Chicago -- The battle for high-speed-data customers isn't over yet, but a
panel of top industry executives said at the National Show general session here
Monday that cable is poised to hold the lead it has gained over
With 12 million customers, cable has about 20% of the high-speed-data market,
meaning that there is still a lot of room for growth despite increased
competition from telephone companies.
"Consumers are figuring out that right now, cable modems are the way to go,"
Comcast Corp. president Brian Roberts said.
But AOL Time Warner Inc. chairman Richard Parsons said the cable industry
shouldn't count out the telephone companies yet. "The battle surely isn't over,"
he said. "[Telephone companies] have plenty of money and a lot of steam."
While competition is fierce, Parsons said it would be good for the industry
because it forces innovation.
Microsoft Corp., once thought to be a potential competitor to cable-modem
service, decided about six months ago to pursue a strategy of software add-ons
to the cable industry rather than trying to compete directly with cable-modem
Microsoft chairman Bill Gates said the company's MSN Internet-access service
was contemplating a "bring-your-own-access" high-speed-data offering, but
scrapped it after deciding that it wasn't worth the trouble.
Gates said that with cable's success in the broadband arena, it is one of the
most exciting times to be in the industry, even more so than seven years ago,
when Microsoft touched off a run-up in cable stocks by investing about $1
billion in Comcast.
"The revolutionary thing that will come, and I think sooner rather than
later, will be actually doing everything over IP [Internet protocol]," Gates
said. "Not as a broadcast stream, but rather an individualized IP stream going
into the home. If we don't do that, than the ability to have high definition
will always have to be rationed out."
But with IP streams of video and data into the home, those constraints are
lifted. While Gates said it could take two to four years before the technology
becomes a reality, "it says that this platform, there is no limits in terms of a
platform. Even the video terms can be revolutionized."