(COMTEX) B: Broadband: Buzzword in Cable 2K
B: Broadband: Buzzword in Cable 2K
New York, May 12, 2000 (123Jump via COMTEX) -- Broadband was the hottest
buzzword at this year's National Cable Television Association Convention (C2K)
held in New Orleans from May 7-10. The general consensus was that the
long-promised advanced interactive broadband era has finally arrived.
Touted as the most comprehensive cable television convention of the new century,
C2K had exhibits covering 350,000 square feet of floor space and showcased the
latest in technological and programming innovations. C2K also offered a diverse
array of educational sessions and panel discussions covering new business
opportunities, public policy, finance, marketing, technology, management and
technical operations.
Most of the panel discussions focused on broadband, and some of the industry's
most senior CEOs discussed the challenges faced by the cable television
industry. These include: the emergence of new services and programming that are
the future of broadband communications, the role of cable broadband in providing
the programming and services that are key to the future of telecom, and the
synergy between the Internet and broadband that is creating new partnerships.
The highlight of the Convention was reserved for the last day (May 10)when three
of the industry's top notch executives - Microsoft (MSFT) CEO Steve Ballmer,
Excite@Home (ATHM) CEO George Bell and America Online (AOL) President Bob
Pittman outlined the challenges facing the industry in a panel discussion with
the tongue-in-cheek title- "Cable's New In-Laws."
Ballmer reassured the audience that Microsoft's investments and development
efforts in cable and interactive TV did not constitute a bid to take control but
were aimed at fostering cooperation with other players in the industry. He said
"We've grown up as a software company - we will spend $4 billion on software
development. The only way we'll be successful is by being a fantastic partner to
you. I think there is so much work to do to bootstrap this phenomenon from a
software perspective," adding, "We still have low penetration of broadband and
interactive technologies. The opportunity is a rich user interface, deep service
integration, coordination between devices,personalization, privacy, content
protection and rapid development and deployment."
Asked about Microsoft's plans in the cable sector, Ballmer responded "there is
no reason why we can't see a deployment of 15 million set-top boxes by 2003."
Excite@Home's CEO George Bell, spoke of the newly designated "in-law" status
conferred his company. "We were a cable consortium company three to four years
ago," he said. However, despite the various problems plaguing his company, in
particular turbulent corporate ownership and financial status, the company has
emerged unscathed and firmly on a path toward growth. "Today the franchise is 87
million homes under contract worldwide - including 15 million DSL homes.Our
global footprint is 4.2 times larger than Time Warner's. We have rethought our
business model and expect 3 million subscribers by the end of this year, 6
million by year-end 2001 and 10 million by 2002. "
And the the cable industry's prodigal son, AOL President Bob Pittman, talked
about his return to the cable industry after many years, as well as his thoughts
on the future of the cable industry. "The Internet is a growth catalyst for
cable and the perfect partners for the cable industry are the ISPs, not just
AOL," he said.
On the second day of the convention, many top cable executives offered their
views on the state of the cable industry in a panel discussion, which had a few
uncomfortable moments.
For instance, moderator Sallie Hofmeister, a staff writer for the L.A. Times hit
too close to home when she asked Time Warner's (TWX) Chairman about the recent
Time Warner-ABC fiasco. In fact Federal Communications Commission (FCC) Chairman
William Kennard stated at the convention that he would like the marketplace to
work out issues that arise voluntarily, but not at the cost of consumers. He
expressed strong concern over the spat between Walt Disney Co.'s ABC Network and
Time Warner Cable, which resulted in a public and political uproar when viewers
in 11 cities were without ABC programming for more than 36 hours last week.
"There is an unsettling fear among consumers that in the Internet age so many
things are beyond their control. It has called into question whether the
industry can be trusted to be an honest gatekeeper to the Internet and that
concerns me," Kennard said.
On the question of the recent poor performance by cable stocks in the market,
Cox Communications(COX) CEO Jim Robbins commented, "The market is very fickle
and analysts are looking for anything they can get worried about. The message is
that we have to deliver."
And according to AT&TBroadband CEO Dan Somers: "We haven't fallen out of favor.
The times are difficult in assessing where the new economy is going, where the
old economy is going. I don't think we understand the power of the industry in
the long run. If we keep our heads down and just block and tackle, we will do
well in the long run."
This view was echoed by Comcast (CMCSA) CEO Brian Roberts: "New products are not
blue sky, they are here now, so these are recurring revenues. We shouldn't
change our strategies because this industry is on a fabulous path. Cable is a
terrific buyright now. We are adding new services, new revenues and the growth
rate will get better over time."
And Charter CEO Jerald Kent a veteran who's been in the business for 17 years
said: "I have never seen more opportunity for additional revenue streams. We
have the best delivery mechanism. DBS, phone companies can't compete effectively
with the broadband pipe. The market is taking a step back and looking at
competition and overbuilds, but as we report quarter after quarter of good
results, I'm confident that the market will take note of that."
And though many analysts and deal makers expect cable operators to overcome
competition, especially from satellite providers, they also expect the industry
to go through a wave of consolidation. In fact Laura Martin, analyst with Credit
Suisse First Boston forecasts that ultimately only three providers will survive
and emerge triumphant: AOL/Time Warner, which will be truly formidable when its
merger is completed; AT&T; and a third contender yet to emerge.
But if consolidation will create powerhouses of content, distribution and
Internet service, can heightened regulatory oversight be far behind? FCC
Chairman William Kennard is of the opinion that these issues should be worked
out and tackled by the marketplace itself if and when they arise but only if the
consumer is not adversely affected by the them.
And as proof of the general perception that the long-promised advanced
interactive broadband era has finally arrived, dozens if not hundreds of new
technology deals, alliances, product introductions and demos marked the NCTA
Cable 2000 convention.
Some of the deals announced: Orlando, Fla.-based interactive set-top technology
company Prasara (slated for acquisition by PowerTV) and Canon Information
Systems' deal to enable interactive TV companies to print content directly from
their PCs onto new Canon printers. This deal is similar to that announced
recently by AT&T and HP to develop new printers for the same purpose;
Motorola (MOT) and Microsoft announced they have signed an agreement to deliver
new interactive TV offerings to Motorola's DCT-2000 and DCT-5000+ interactive
digital boxes using Microsoft's recently announced TV Access Channel server. The
two companies also announced that their collaborative technology will support
the host of video-on-demand companies that will integrate with Microsoft's TV
platform; San Francisco-based SoftNet's ISP Channel announced plans to upgrade
its broadband capacity and quality through a multi-year deal with AT&T.
In fact, during one of the panel discussionsChairman Kennard announced that AT&T
Corp.'s planned $58 billion acquisition of the cable television company MediaOne
Group should be approved in a "matter of days." The deal will make AT&T the U.S'
biggest long-distance telephone and cable television company.
One notable introduction of a new product among the many was the SURFboard(R)
4100 cable modem by Motorola's Broadband Communications division. This is the
first cable modem to utilize the latest silicon technology, in which all
functions are integrated into a single chip for improved performance.
And among dozens of demos, those by Liberate Technologies (LBRT), the leading
provider of software for the delivery of enhanced television content was by all
accounts worth mention. Liberate showcased nineteen demonstrations, including
AOLTV. Specifically, Liberate showcased its end-to-end, open standards software
services.
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