Sachs: 2002 Was a Paradox

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Despite turmoil on Wall Street, cable-industry investment in broadband paid
off last year as new product lines posted impressive gains, National Cable &
Telecommunications Association president Robert Sachs said Thursday.

According to the NCTA, cable operators ended 2002 with 19.2 million
digital-TV subscribers, up 26 percent over 15.2 million in 2001.

The industry also had 11.3 million high-speed-data subscribers, a 57 percent
increase from the prior year's 7.2 million.

Local phone penetration reached 2.5 million, up 47 percent from 1.7
million.

While new services continue to win over consumers, investors lost confidence
in cable, with its shares on average losing more than 50 percent of their
value.

"2002 was really a paradox," Sachs said, adding that publicly traded cable
companies had adopted uniform reporting standards in part to regain the trust of
Wall Street investors.

Late last month, the Federal Communications Commission released a study based
on June 30, 2002, data that speculated that cable would lose basic subscribers
by the end of the year for the first time in history.

According to the NCTA, basic-cable penetration last year grew by 0.7 percent,
from 72.9 million subscribers to 73.5 million. The association obtained its data
from Nielsen Media Research, while the FCC relied on Kagan World Media for its
estimates.

Over the next 12 months, the industry's focus will center on adding two new
services to the digital mix -- video-on-demand and subscription-VOD services --
Sachs said.

The NCTA also considers as a priority FCC adoption of last month's
digital-TV-compatibility agreement with the consumer-electronics industry.

Sachs said the trade group would support passage of legislation if the FCC
determined that it lacked authority to codify parts of the agreement into its
rules.

Following Comcast Corp.'s merger with AT&T Broadband last year and this
year's projected spinoff of Time Warner Cable from parent AOL Time Warner Inc.,
Sachs said he did not expect further consolidation.

"I think we are going to see a settling down of the industry," he said,
adding that cable was "still a place for medium-sized and smaller
companies."

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