Chicago, June 10 (Bloomberg) -- After betting more than $100 billion on cable acquisitions in the past year, AT&T Corp.'s Michael Armstrong will make his debut at next week's National Cable Television Association show, the largest annual gathering of the industry he now dominates.
Armstrong, chief executive and chairman of AT&T, the largest U.S. telephone company, will deliver the keynote speech at this year's conference, to be held in Chicago June 13 to June 16. It will be the first time a telephone executive of Armstrong's stature has addressed the conference, reflecting the changing look of the cable business.
In less than a year, the industry's gone from dozens of regional operators to just a handful of big players, mostly because of a series of acquisitions by AT&T and billionaire investor Paul Allen. They're all believers in a future in which cable lines, married to advanced technology, will link homes and offices with phone service, fast Internet access and an array of new television features such as electronic mail and shopping.
''With the dwindling number of cable operators left standing, they could do the convention from inside the C-Span bus,'' said Gary Arlen, president of Arlen Communications Inc.
In fact, the 48th annual NCTA conference is expected to attract a record attendance of about 30,000. Cable is in the midst of an unprecedented period of growth as a robust U.S. economy, fueled by low interest rates and low inflation, is helping to drive billions of dollars into the business.
''The stars are aligned as favorably for the cable industry as they've ever have been,'' said John Corcoran, analyst at Stephens Inc.
'General Euphoria'
''There's a general euphoria in the industry now. We finally are starting to realize the additional revenue resources through new services like cable modems,'' said Joseph Duggan, partner at Waller Capital Corp., an investment bank for the cable, Internet and communications industries. ''There's been some watershed deals in terms of volume and pricing.''
Consolidation will be a hot topic at the conference, especially with some companies being acquired for as much as $5,000 per subscriber. The broader theme, however, will be how surviving cable companies plan to integrate new services, both financially and technically.
''Wall Street is eventually going to demand, since it has funded this wave of consolidation and upgrades, for these companies to show a return,'' Corcoran said.
After the completion of pending transactions, the top seven companies will provide service to more than three-quarters of the U.S.'s roughly 70 million cable customers. AT&T will be the largest, followed by Time Warner Inc., Comcast Corp., Charter Communications Inc., Cox Communications Corp., Adelphia Communications Corp. and Cablevision Systems Corp.
Plans for the Future
''There are other industries coming in and paying tens if not hundreds of billions of dollars to enter the cable business,'' said Jessica Reif Cohen, analyst at Merrill Lynch & Co. ''It will be very interesting and important to hear (the executives) articulate why they are doing it and what they plan to do in the future with new services and equipment.''
The conference also is likely to be chewing over a federal judge's ruling earlier this month that said AT&T must allow Internet service providers to use its cable-TV networks in the Portland, Oregon, area.
There will be a lot of discussion over the ruling's potential repercussions, analysts said. For instance, people will debate the decision's possible effect on AT&T's pending purchase of MediaOne Group Inc.
''Everybody is going to be buzzing about the Oregon ruling,'' said Duggan, who added that he's ''cautiously optimistic'' that that ruling will be overturned.
Main Speakers
On the programming side, Rupert Murdoch, chairman and chief executive of News Corp., the world's fifth-largest media company, will deliver the closing speech Wednesday. It will be the first time Murdoch has spoken to the group.
Other speakers will include Sumner Redstone, chairman and chief executive of Viacom Inc., which owns cable channels MTV, VH1 and Nickelodeon, and Gerald Levin, chairman and chief executive of Time Warner, currently the largest cable system operator as well as owner of cable channels such as CNN, HBO and TNT.
Old-fashioned content such as traditional TV shows will be intertwined with new technology aimed at giving viewers a new viewing experience that emphasizes choice and interaction with the TV through Internet or other means.
Microsoft, whose Chairman and Chief Executive Bill Gates spoke at the conference last year, plans to unveil a series of upgraded software and services for interactive TV, analysts said.
The world's biggest software maker also is expected to introduce a TV set-top box that runs on its Windows CE operating system, Arlen said. Microsoft also may announce that its WebTV service, which links conventional TV sets to the Internet, will be offered by a cable company for the first time, analysts said.
In addition, startup companies like closely held TiVo Inc. and Replay Networks Inc. will be showing off their new devices that allow viewers to personalize their TV viewing experience through interactive technology.
''I think these types of companies have a very bright future,'' said Corcoran, who cited industry research that says adults watch about 7.5 hours of TV every day.
''Watching TV is the unofficial national pastime in the U.S.,'' he said. ''You can't beat it.''
Jun/11/1999 8:26
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