How Long Can VDSL2 Hybrid Networks Last?

Implications: Major player AT&T (and Qwest) appear to be hooked on the lower cost VDSL2 bandwidth transmission over a hybrid fiber/copper network for some years to come.  The current Uverse 20-30mbs bandwidth offering can be improved with pair bonding, as long as there are enough good copper pairs near the interested customer to provide two times one Uverse offering, say 40-60mbs.  But as the major CATV MSOs, Comcast and Time Warner employ DOCSIS 3.0 technology, they are getting ever closer to premium internet bandwidth speed offerings of 100mbs, with the higher margins that follow premium services.  Can a VDSL2 player compete with 10mbs internet bandwidth as their highest speed available for very long?  What is the competitive situation for this kind of telco player, when the CATV MSO player puts this high speed card on the table?

Analysis: This is a great article from Vishesh Kumar of the WSJ.  According to the article, Comcast just launched "superbroadband service in Minnesota offering consumers 50 megabits a second for $150 a month".  Oops.  Can Verizon compete with the FIOS offering? No problemo.  They are already the kings of high bandwidth offering in certain venues as NYC with the same speed/same price, and have been for some time.  So, once we see the take rates for these new high bandwidth internet speeds, with accompanying high margins, we will be able to see how long VDSL2 and other fiber/copper hybrids survive. 

All CATV MSOs have their own issues to deal with relative to offering the full boat of voice, video, and data services in all venues.  The key word there is "all".  Intuitively, there have to be issues with such heavy bandwidth/radio frequency spectrum needs compared to available spectrum in dated facilities that were pumped up in the early 2000 time frame.   It would indeed be a tragedy if a major CATV MSO could not sell phone service because of a lack of spectrum in certain geography. 

Another observation is that the footprint of the major CATV MSOs does not lay down exactly with the major RBOCs.  So, wherever the particular MSO competes with the RBOC is where the new high speed bandwidth will be offered, causing major headaches for the RBOC in that location.  The converse of that also applies to the RBOC:  where there is minimal competition for the RBOC, application of newer high speed facilities will be slow at best.