Chicago -- With industrywide subscriber losses topping 1 million and some
Wall Street analysts anticipating that cable will lose another 65,000 customers
this year, a panel of CEOs from the seven top MSOs in the country said new
services like personal video recorders and voice over Internet protocol that
differentiate cable from direct-broadcast satellite will reverse the trend.
"We've got to sell the full suite of services," Charter Communications Inc.
CEO Carl Vogel said at the closing general session Wednesday at the National
Cox Communications Inc. CEO Jim Robbins said focusing on the triple play of
voice, video and data has allowed his company to buck the trend -- Cox gained
subscribers in the first quarter, and it is expected to finish the year with at
least 1% subscriber growth.
While the other operators have focused on digital-cable and high-speed-data
services, all see opportunities in voice service once VoIP is deployed.
Charter, Comcast Corp. and Cablevision Systems Corp. are already testing VoIP
service in a few markets. Tom Rutledge, president of Cablevision's cable and
communications division, said VoIP should be available to the MSO's entire
footprint -- 4.4 million homes in metropolitan New York -- by the end of the
Cox -- which has a successful circuit-switched telephone service -- said it
would deploy VoIP when it becomes available, but Robbins was less enthusiastic
than his peers were. "We will evolve to VoIP when we think it is ready," he
said. "Our threshold of customer service is higher than most. We have to be
absolutely sure that we got it right."
Comcast -- which inherited several circuit-switched-telephony markets when it
acquired AT&T Broadband in November -- has held off on telephony. But
cable-division president Steve Burke said the MSO still believes voice service
could be a strong business.
Burke said reversing customer losses and rebuilding the former AT&T
Broadband systems was the highest priority. "We had a lot of stuff to
accomplish," he said, adding that the rebuild won't last forever. "[The rebuild]
will last until about the end of 2004. Then we really need to make phone
At Time Warner Cable, chairman Glenn Britt said phone service is being tested
in Portland, Maine, with good early results.
"We're almost fully rebuilt, we have high-speed data all over and VOD
[video-on-demand] is fully deployed," Britt said. "The next priority is
The operators shrugged off suggestions that pricing cuts from regional Bell
operating companies would slow growth in high-speed data, adding that
cable-modem service is more readily available and more reliable than phone
companies' digital-subscriber-line product.
"[DSL] should cost less because it's worth less," Rutledge said.
But they were less glib when it came to rising programming costs.
Robbins, who has been one of the more outspoken cable CEOs on the matter,
deferred to Mediacom Communications Corp. chairman Rocco Commisso.
Commisso, who has also been outspoken on the issue, said while Washington is
concerned about rising cable rates, it should focus its attention on
programmers. "The government should know that this time around, it's not our
fault," he added.
But when the panel was asked if by freezing programming rates, cable
operators were choking off the ability of content providers to develop new
programming, Rutledge said that was not the case.
"There are opportunities for programmers to make money in different ways,"
Rutledge said. "It's not that we don't want them to make money. For some
products, having [rates] go up 10% per year isn't appropriate."
Commisso was a little more blunt.
"None of us has more than a one-month contract with our customers," Commisso
said. "Just because [programmers] have long-term contracts, doesn't mean they
have to be undisciplined."