For example, we've sold local and regional hospitals on the advantages of wide area networks and video conferencing for telemedicine. Not only can hospital staff stay current with the latest medical advances for continuing education credits, he says, but doctors can consult with distant specialists whenever needed, such as the live video feed from arthroscopic knee surgery going out to experts at a top clinic a thousand miles away. And part of the reason is that both public and private educational and health facilities in these small towns have not had a choice until now. The only other option has been the local telephone company, he says, and affordable T1 phone lines at 1.5 kilobits for data services cannot beat HFC cable speeds at 100 Megabits, and at least a D3 telco line is needed for full-motion video transport. Cable operators can take advantage of the migration in loyalties to win more telecom customers.
Cost provides the competitive advantage.
Instead of buying this capacity from USWest or BellSouth, local exchanges can pay Galaxy for packet data switching at nodes designed with voice in mind. Cordova identifies the primary challenge and opportunity for cable operators. Programming rates are rising two to four percent every year, but we risk losing residential customers to direct broadcast if we raise our rates, and we cannot afford to give any services away. If we're keeping the same cash flow, profitability depends on working the margins. All the services we sell apart from basic cable help us pay down the costs of deploying fiber in the first place, which includes connecting local schools and hospitals.