Comcast Execs Vow to Keep Pedal to Metal

Author:
Updated:
Original:

Baltimore-Comcast Corp. plans to re-invest its digital-cable revenue into the launch of one or two new products each year over the next decade.

So said Comcast cable unit president Steve Burke last Wednesday, when he accepted the Cablevision magazine/Bill Daniels Operator of the Year award here. He shared the stage at the East Coast Cable 2000 event with Comcast Corp. chairman Ralph Roberts.

"We have an embarrassment of riches," said Burke of the number of new products the industry could introduce, including digital cable, high-speed data, telephony, video-on-demand and interactive television.

Digital cable, last year's big push for Comcast, currently generates an incremental $100 million per year in free cash flow, Burke said.

When faced with the decision of whether to plow the money back into the company or keep the cash, Roberts said, Comcast opted to spend the money on rebuilds. Because so many Comcast systems have been rebuilt, Roberts noted, it won't need to spend as much on such projects, "and Steve [Burke] will have more cash to do the things he wants to do."

But because of its recent acquisitions, Comcast will have to spend some time and money upgrading its newly purchased systems.

The company is on a fast track to rebuild 85 percent of its acquired systems within the next 18 months, said Burke. Some of those upgrades will be done within four or five months.

"I get a report every Monday" on the status of the projects, Burke said. "There's no higher priority in the company than rebuilding the systems."

Employees who came to Comcast through acquisitions are often pleased with the pace of construction, Burke noted. "Some of the companies we came into were used to seven-year rebuilds."

Like others in the industry, one of Comcast's biggest challenges today is finding enough new employees.

"Without the people, you can't get the growth," Burke said.

Despite the challenge, "we have been able to keep on schedule" with the rebuilds, Roberts said.

The investment in rebuilds should allow Comcast's newly acquired systems to share in the new product launches planned for the next several years. High-speed data is the focus this year, Burke said, with video-on-demand likely the priority for 2001 and perhaps interactive television in 2002.

Comcast's role in selling phone service is a little less clear, although the company is already testing Internet-protocol telephony in New Jersey.

"The technology works," Burke acknowledged, but there are a number of business issues that must be addressed, including billing and customer care.

"We have a healthy respect for the complexity of the [telephone] business," Burke said. "We'll be in it-just not immediately."

Comcast has also acquired some systems that had already introduced telephone service. Ultimately, said Burke, Comcast must have a bigger role in selling data and telephony services to commercial businesses, as well as to consumers.

The MSO and AT & T Corp. have a "most-favored-nation" agreement, under which Comcast would sell AT & T's telephone services under the best terms available to a cable operator.

Burke predicted Comcast would be in the telephone industry within the next two years.

Comcast made the decision not to rush to market with all its new products at once. "We're better off concentrating on one or two, and making sure the pipe is full going forward," Burke said.

Related