until it rivaled the other two: the geeks.

In 2000, the last good year, the Western Show was a raucous event.  Halls were crowded and noisy; Disney had what must have been a 75ft. x 75ft. booth; HBO, Showtime, The Erotic Network and just about every other TV network you could imagine, were hawking their programming.  The familiar faces in the crowd weren’t industry folk, they were the people you saw on TV sitcoms and news programs every day.

Microsoft was at the peak of promoting its first generation of interactive television software; its huge investments in several cable TV operators around the world, including AT&T Broadband in the U.S., had not yet turned sour. Everyone went home with bags full of really cool trade show giveaways. Just as had been the case with the dot-com bust the previous winter, the 2000 Western Show hosted many interactive TV startups that were gone a year later.

The 2001 installment came too soon after September 11, so attendance was almost nil.  2002 wasn’t much better, so it was decided that this year’s would be The Western Show’s last.  Too bad, too.  Even though the TV programmers and cable operators mostly showed up in hospitality suites instead of glitzy booths, this year’s show was notable for the slowly re-awakening technology sector.  Telcos should note that IP solutions are getting more common in the cable world.

A couple of odd anecdotes from the show: there’s something strange about a cable show where you can’t convince the marketing VP of a leading voice-over-IP equipment vendor that there’s value not just in putting voice over IP, but in putting television over it too.  Then there was the panel of top-tier cable industry analysts that packed the room on the last day of the show, ostensibly to hear about Rupert Murdoch.  Just because his News Corp. is almost certain to own an American satellite property next year (DirecTV), nearly the entire hour and a half was devoted to paranoia about the satellite industry.  Just as the telecom industry has finally begun to see cable as something of an enemy, you’d have expected the cable guys to finally see the telecoms as a threat.  But no.

I cornered the speakers after the session was over to ask: “What do you think of the RBOCs?” All but one said, “I knew someone was going to ask me about the RBOCs.”  But none of them had any answers, other than to say that the RBOCs were partnering with satellite and so they were enemies by association. TV from Telcos, over DSL or fiber?  Not a word.

Which brings me to the second TelcoTV conference in Las Vegas in November.  TelcoTV wasn’t the size of the (admittedly greatly-shrunken) Western Show, but everyone at TelcoTV was very focused on the cable threat.  Everyone there knew how telcos have the potential to out-cable cable through killer bundles that included services that the cable guy will never have, like long-distance service, paging and caller-ID.  

Last year, telcos were asking what “Telco TV” was; this year was different.  Many were overheard saying, “We’re here to learn enough to be able to write an intelligent RFP in the spring.”  The sessions were relevant and of high quality; attendance and the number of exhibitors exceeded expectations. 

The technology options have evolved as well.  One company was touting its own IP headend service, which pumps constant-bit-rate multichannel IP television up to a satellite, from which any telco in America can receive the signal and avoid big headend costs of their own.

Perhaps the definition of convergence needs to be updated. These days, it isn’t just about the coming together of voice, data and video; it’s about the increasingly overlapping sets of technologies and suppliers, selling to pools of increasingly competing service providers (cable, satellite, telecoms, municipalities, PUDs), who are in turn selling to the same end users. 

Maybe we should stop calling it “convergence” and start calling it “train wreck!”

Steve Hawley is principal consulting analyst of Advanced Media Strategies.  He can be reached via e-mail at steve@tvstrategies.com.

Visit Advanced Media Strategies (AMS) online.

NOTE: This will be the last Analyst's Corner column for 2003. The Analyst's Corner will be back in 2004 on Friday, January 9th with a column from Infonautic's Peter Bernstein.