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Out-Tubing YouTube

The following is an open-letter response to HDNet founder Mark Cuban’s comments at last month’s CTAM Summit in Washington, D.C., on why “the Internet is dead.”

It was great to see you at CTAM on the closing panel, sharing thoughts with cable stalwarts like Time Warner Cable CEO Glenn Britt and Charter CEO Neil Smit.

As is usual, your frank views caused some stir — this time around in the cable camp. My thoughts: the Internet is dead? Well, not quite Mark. According to a report from The Nielsen Co. and CTAM, 129 million people in the U.S. alone access the Internet over broadband. And 81 million of them watch broadband video over the Internet. Internet access continues to be one of cable’s largest revenue earners, with Comcast earning $1.6 billion from high-speed data in the second quarter of 2007. That’s growth of 20%.

Cable is certainly helping the Internet evolve. Video is the future of the Internet, and cross-platform availability of any video, cost-effectively, is the mantra.

Yes, the television is the ideal screen to watch video — including online videos, user-generated and otherwise. Cable is best-positioned to get that video with the quality that’s needed, to the TV, hassle-free. Companies like TellyTopia are helping make that a true, seamless, cross-platform video Internet experience.

Mark, I agree — there’s a lot that can be done to leverage the cable distribution network. For instance, a 1-Gigahertz hybrid fiber-coaxial network on 256 quadrature amplitude modulation has approximately 5 Gigabits per second of inherent capacity coming into a home. That’s a lot of bandwidth. However, the devil’s in the details.

A significant part of this bandwidth is lost in analog transmission, and HFC networks are built for far greater downstream capacity than upstream capacity. The lower end of the radio-frequency spectrum that’s traditionally used for the return path is also much lower capacity than the forward path. Even the Gigabit Ethernet/wave-division multiplexing networks used for on-demand video distribution are often installed with lower-capacity return lasers than forward-path lasers — simply to save cost.

In an HFC network, traffic from a subscriber uploading video to a next-door neighbor needs to traverse the entire network back to an IP router in a headend somewhere, before being routed back to the house next door. Of course, that’s better than routing through the Internet before coming back next door, but only a little.

Cable will free up enough bandwidth with digital simulcast and switched digital broadcast. Innovative use of PacketCable 2.0 and bandwidth-management techniques can certainly help the cable industry do more with its networks than the open Internet can.

Your skepticism about YouTube is well founded, Mark. That’s why some of us in Silicon Valley (who happened to be cable TV folk) started companies like TellyTopia — to out-YouTube YouTube, right now.

So, you’re right, Mark, the Internet is not as young as it was, but cable is working to create the next revolution of the Internet — with one key difference. This time around, the Internet revolution will be on TV.