The sky won't fall with cable's installers, CSRs and techs on the job

Cable World, Nov 4, 2002

Byline: MIKE LUFTMAN

Chicken Little has lots of company these days. That's true everywhere, of course, what with war clouds over Iraq, North Korea's nukes, a wobbly economy and a punch-drunk stock market. But the "sky is falling" mentality is a special problem for the cable industry, and it's no surprise. Bad news has been hammering the business like an anvil chorus: the Adelphia mess (including bankruptcy and perp-walked executives); rumors of bankruptcy (vigorously denied) at Charter; slower digital TV growth (including rollout glitches at Cablevision); concerns that many dial-up Internet customers may not automatically upgrade to a broadband connection from AOL or anyone else; weak advertising sales in a slow economy; continued subscriber erosion to DBS. The list goes on. As a result, investors welcome cable stocks in their portfolios with as much gusto as guests at a garden party welcome a skunk. It's no surprise the mood these days in cable is grim.

So it's time to step back and consider the positives, because the doom-and-gloomers have lost perspective and have ignored the big picture. First of all, while some of the black clouds listed above seem new, most are recycled versions of bugaboos from the past. Scandals, and even arrests, go back to the TelePrompTer days and the franchise wars of the '80s. Later in that decade Turner Broadcasting teetered for a while until a group of farsighted MSOs bought in. The rollout of addressable analog boxes was plagued by technical glitches and customer revolts. DBS has been a legitimate competitor for years. And remember the multiyear doldrums in which cable stocks wallowed after reregulation in the Dark Ages of 1993? Finally, did anyone really think the economic cycle had been repealed?

More important, cable continues to have the same array of strengths it has always had. While there's been much change and consolidation, the major players are still led by people with a long history in the business and with ties to its entrepreneurial roots. Fiber optic rebuilds are largely over, and companies are turning now to launching a broad range of interactive products. It's true that these products - digital TV, video-on-demand, broadband ISPs and telephony - won't sell themselves and require good marketing and customer service. But no competitor has the infrastructure to offer them all the way cable can. Most important, cable has a huge asset no competitor can match: its people. Not its CEOs and senior managers, terrific though they are, but the installers, CSRs and service techs: the people who really make the business run.

These folks are the true strength of cable. They're the ones who splice the fiber, hook up the boxes and modems and sell the services that are our future. They have proven time and again that they are the most capable field people in the communications business. Properly trained and motivated, there is no one better at introducing new services with the highest quality. They are our ace in the hole when battling DBS, which has no local presence at all once you leave Radio Shack. After all, when your DBS descrambler craps out, who ya' gonna call? Our personal experience is, by its very nature, anecdotal, and so it's a bit dangerous to extrapolate. But I've dealt over the past two years with CSRs, installers (and, yes, even contractors) for both AT&T Broadband and Cablevision, and I've been impressed every time. The better news is, I have yet to talk to anyone lately who has had a bad experience with cable. I don't hear gripes anymore about bad service, or even about prices. People value digital TV, and they absolutely love their cable modem service. Telephone companies and other competitors have underestimated cable's abilities for years, and our people are the ones who've proven them wrong.

This doesn't mean we've won the battle for the hearts and minds of consumers. We still have a long way to go. But it does mean that things in the industry are really not so bad after all. It may take a little longer than anticipated for digital TV, cable modems and VOD to roll out. But penetration ultimately will be massive, because the products are simply that good. And more are waiting in the pipeline - like IP telephony, home networking and other ideas still on the drawing board. So next time cable stocks go "bump" in the night, don't get distracted. In the long run, if cable operators keep their eye on the ball - which means satisfying customers by continuing to hire and retain good people and back them with the capital they need - the industry will prosper.

Mike Luftman is an adviser to Time Warner Cable. He was vice president of corporate communications for that company and held similar positions at American Television and Communications and Time Inc., the world's largest magazine company. He is also a consultant to companies in the cable and communications sectors. He currently resides in Rye, N.Y. and may be reached at mike.luftman@twcable.com.