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To: Goldbug Guru who wrote (199)	6/17/1999 12:45:00 AM
From: Goldbug Guru	Respond to of 963

Cable bets its future on the Net, not on HBO Thursday, June 17, 1999 By Ken Zapinski, Post-Gazette Staff Writer Connecting to the Future/One in an occasional series Paul Allen is betting $15 billion that as computers and people spend even more time together in the future, the cable television's thick, black coaxial line will be what ties them all together. Allen has placed that big bet in just the last year, buying cable companies across the county as the centerpiece of his "wired world" strategy. An ill-fated venture into direct broadcast satellite technology years ago helped convince him that cable will be the primary pipeline carrying the bits and bytes of a new digital way of life. As computer technology improves and processors become smaller and smaller, more and more of them will work their way into our lives, he believes. And they will all need to talk to each other over networks, much as millions of computers around the world talk to each other over the Internet today. And they will radically transform our lives. What kind of transformation will it be? No one really knows. "We really can't project what will run across this platform," said Bill Savoy, president of Vulcan Northwest, Allen's venture capital firm. But that's OK, he said. When PCs first hit the scene, no one could have predicted how they would be used today. "I don't know where it ends up," Savoy said. That could just as well have been the slogan for the cable industry trade show and convention that ended in Chicago yesterday. Cable executives may not know how life will look in 10 years. But they are absolutely sure that they want their coaxial cables -- not telephone lines, not wireless transmissions -- shuttling the data to your home. The data could be video phone calls, CDs delivered over the Internet, customized programming delivered to your TV on your schedule or any number of other services. Whatever it is, the industry doesn't want to be known just as the folks who deliver HBO and raise your rates every year. "Tomorrow, our legacy will be measured by our ability to educate and inform children using broadband technology," said Marc B. Nathanson, currently chairman and chief executive of Falcon Cable Television, but soon to be another Allen employee once the sale of his Los Angeles system closes. Cable executives would even like to change the name of their industry to better reflect the vision of where it is going -- if only they could come up with a name that made sense to the public. That new vision is pushing up the value of their companies -- whatever you call them -- to unbelievable levels. James Robbins, president and CEO of Cox Communications, recalled having to defend to Wall Street and his own board the $3,000 per subscriber he spent last year to purchase a system in Las Vegas. Just a few months later, AT&T Corp. launched a $58 billion bid for MediaOne Group, which Merrill Lynch first vice president Jessica Reif Cohen valued at $6,000 per subscriber. She remains very bullish about the industry. One reason: She predicts that by 2008, cable companies will have captured about one-third of the residential telephone market using their cables to provide phone service. AT&T Corp. intends to begin offering video, telephone service and high-speed Internet access in the Pittsburgh area later this year over the TCI of Pennsylvania system it acquired as part of its $54 billion purchase of Tele-Communications Inc.