The Western Show: CEOs Set the Agenda

2003 will be remembered by the cable operators as a good year for holding the line on basic subscriptions and an exceptional year for growth in cable modem and digital services, said Brian Roberts, CEO of Comcast, in a panel discussion hosted by Larry King at The Western Show in Anaheim, California. Growth in high-speed data services has been above expectations this year, said Roberts, and looking ahead Comcast plans to "keep the pedal to the metal" in expanding its broadband lead. Comcast, which recently doubled the downstream speed of its residential cable modem service to 3 Mbps, is already planning on boosting speeds to 5 Mbps, 10 Mbps and even envisioning the potential for applications enabled at 50 Mbps rates, said Roberts. He also described HDTV as a franchise that cable "has got to own."


Cable operators have an enormous technical advantage over RBOCs and satellite competitors, said Glenn Britt, CEO of Time Warner Cable. Britt said it is easy to be dreamy about all the new services that could be deployed but it is much more important to pace the new offering to actual customer demand. He noted that over 5 million HDTV sets have sold so far and the forecasts for next year predict the market will double. Other market drives for 2004 include VOD, PVRs, cable modems and VoIP.


When asked about the RBOCs potential deployment of fiber-to-the-home, Tom Rutledge, President of Cablevision Systems, said an FTTP overbuild would only provide a functional equivalent to the HFC plant that the cable companies already have. He said that there is no evidence that a physical overbuild deployment has ever been a commercial success and that Cablevision has yet to see any FTTP in its territory. Regarding Murdoch's pending acquisition of DirecTV, Rutledge said it is important not to underestimate the potential market impact, given Murdoch's formidable record as a content aggregator. However, he also argued that the most lucrative segment of the video business will be advanced services that are best enabled over HFC.


High-definition video and flat screen TVs are the key consumer trends in the video business, said Bill Schleyer, CEO of Adelphia Communications. HDTV sets are providing a great sales boost to consumer retail channels, such as Circuit City and Best Buy, and this is where video service providers will make their sales, he said. Schleyer also argued that triple play service bundling is the killer app -- voice, video and data on one bill.


It's all about content, said Carl Vogel, CEO of Charter Communications. Regarding the ongoing saga of price increases for sports programming, Vogel defended the model of offering sports on separate pricing tiers. Vogel also predicts that VoIP will gain significant traction in cable networks, but he complained that equipment suppliers still need to get their prices down.