Entropic brouhaha proves that 'cone of silence' doesn't work in 21st century

I once mistakenly attended a Paul Kagan Associates financial conference. Being a tech guy, I have an inherent distrust of the financial community and generally blame it for everything that goes wrong in the world, and this conference seemed to confirm my worst fears.

Occurring just as the dotcom fuse was nearing its end, everyone there was looking for the fast buck the next Internet visionary would generate. What threw me off was that the speakers were the usual suspects for conferences I attended: tech vendor and service provider executives who would lay out plans for the next five years of technological development.

I was stunned when the audience, instead of questioning timelines and nitpicking the technology, started throwing money at these guys. When, they wanted to know, could they invest? How much did these guys need? Where should they mail the checks? The implication, which I didn't understand at the time, was that the turnaround would be quick: The money would be spent, technology deployed and repayment made in the gazillions of dollars before I grew my first gray hair.

I knew what these guys were describing was five years away from fruition. What I didn't understand was that this demonstration of irrational exuberance was the first wind of a massive financial raspberry that would blow out the dotcom fire, along with a dozen or so fortunes and more than a dozen companies, just because someone didn't understand that these things take time and that technology changes don't take place overnight.

I remembered this conference recently when news stories abounded that Entropic Communications was reaping a financial windfall [1]. Someone--and Entropic executives have made it clear it wasn't them--leaked word [2] that Comcast would be offering whole-home DVR using Entropic gear. It took no more intrepid reporter than a Comcast subscriber to know that the MSO was at least toying with what it now officially calls AnyRoom DVR; multiple subscribers had received messages telling them the service would soon be available. The Entropic piece, if it didn't come from them, is a bit more of a mystery.

Comcast has since come clean [3] about its plans, first stating that it would be rolling out the service in the Pacific Northwest, then conceding that maybe 19 or 20 systems would get it. Probably nearly every Comcast subscriber, save those in the most backward systems, will be offered AnyRoom DVR, and those few who aren't could be why Comcast was cautious about spreading the word.

Certainly any engineering-driven company must be wary of the financial guys who make or break a rollout before it even has a chance to start rolling. Or perhaps--and this is just speculating--Comcast didn't want to become another footnote in cable's less-than-stellar track record of technology announcements ...

... Like the time in 1992 when John Malone and General Instrument thought they owned the digital market, so Malone stood before the worldwide media (via phone) at a Western Cable Show and introduced the "500-channel universe." The problem is that the rest of the industry wasn't so sure it wanted to be led by Malone and GI, and ended up demanding standardization which, in turn, ended up being MPEG-2 which, in turn ended up delaying the digital revolution that Malone had so boldly proclaimed for about six years. This did not leave the financial community happy.

The next press conference that day also concerned General Instrument and a small device that was being tested by Century Cable in Los Angeles. The system was moving data over broadband cable networks. The term cable modem wasn't mentioned, but that's what the conference was about. That announcement was really the first public word on a technology that has irrevocably changed cable--but it got short shrift in light of Malone's more expansive 500-channel universe.

In 1996 amid a howling hurricane in the Northeast, Cablevision Systems and Sony announced a set-top partnership that they said would turn the industry on its ear and destroy forever the set-top duopoly. Obviously that never happened, or the FCC wouldn't be hounding Motorola and Cisco these days.

Even recently, Cox Communications, which generally does a good job at measuring its announcements, got ahead of itself with its mobile wireless plans. The company's deployment, as far as I know, is still "imminent."

There have been cable announcements worthy of the hype, but, with this kind of record it's reasonable that Comcast would want to develop and deploy whole-home DVR on its own schedule; it's unreasonable to think that it could be done under a cone of silence. It's reasonable to think that Entropic should be rewarded for winning an important contract--although Comcast has not yet (that I've seen) confirmed Entropic is indeed the vendor of choice--but it's unreasonable for the company's stock to soar so high it will inevitably fall back to earth with a deafening thud.

It's been said before and it bears reiterating: This is not 1992. News (and sometimes what purports to be news) moves around at light speed assisted by cable's broadband networks. If something indeed is happening, it seems more reasonable to just 'fess up, admit that not everyone is in line to get whatever it is but some lucky subscribers will be tasting the future of cable television, and proceed from there.

This is, after all, 2010. You'd never get away with claiming there were men on the moon today, and you can't get away with claiming that Comcast is not offering whole-home DVR service--with or without Entropic.