Below is a chart of the Telstra share price over the past five years. It is clear that we have not seen the projected growth and many struggle to see what the future holds for Telstra. Is the company an income or growth stock?

In my opinion, it may be that we eventually see a capitulation by the company in order for them to stay in any way relevant. As every day passes, the value of their copper network declines almost in line with the number of customers who continue to be frustrated at so many aspects of their business.

The younger generation and the millenials that offer so much promise for the future are digesting their technology in ways we could not have imagined even as recently as five years ago.

It is important to make the point that it is not just Telstra that are seeing their business model under continued and relentless attack. Everywhere we look on the communications landscape incumbent telephone companies are under siege by disruptive technologies that threaten their existence.

What will become of all that copper in the ground?

What will become of all those Telstra exchanges in the future?

Will they be made redundant and the land redeveloped for other uses such as apartment living or retail and commercial? So many of them are positioned in prime locations.

Will they simply be turned into massive data centres that house our software applications as we all move towards cloud computing and software as a service?

So many questions and so many answers that only the future will divulge.

More SUP.

In the USA, broadcast viewership is dropping, which means the cost per viewer is rising. Same for cable where viewers are stagnant, viewership is declining (number of hours of viewing) and the cost of content is rising. Satellite has been growing marginally but that could end at any moment and it shares the same content cost increases as cable.

Meanwhile, internet service just gets faster and cheaper thanks to companies like Pipe Networks who are currently rolling out their undersea cable to Guam which will then connect in to the West Coast of America.

As Robert Cringley correctly surmises, Moore’s Law works in two ways. It makes digital products ever cheaper AND ever more powerful. This has profound meaning for internet TV because it continually increases the bandwidth we can get for the same dollar while giving our devices the capability to do even more with the same bandwidth.

This is the trend, then: our available bandwidth will go up while our devices will become more powerful, making better use of the bandwidth. The result, as always with Moore’s Law, is either better services or lower total cost or maybe a little of both.

What this means for the future of television is that we’re approaching a point where internet service will equal and then be lower than the marginal per-viewer cost of the broadcast TV model.

This crossover will inevitably happen with the only question being when.

That’s a function of bandwidth costs decreasing at 50 per cent per year and processing power increasing at 50 per cent per year. Some suggest the crossover will happen around 2015, which used to seem like a long time away but no longer does.

When internet TV becomes dramatically, unequivocally, and inexorably cheaper than the other three distribution models, those other models will quickly go away.

Five years from now, local TV stations will have the same complaints that local newspapers have today as many of them may go out of business. Cable TV operators will become ISPs. Phone companies will be ISPs and analogue voice service will be gone completely.

The regulatory implications of these changes should be interesting. Who, then, will be the players in this future TV? For the most part, they will be the content providers, which probably doesn’t mean traditional networks. And the networks know this. Networks will go away.

But content will endure bringing new value to I Love Lucy episodes and almost anything else people like to watch. The TV networks are throwing their lot together. Their big competitors will be Google, Apple, and a player yet to be even founded (definitely NOT Yahoo OR Microsoft). Google will differentiate itself as always through technology.

Google has no idea what people want to watch on TV, nor do they particularly care. Apple, on the other hand, cares. Apple will attempt to become the dominant content provider to the 20 per cent of the market that spends 80 per cent of the money, with margins high enough to use Google distribution and still come out ahead, leaving to Page and Brin the 80 percent of content that generates 20 per cent of revenue.

Content is software. TV is software.

And the great thing about entertainment is that it is software we can be induced under some circumstances to buy over and over again like those teenage girls who paid to see Titanic dozens of times.