Time Warner CFO’s Gigabit Remarks Not Short-Sighted, But Protectionist; Still Dumb

by | Mar 6, 2013 | Web/Tech | 0 comments

Commenting on the worldwide market for computing machinery way back in 1943, IBM Chairman Tom Watson, Sr. might be forgiven for his lack of foresight when he uttered:

“I think there is a world market for maybe five computers.”

Zoom forward to 1977. Ken Olsen, founder of Digital Equipment Corporation — maker of the mini-computers I cut my teeth on lo those many years ago — should probably be held to an altogether different standard than Mr. Watson for his own dunderheaded quip:

“There is no reason anyone would want a computer in their home.”

Just four short years later, as the Intel 8088-based IBM PC was making *lots* of people think about wanting a computer in their homes, Microsoft founder Bill Gates addressed its innate memory limitations1:

“640K ought to be enough for anybody.”

With these candidates for dumbest technology predictions of all time as our collective benchmark, lets now take a look at one more, offered just last week when Time Warner CFO Irene Esteves opined on gigabit-speed broadband to the home:

“We’re in the business of delivering what consumers want, and to stay a little ahead of what we think they will want…. We just don’t see the need of delivering that to consumers.”

You don’t say.

Esteves’ remark is different for a couple of reasons. Watson, Olsen and Gates were each speculating on where technology might go in time, and their future prognostications missed the mark. Widely. Esteves, on the other hand, is missing the mark right damn now. Time Warner has the means and the capability to deliver Gigabit services today. They do it for businesses already.

Moreover, while the remarks of Watson, Olsen and Gates may have resulted from a lack of vision, or of imagination or just fundamentally misunderestimating the aspirations of their consumers, the same cannot be said of Time Warner. For the cable industry this isn’t a failure of imagination, or even some sort of collective amnesia with regard to the pace of technology and change. I don’t think it’s really about consumer demand at all, but about protecting their cash cows. Time Warner, Comcast and the rest of the broadband operators are making money hand over fist by providing mediocre service levels that are easily sustained in a co-opetition based model; so long as no one upsets the apple cart by offering elevated service levels, all of the cable giants will prosper mightily.

In that respect, the cable operators are taking a page from another once-great technology company: Kodak. In 1975 Kodak’s own engineers invented digital photography. Rather than leverage their new film-less camera tech to revolutionize how people take and share photos, Kodak made the staggeringly stupid decision to squirrel away their disruptive tech in a dark closet, the better to protect their lucrative film-camera industry. Today, of course, the company that squandered the opportunity to leverage its disruptive technology is now bankrupt, beaten down by the very tech they failed to leverage.

With its protectionist apologetics Time Warner and the cable cabal are giving away our technical advantage. America’s access to and adoption of broadband is 15th in the world. Our average broadband Internet speed ranks 9th worldwide. What we pay for the speed we get puts us 21st in the world. We pay more, and get less. Again. Go, us!

For my part, I *do* want Gigabit technology, thanksverymuch. As a web guy who’ll be working out of a home office, having oodles of bandwidth is no small thing. In fact, that capability has played no small role in helping to determine where I’ll be landing in the next couple of months: in Kansas City, Missouri, where — likely inside a year — I’ll enjoy Google Fiber’s Gigabit service in my home.

Hello, Silicon Prairie.

  1. To be entirely fair, while frequently attributed to Gates, there’s scant proof he *actually* said something so abominably stupid. []

Pin It on Pinterest

Was it good for you?

Share this post with your friends!