As any year comes to a close it’s always fun to look forward to the next year and to make some guesses about the direction of our industry. I have always done this, but this will be the first year I put my guesses out in public with a blog. I plan to come back at the end of next year to see how I did.
More Consolidation of the Big Players. While the new FCC Chairman says that he is pro-competition, I think 2014 is going to see a lot of consolidation among the big players in the industry, which will lead to less competition. It’s likely that there will be major acquisitions in both the cellular and the cable TV space that will reduce the number of major companies in each industry. One has to wonder at what point the FCC will say no to acquisitions, but I don’t think 2014 is going to be that year.
AT&T’s Response in Austin Will Squelch Major Market Competition. I predict that AT&T’s announcement that they will build fiber-to-the-premise to match what Google is doing there is going to kill competition in NFL cities for a while. I don’t expect any new major announcements of plans to build NFL cities in the coming year. There will still be new FTTP overbuilders in smaller markets, but everybody is going to be gun-shy against committing money to major markets.
Network Neutrality Will Erode. The FCC is going to follow the lead of the new Chairman and will support large company initiatives to weaken network neutrality. This might be done through inaction, in that some large carriers may make arrangements to give preferential treatment in the network and the FCC may fail to halt the practice.
Transition to All-IP Network Will Creep Forward. While the large telcos all would like the transition to happen overnight, it’s probably going to take 3 – 4 years for a transition of most of the POTs network to IP. However, there will be some major steps taken in 2014 to start defining the regulatory framework that will go along with an all-IP network.
The Large Telcos Will Continue to Shed Copper Networks. The large telcos have made it clear that they would like to get out of the copper business. AT&T’s recent decision to bail on Connecticut is just the beginning. I think all that is probably stopping telcos from shedding more copper immediately is the lack of companies capable of buying large numbers of customers. But there will be more piles of customers shed in the next year.
The Smart Phone Will Begin to be the Hub For the Internet of Things. The main thing lacking for the Internet of Things to leap forward is consolidated platform to bring devices together. While there is the chance that some sort of home platform could eventually win this battle, I think 2014 is the year when more and more IoT devices are integrated with smartphones as the hub. If smartphones capture this role early they will be the de facto hub for a decade to come.
Customers Will Bail on Cable Faster Than Predicted. The phenomenon of households dropping or downsizing cable subscriptions will pick up steam this year and will go faster than predicted by the cable companies. The industry is not going to implode, but it will become obvious by the end of the year that there has to be a new paradigm created for delivery of programming and that traditional cable bundles cannot be the only product offered. It is going to take five years for the current cable model to break, but 2014 will be the year when the erosion becomes obvious.