Policy

Cable’s Taking VoIP Lead: Sachs

1/02/2005 7:00 PM Eastern

The year 2004 was a big one for the rollout of advanced cable services, National Cable & Telecommunications Association president Robert Sachs told reporters recently during a year-end briefing — his last as NCTA chief.

“By the end of this year, our industry will have invested approximately $95 billion, most of which is reflected in the upgrade and rebuilding of infrastructure, which is now largely complete. And that in turn has enabled our companies to launch and roll out advanced digital broadband services,” Sachs said.

Sachs, who announced his resignation as NCTA president in June, expects the NCTA board will announce his successor during the first quarter of 2005.

500k PHONE ADDS

The NCTA said cable operators added about 500,000 telephone customers during 2004, mostly through new voice-over-Internet protocol systems.

“Now that most of the [cable] companies have readied their networks and started to introduce VoIP, in 2005 we will see cable emerge as the leading provider of voice-over-IP residential services,” Sachs said.

On the video side, cable operators offered HDTV programming in 177 out of 210 U.S. TV markets, representing 90 million cable homes passed. Sachs also said that 17 cable networks now offer HDTV programming, either full-time or as a substantial part of their schedule, and operators were carrying the digital signals of 450 broadcast stations as of September.

Sachs also reviewed the industry’s key legislative and regulatory issues of the year, including the Janet Jackson Super Bowl “wardrobe malfunction,” which prompted cable systems nationwide to run more than 3 million public-service announcements throughout the year explaining the parental controls available on cable.

He also noted that efforts to implement a la carte cable pricing “did not materialize” after the FCC released a study that found a la carte pricing “would lead to less choice and higher pricing for consumers.”

Looking ahead, Sachs said the coming year holds the possibility of several significant developments affecting the cable and telecommunications marketplace, including a U.S. Supreme Court decision in the Brand X case dealing with the regulatory classification of cable modem service; possible action by the Federal Communications Commission and Congress on the digital TV transition; and a potential overhaul of the Telecommunications Act of 1996. FCC chairman Michael Powell, among others, have called for major updates to the Telecom Act because of the impact of Internet-based technology on a variety of communications platforms. But cable leaders, including Comcast Corp. CEO Brian Roberts, have urged Congress not to fundamentally overhaul that landmark legislation.

'STABLE’ SETUP

The NCTA prefaced its summary of the year’s cable developments, including the telephone competition aspect, by pointing out that the stage was set by “[a] stable regulatory environment that has created a positive climate for cable companies to invest in new technology.”

“Cable’s success always has been based on the ability of our companies to respond quickly to consumer needs. That’s led to our $95 billion capital investment over the past eight years to provide digital broadband services to customers,” Sachs said in the statement.

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