The head of cable operator Cablevision in New York says there could come a day when his company makes broadband its primary service and stops offering television. His comments come amid continuing tensions between cable operators and channel owners over retransmission fees. Millions of Time Warner Cable customers currently unable to receive CBS channels are meanwhile being told to use an antenna or the Aereo online service.

James Dolan, the chief executive of Cablevision Systems Corp, told the Wall Street Journal “there could come a day” when his company makes broadband its primary offering. He also suggested that the cable television industry is in a “bubble” that will turn out “badly” as young people opt to watch online video rather than pay for bundles of channels that they do not want. He admits that he rarely watches television and then often with his young children, who prefer to use Netflix over Cablevision broadband.

These rather surprising statements can be seen in the context of posturing by cable operators at the increasing cost of retransmission fees collected by broadcast channels.

Millions of Time Warner Cable customers in New York, Los Angeles and Dallas have seen CBS channels blacked out for over a week as a result of a continuing dispute over these payments and what the cable company calls “outrageous demands”. CBS is meanwhile blocking online access to programming for Time Warner broadband customers.

Time Warner Cable went as far as suggesting to its customers that they could watch CBS over the air or through Aereo, which is offering a one-month free trial.

New York was the launch site for Aereo, a disruptive online offering that receives broadcast television signals through a remote antenna array and streams them over the internet. That represents a major challenge to the concept of retransmission fees.

So far Aereo has survived legal challenges by channel owners. It begs the question, if Aereo can simply relay broadcast signals on behalf of its subscribers could cable operators offer something similar? After all, that is the basis on which cable television was founded.

Cablevision, which serves the valuable New York Market, has also come under competitive pressure from Verizon and its FiOS fibre optic service. Nationally, Verizon added over half a million FiOS television customers over the last year.

Cablevision lost 388,000 video customers in the last year, with subscribers falling to 2.8 million, although that largely reflects the disposal of cable systems in other states.

As the ninth largest multichannel video service provider in the United States, Cablevision could represent an acquisition target for further consolidation among cable carriers.

Despite much excited talk about “cord cutting”, or online services like Netflix eroding traditional television viewing, the reality is that consumers increasingly require higher speed internet connections to use these services. Broadband is therefore an increasingly important element of the value proposition of cable providers.

As analysts have predicted for several decades, people will ultimately pay for connectivity, while video, voice and data services will ultimately converge, rather than simply being bundled on a single bill.

The model of bundling together subscription packages of channels in an all you can eat buffet remains too lucrative for all concerned to contemplate a world of genuine à la carte choice, which would probably end up costing consumers even more.

Equally, the concept of the “triple-play” offering of television, telephone and internet access as a package is so well established it is difficult to see cable operators simply concentrating on connectivity, although the emphasis within those bundles may change.

Meanwhile, consumers are prepared to pay for the utility of broadband, which is relatively profitable, while they may increasingly resent paying for television programming.