Cable Chiefs Differ on Access Approaches

Author:
Publish date:
Updated on

New York -- Charter Communications Inc. CEO Jerry Kent
warned last week that while content is important, cable operators shouldn't lose sight of
the core business -- distribution.

"A lot of people believe content is king," Kent
said, speaking at an investment conference sponsored by Waller Capital Corp. "It's
important, but it's limited by the delivery mechanism. I think you're going to see
distribution become more important because now, content can be developed to fit a much
more robust delivery mechanism."

With that expanded pipe comes more responsibility. Although
Internet-service providers have been bucking cable operators that deny them access to
broadband networks, Kent said, the controversy swirling around open access has more to do
with cable's inability to articulate its message.

"This industry is very good at building systems --
very good entrepreneurs. We're much better at customer service and marketing, but we're
still lousy at [public relations]," Kent said. "We always tend to lose the PR
battles, and I think we've done a pretty bad job of communicating this whole open-access
issue."

He added that users of Charter's high-speed Internet
services -- and those from most other cable systems -- can access other ISPs with a simple
click of the computer mouse.

"I think it's much more efficient to allow you to
click a mouse than to allocate a bunch of different capacities to each individual
ISP," Kent said. "This is about consumer choice and competition. Unfortunately,
the other side is articulating that better than us."

But while Kent blamed the open-access debate on bad PR, one
former cable operator and current alternative-access provider said the problem comes down
to the ways cable companies do business.

James Vaughn -- former head of MSO FrontierVision Partners
L.P. and current head of Western Integrated Network Inc., a new competitive
telecommunications provider -- said the traditional mind-set of the cable industry has not
helped operators to exploit the business potential of reselling broadband capacity.

"The issue of open access comes down to the issue of
customer ownership," Vaughn said. "That's one of the things that has to change.
These two issues exist side-by-side. You're going to have national ISPs and regional ISPs
that will need access to high-speed capacity. I think you can reach a reasonable business
arrangement so that they can peddle their brand name in your marketplaces, and you're the
distributor in that particular case. In the long-term ,that is the preferred scenario.

He added, "We all have the same desire to own the
subscriber. There are different ways to own the subscribers and serve that customer. We've
just got to get rid of some of the legacy mentality."

Related