|
|
|
|
 |
Media
Center > Press Releases
For Immediate Release July 17,
2001
Contact: David Beckwith and Marc O. Smith,
202/775-3629 |
|
Robert Sachs, President & CEO
National Cable
& Telecommunications Association
"Putting Broadband to
Work for Consumers"
Remarks to NARUC Telecommunications
Committee
Seattle, Washington
July 17,
2001
Good morning.
Thank you
Chairman Hueslmann for that kind introduction. I am honored to
have the opportunity to speak here today.
The cable
industry is at an exciting place in its growth and
development. For cable’s first 25 years we were essentially in
the business of extending the reach of local TV stations to
unserved areas of the country. With the advent of satellite
technology in the 1970’s, we transformed our business to
become the world’s leading provider of original and innovative
multichannel video programming. Now, as we enter the 21st
century, we’re transforming our business again, by providing
consumers advanced two-way services, including digital video,
high-speed Internet, cable telephony and interactive TV. And
we’re doing so by upgrading our plant and equipment with fiber
optic and digital technologies.
In this regard, there
are several things I'd like to talk to you about:
our view of the 1996 Telecommunications Act, and its
impact on our deployment of advanced services;
cable broadband deployment and the status of multiple-ISP
technical trials; and lastly,
our cable telephony rollouts.
Let me begin with the
1996 Act:
Some have argued that the ’96 Act has not
produced the results promised – especially when it comes to
local residential phone competition. And I would not disagree.
But when it comes to the deployment of broadband services and
multi-channel video competition, it’s an entirely different
story. Indeed, the Act has produced very significant consumer
benefits in these areas.
Nowhere is this more obvious
than in cable’s deployment of broadband technology. In
addition to 80 channels of analog video, cable companies today
are providing consumers with dozens of new digital video
networks; movies on demand; high speed Internet; and cable
telephony.
By so doing, we’ve made the word "broadband"
part of consumers’ vocabulary. And we’re taking the lead in
making it part of their lives.
Over the past five
years, and as a direct result of the ’96 Act, our industry has
invested nearly $50 billion to upgrade more than
three-quarters of a million miles of plant with fiber optics,
making our networks highly reliable and fully two-way. This
has been a massive construction project. And we’re not
finished yet. But as we complete upgrades, as we’ve now done
for 75% of cable plant, we’re putting broadband and digital
technology to work for consumers.
More than 12 million
consumers have now signed up for digital cable services. For
those of you who may not be that familiar with our business,
by digital cable services, I mean dozens of new video
channels, virtual libraries of movies on demand, and
interactive program guides that make it possible for consumers
to choose from among hundreds of viewing options. The consumer
response to these new service offerings has been
overwhelmingly positive. Cable companies are installing more
than 135,000 new digital customers every week and by the end
of this year more than 25% of basic cable subscribers will be
digital cable customers. And digital cable is totally
optional.
While promoting multi-channel video
competition is not the responsibility of most state public
utility commissions, nonetheless you might be interested to
know that most consumers today have a choice of at least three
multi-channel video providers, and that DBS subcribership has
grown from near zero in 1996 to over 15 million today.
Moreover, one out of five subscription TV customers today
receive their service from a provider other than their local
cable operator.
But the consumer benefits of the ’96
Telecommunications Act do not stop here.
Our industry
has now made cable modem service available to some 60 million
U.S. households. That’s right. Sixty million. And remember,
this is a service that did not exist at the time of the ’96
Act and which skeptics said the cable industry was incapable
of delivering. Five million plus cable modem customers have
proven them wrong, and 70,000 new cable modem customers are
signing up every week.
Not surprisingly, the success of
cable modems lit a fire under the regional Bell companies. As
you know, the Bells had DSL technology available for more than
a decade. But they preferred to sell more expensive T-1 and
ISDN lines. Only when cable launched affordable high speed
Internet service, did the Bells begin to deploy DSL. The
result of cable’s investment? Vigorous competition and rapid
growth in this critical sector of our
economy.
According to the most recent Morgan Stanley
Dean Witter consumer broadband forecast, 81 million or 77% of
U.S. households will have broadband cable modem service
available by the end of this year. Fifty-one million or 49% of
U.S. households will have DSL available. And by year-end 2004,
Morgan Stanley projects that homes passed by cable modem
service and DSL will increase respectively to 92% and 80% of
U.S. households.
These projections suggest marketplace
competition is narrowing the digital divide. In any case, I
can assure you that the cable industry does not intend to
leave rural America or economically distressed urban
neighborhoods behind.
We’re deploying broadband in
small towns like Chillicothe, Illinois; Hays, Kansas; Gauley
Bridge, West Virginia; and Warner, South Dakota.
Often
under-served big-city neighborhoods are also getting high
speed Internet connections. AT&T Broadband is serving such
neighborhoods in Chicago, AOL Time Warner is doing the same in
New York, as are Adelphia in Los Angeles, Cox in New Orleans
and Comcast in Philadelphia.
In these and many other
urban centers, cable is not only deploying broadband; we are
reaching out to communities to help them exploit this powerful
tool. Across America, cable companies are providing free
high-speed Internet to schools and libraries. And
Cable-in-the-Classroom is taking the lead in providing
computer and Internet training for teachers.
As I’ve
mentioned, more than five million consumers today enjoy cable
modem service. But, as many of you know, for the last couple
of years some of the RBOCs and large ISPs, have sought to have
the government require that cable share its facilities with
all ISPs. This regulatory effort has been variously known as
"open access" or "forced access", or the term I prefer
"government- mandated access."
While only a handful of
the more than 30,000 local cable franchising authorities have
passed ordinances to mandate access to cable's facilities, the
federal courts have rejected such efforts - invalidating
mandated access ordinances in Portland, Oregon; Broward
County, Florida and, just last week, in Henrico County,
Virginia.
States too have been skeptical - at least
twenty-three of them considered legislation in 1999 and 2000 –
but not one passed such legislation – in fact, not one bill
even made it out of committee in a single state. And NARUC,
I'm pleased to say, has wisely chosen not to endorse mandated
access to cable facilities.
I say "wisely", because the
market is addressing this issue. About a year and a half ago
cable companies began to announce that they would voluntarily
carry multiple ISPs, and would conduct technical trials to
figure out how best to do just that. And this happened because
offering consumers a choice of ISPs appears to be in
everyone’s best interest.
The challenge facing cable
companies is to accommodate multiple ISPs while managing
bandwidth to prevent the network from being overwhelmed by the
varying needs of different providers. Operators are also
grappling with questions of billing and customer care. For
example, if a malfunction in service occurs, cable operators
want to insure that their customers are not sent back and
forth between the cable operator and Internet service provider
while seeking resolution of the problem.
So our
companies are developing software, resolving technical
problems and undertaking technical trials to make certain the
transition to multiple ISPs is a smooth one.
- AT&T Broadband began a technical trial of multiple
ISPs in Boulder, Colorado last November, investing $20
million in developing new technology to facilitate the test,
before the trial even began. The trial has involved four
ISP’s and several hundred consumers. The Boulder technical
trial is to be followed by a 10,000 home market trial in
Massachusetts later this year.
- Last July, Time Warner embarked on a technical trial
with Juno Online in Columbus, Ohio. AOL/Time Warner has
since signed carriage agreements with Earthlink, Juno, and
High Speed Access Corp.
- Comcast Cable Communications, the third largest cable
operator, is currently conducting a trial with Juno in the
Philadelphia area, and is planning an expanded trial, with
Earthlink, to begin later this year.
- And Cox Communications, the fifth largest cable
operator, has announced plans for a six-month technical
trial in El Dorado, Arkansas with Earthlink and AOL.
- Comcast and Cox have also terminated their exclusive
carriage arrangements with Excite@Home, effective December
31 of this year.
What is important is this: consumer
choice of multiple ISPs over cable is being resolved by the
market through voluntary, arms length business agreements
under the watchful eye of regulators and public policy makers.
There’s more I could say about broadband deployment
but since I'm here speaking to state public utility
commissioners, I also want to spend a few minutes discussing
cable telephony, a subject that may be of even greater
interest to you.
Yet another consumer benefit of the
1996 Act is that cable operators are beginning to offer
competitive residential phone service at prices substantially
lower than those charged by incumbent phone
companies.
In communities where cable operators are
offering telephony over cable, consumers are truly enjoying
the benefits of competition. They are receiving 10 to 15%
savings on primary lines and up to 50% discounts on multiple
lines and advanced features such as call waiting, and call
forwarding.
While cable telephony is still a
relatively new business, cable companies are now serving some
1.3 million residential phone customers utilizing traditional
circuit switched technology, and are adding thousands of new
cable telephony customers every week.
To give you more
in-depth information about cable telephony, we’re today
releasing a white paper on the subject. We will distribute it
here but you can also find it on our website at www.NCTA.com.
As you will see from this report, many of the
companies in our industry see Voice over IP, or Internet
Protocol Telephony, as the logical next step in local
telephone competition. And many are currently field-testing
VoIP.
- AOL/Time Warner has a commercial trial underway of a
service dubbed "Line Runner," which is being offered to
1,000 RoadRunner customers in Portland, Maine, and another
1,000 customers in Rochester, New York. The company is
offering Line Runner as a second line, essentially bundling
VoIP and high-speed data services. For immediate purposes,
AOL/Time Warner has chosen to test VoIP as a second-line
service because of the added expense required to power the
network in order to provide a primary line.
- Charter Communications, the 4th largest cable operator,
is conducting a 500-customer "carrier-grade," end-to-end
VoIP cable-telephony field trial in St. Louis and another
trial in central Wisconsin. The tests are expected to run
through this summer, at which point Charter plans to compare
the results from both trials.
Interest in cable
telephony is by no means limited to larger cable operators.
For instance, Armstrong Cable, a 200,000 subscriber MSO, has
been conducting VoIP trials throughout its systems in Ohio,
Pennsylvania, West Virginia and Maryland.
As the first
five years of the Act have seen multi-channel video and
Internet competition flourish, I am optimistic that the next
five will see the promise of local phone competition finally
realized. This competition is most likely to come in the form
of facilities-based competition over our broadband cable
networks, rather than through the resale of incumbents’
services or the purchase of unbundled network elements, as
many had originally envisioned.
From the cable
industry’s record of performance, I think you’ll agree that
cable is one industry where the 1996 Telecommunications Act
has already produced substantial consumer benefits. To do this
we have invested billions in broadband technology, new
programming and customer care, just as Congress intended. Most
importantly, we are bringing competitive choices to tens of
millions of American consumers.
Thank you. I’d be
happy to take some
questions.
|
[archives] |
| | |
