'Hey, You're Not in Cable'

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That should grab your attention. And that opening salvo-a direct quote fired from Morgan Stanley Dean Witter & Co. managing director Rich Bilotti-certainly made attendees at the New England Cable Television Association conference sit up and take notice.

Last week in Newport, R.I., I had the honor of moderating the finance panel, where Bilotti, Yankee Group president Berge Ayvazian and Boston Globe telecommunications report Peter Howe all spoke at a session billed, "Broadband, Is It the Winning Hand: An Outsider's View."

Bilotti told attendees that if they thought they were in cable, they would lose the war because they were playing in a whole new field-broadband spectrum-where, thanks to the Telecommunications Act of 1996, the doors are wide open for cable, telephone companies and others to compete where they like.

Bilotti-whom Institutional Investor has ranked as the top cable analyst for the past three years, and one who can single-handedly move markets with a single recommendation-sent a wake-up call to those who were in attendance and not goofing off on the links or participating in the Regatta in the oh-so-tempting venue of Newport.

In a nutshell, he told cable operators to forget about cash flow over the next five years and invest in and focus on acquiring high-speed Internet-access customers because the phone companies, via DSL, are entering the market in a big way.

Bilotti bluntly added that 5 percent to 7 percent analog-cable growth was not going to excite Wall Street at all.

He said he has spent his last six months visiting cable's broadband competitors and, clearly, he is impressed with what he has seen during his travels, judging from his remarks at last week's panel.

Indeed, just the day before Bilotti spoke, SBC Communications made headlines with its announcement that it would give new subscribers Compaq computers if they signed on for the company's DSL service.

And the week before, SBC had announced that it would be offering a DSL setup in a box, to speed the deployment of its efforts in the high-speed-data arena. Clearly, Bilotti is impressed with SBC's pull-out-all-stops efforts to reach critical mass in the DSL arena.

Bilotti was semi-bullish on cable modems, but he said cable management has to open up its wallets. "If you have to incur start-up costs to get there, that's OK. The worst thing you could do is to pull back on your service deployment because you are trying to make a financial goal," he told attendees.

Those are words to keep in mind as many cable executives trek off to the next event on of our agendas, CTAM's "Digital Gold Rush: Mining the New Cable Economy." And hopefully, CTAMers will be more mindful of the challenges that lie ahead.

I have to be brutally honest here: I wasn't the only speaker at NECTA who was disappointed in the turnout for my panel. But I don't take it personally now that I know I wasn't the only one. Only some 100 attendees-about the same size crowd my panel drew-showed up for CTAM's "Marketing Report" last week.

And that was a shame, because some of cable's best minds-USA Networks' Doug Holloway, Time Warner Cable's Kevin Leddy, Cox Communications' Joe Rooney and AT & T Broadband's Doug Seserman-were all there to share their knowledge.

NECTA served up a five-star program with leaders and shakers sprinkled throughout. It's too bad so many of those in attendance seemingly chose to treat this important venue as a company-paid family vacation.

Frankly, it surprised me, given the competition in the Northeast sector, which is rife with overbuilders and competitors of all stripes. Go figure.

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