• by David Kaplan , December 21, 2004

It just goes to show what a little $100 billion investment can do, as that money helped move new technologies such as video-on-demand (VOD), high-definition television (HDTV), and voice over Internet protocol (VoIP) telephone service to the fore of cable growth in 2004, according to Robert Sachs, president and CEO of the National Cable & Telecommunications Association (NCTA).

Sachs further credited a relatively "stable regulatory environment that has created a positive climate for cable companies to invest in new technology" over the past several years, as having set the stage for 2004 being the bellwether in terms of the introduction of advanced broadband services by cable operators and programmers.

"Cable's success always has been based on the ability of our companies to respond quickly to consumer needs," Sachs said in a briefing at the NCTA Washington D.C. office. "That's led to our $95 billion capital investment over the past eight years to provide digital broadband services to customers. The achievements of 2004--and particularly the new rollouts of HDTV, VOD, and VOIP--are the latest examples of cable's strengths in a very competitive telecommunications marketplace."

Sachs noted that the availability of cable broadband services has reached a new high in 2004, with 91 percent of homes now passed by an upgraded fiber-optic cable network that can provide a host of advanced services. About 25 million cable customers now subscribe to digital cable services, an increase of nearly 13 percent over a one-year period, he said, while high-speed Internet access via cable modems now counts 20 million customers, a growth of 24 percent in one year.

In addition, Sachs said, the number of customers for telephone service offered by cable companies, which had remained flat at about 2.5 million customers for the past several years, will reach 3 million by the end of 2004, based on the introduction of IP-based voice services.

While growth in new products and services has been significant, cable programming services also have experienced further and significant growth in viewership, extending their collective lead in viewers over the nation's broadcast networks, Sachs noted.

"For the 2003-2004 television season that concluded last spring, cable networks collectively outpaced the seven broadcast networks during prime time by 2.7 share points with a 49.9 share, a first for cable," he said.

As for his expectations for 2005, Sachs expressed a degree of concern about the "stable regulatory climate" becoming less static. In particular, he pointed to a U.S. Supreme Court decision in the "Brand X" case dealing with the regulatory classification of cable modem service, as well as possible action by the Federal Communications Commission and Congress on the digital TV transition. He also noted that the Congress is in the process of finalizing an anticipated review of the Telecommunications Act of 1996.