Green Keynote: Cable Positioned as THE Broadband Provider in New Millennium

Dr. Richard R. Green, CableLabs’ President and CEO, presented the
CableLabs’ Winter Conference 2001 keynote address.

Following is the edited text of Green’s keynote.

"As the cable industry looks forward to the new millennium, I’m confident that we will continue its advance. It seems like I say this every year, but it’s still true. This industry has seen an incredible amount of change, even since last February.

"The cable industry has learned that we are a valued partner in the new telecommunication world, working with innovative entrepreneurs to bring new benefits to our cable customers.

"Our opportunities are obvious, and we’re seizing them every single day. Do we face the same difficulties with the capital markets as everyone else? Sure. There’s no doubt that some dotcom mud splashed onto cable during the last few months of distress in the financial markets.

"But, in my view, we’re different and better, because we’ve got the infrastructure. Our house isn’t built on sand. We have business models. We keep adding new customers with new revenues. These customers really like cable’s high-speed Internet, digital video, and phone services.

"At the end of 1999, the cable operators that serve 80 percent of North America had attracted about 5 million digital video customers based upon estimates because all year-end 2000 data were not in. At the time, that equated to just about 9 percent penetration. At the end of 2000, digital video subscriptions rose to an estimated 8.7 million customers, a 66 percent increase. Aggregate penetration rate at the end of 2000 was 15 percent.

"As you might expect, high-speed Internet services grew even more quickly in 2000. At the end of 1999—again using estimates from the major North American cable operators—we attracted about 1.3 million high-speed Internet customers. At the time, that represented an aggregate penetration rate of about two percent.

"By the end of 2000, that number almost tripled, to nearly 4 million customers who chose cable for high-speed Internet access—a 200 percent increase. The aggregate penetration rate for high-speed Internet services at the end of 2000 was approximately 6 percent.

"Let’s look at the weekly run rate figures of our cable modem services, compared to DSL (digital subscriber line services). How about 50,000/week for cable, against 20,000 a week for DSL? Again, not bad.

"Even without an industry-wide push to add phone services to the advanced service mix, the numbers are heartening. By the end of 1999, there were nearly 510,000 cable telephony customers. By the end of 2000, it was estimated that there were 1.4 million cable telephony customers, which is nearly triple the customers that existed during the prior year.

"The cable television industry had other victories in 2000. On the regulatory and legislative side, we worked in a largely pro-competitive environment. Competition is a reality of the new millennium and it’s here to stay.

"It didn’t hurt that we met our stated goals. In particular, I mean our work to meet the July 2000 deadline for POD (point-of-deployment, removable security) interfaces. We owe a special debt of gratitude to our suppliers for stepping up and working with us to meet the FCC requirements. Our commercial detractors said it couldn’t be done. Together—we did it.

"And now, we’ve followed along with the release of a OpenCable™ middleware specification. Even though the Commission didn’t ask for the middleware piece, we’re doing it. We’re doing it because it makes sense, not only for us, but also for consumers and content developers.

"This year is a year of keeping it together. Holding the pace, enduring the capital slump, and preparing. This is not a year for aggression. It’s not a year for wild forward movement. It’s a year for assertion.

"As steadily as we can, we need to advance our broadband infrastructure. As steadily as we can, we need to continue to sign up new high-speed Internet, digital video and phone customers. But we need to do everything intelligently, because the bottom line is more important than ever this year—as many of you are well aware. We need to keep stride, while we endure the effects of the capital markets. As soon as the financial situation corrects itself, we’ll be ready to yet again step into new territories.

"Which brings me to broadband. A lot of people hung the shingle, over the last couple of years, calling themselves "broadband." But in reality, they’re not. Some have reasonably good methods for delivery of one of the many services. However, in my lexicon, "broadband" isn’t just one service. Broadband isn’t just high-speed Internet access. "Broadband" isn’t just IP phone. "Broadband" isn’t just digital video.

"The way I’m defining, it Broadband is cable’s exclusive domain, because it is the simultaneous delivery of voice, video and data, to simultaneous devices—phone sets, TV sets, and PCs. Can DSL families surf the net on two different PCs, talk on three different phone lines, and watch TV on two different TVs, all fed by the same last mile? No. Can cable families? You bet.

"But there’s a point here that permeates all our active projects at CableLabs. It’s particularly true this year, as we all focus on keeping it together, during trying economic times. It’s this: While you’re out there pouring it on, keeping pace to add new advanced service customers, we’re here pouring it on for the things that you’ll need next to stay competitive in the market.