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Cablecos need an independent wireless company to partner with as their voice deployments become commoditized. I argue that Sprint is vital to the long term survival of the Cablecos (see “Someone Tell the Cablecos Fixed Line is Dead“). Brian Roberts, CEO of Comcast, is on the record saying he has no interest in Sprint. But what the hell would you expect him to say? “Yes, we need an independent wireless carrier like Sprint to survive and hope to buy it one day!”.

Comcast or a consortium of Cablecos needs to move now in order to avoid having more bidders at the table.

Author is long Sprint and short Comcast

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There has been a lot of discussion today about Video and the explosion of bandwidth needed to carry it but Peer to Peer traffic is now the largest consumer of bandwidth on your networks. Do you view P2P technology as an opportunity or threat and why?

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Everyone talks about the explosion in Video traffic. Everyone talks about the explosion in the bandwidth required to carry it. No one talks about who is going to pay for it. There is one likely source: transit bandwidth inflation.

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I woke up in SFO at 4AM to make sure I could get to Tahoe in time for this debate. I’ve written extensively on Net Neutrality and stopped once I realized it was unresolvable.

Broadband Brawl: A Debate Over Net Neutrality

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The report, which has been reviewed by The Wall Street Journal, warns that at present growth rates cable operators’ existing technology may not be able to compete efficiently with Verizon on Internet services. “At some point, optimization of the (cable) network becomes more expensive than simply deploying” fiber directly to homes, the report warns.

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Contrary to popular opinion, the real threat to the baby bells residential phone business is not the cableco’s VoIP but wireless substitution. Competition from cell phones was eating away at residential lines long before the cablecos began deploying voice services.

Most baby bells already have a wireless infrastructure. None of the cablecos do. This is why the Baby Bells ultimately have the upper hand over the cableco in the battle for residential subscribers. They can migrate their customers (and their phone numbers) to a wireless infrastructure, and Comcast (CMCSA) / Cablevision (CVC) /Time Warner (TWX) cannot. Comcast can migrate customers to Sprint/Nextel (S ), but without owning the infrastructure they won’t extract maximum value.

Wireless is the commanding heights and the most important infrastructure to own and operate in a voice network. Everything else is a commodity.

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I took the opportunity to quiz the Verizon rep on how deployment was going. The rapidity and completeness of his answers was either the result of rehearsal or intense pride.

He indicated that the surrounding towns, where FiOS TV was available, FiOS penetration was at 20%. I asked him what 20% meant and he said “One in every Five Homes”. I asked - “No tricky accounting?”. He said no, and that things were going very, very well. I asked about my town, where FiOS TV is not available and he said that penetration was about 10%, and that the lack of video impacted penetration in a big way. Towns with Video service see much higher subscriber take rates.

I was in disbelief - 20% penetration after six months of service was astounding. I pressed him for a few more minutes and he stood firm on his answers.

I then asked him when they would be getting the franchise approval in my town and he said - the Town Meeting is this Wed. Today.

Should be interesting to see what machinations are required to secure a video franchise. I’m going to go.

With a name that’s become a verb, plus great software, TiVo could be acquisition bait. But its share of DVRs is on course to be eclipsed this year by Scientific-Atlanta (SFA) and Motorola (MOT), the two largest cable set-top makers.

Most of its subscribers come from a deal with DirecTV (DTV), the satellite operator, which pays TiVo $1.15 a subscriber, and accounts for nearly 70% of TiVo’s users and 20% of its revenue. DirecTV last week extended the deal to 2010. It won’t market TiVo’s service, but the deal prevents TiVo from losing existing customers.

Last week’s jury verdict may boost TiVo’s chances to sign up cable operators other than Comcast (CMCSA), with which it already has a deal. Cable guys will find it difficult to work around TiVo’s patents, says Terence Clark, a lawyer who heads the national intellectual property practice at Greenberg Traurig. That could force Time Warner Cable and Cablevision (CVC) into licensing deals.

But the case doesn’t solve TiVo’s most pressing long-term problem. It still has a long road ahead as it tries to win over cable operators with its patent claims.

A buyout may in fact be the best exit strategy for TiVo. In the meantime, selling on Thursday’s pop in TiVo shares may be the best exit for investors. What lies ahead are many years of knocking on cable operators doors, a long, long story with no fast-forward button in sight.

Hat Tip - Seeking Alpha