Brian Roberts, CEO and President of Comcast, took the stage yesterday in the first keynote address to the assembly from a cable company chief in the entire 41-year history of the CES. Riding on the coattails of Monday's keynote by Panasonic President Toshihiro Sakamoto in which the Roberts made a cameo to announce new tru2way devices, Roberts' Tuesday speech highlighted Comcast’s plans for implementation of DOCSIS 3.0 and delivery of more HD content.

"The age of the closed, proprietary set-top box is behind us," said Roberts, who, like others, says open source development must be a priority for the electronics industry. The new tru2way technology will allow consumers to go to a retail store, purchase a new component such as a DVR or set-top, bring it home and plug it in, "and expect it to support all cable interactive services," Roberts said. He reminded the audience that the cable industry learned a great deal about how open-source stimulates innovation and consumer adoption with the development of the cable modem, based on the old DOCSIS standards.

We couldn’t be prouder of our leader, Pat Esser, who is named as the first Executive of the Year by Multichannel News in this week’s issue. The caption on the caricature of Pat says it best, “Recognized for outstanding leadership and corporate management, the Executive of the Year demonstrates that success in the marketplace is achieved by putting customer satisfaction front and center and that by focusing on customer service, a company also serves its employees, investors and the overall industry.”

Pat is prone to describing himself as one of the luckiest guys in cable, but we all know that the “luck” is the sum of opportunity and preparation. While Pat entered the industry as an average communications graduate from the University of Northern Iowa, he has consistently positioned himself to meet opportunity (like when he packed up all of his belongings into the back of his car to try and get a job with Cox in Virginia). His preparedness is second to none. As detailed in the story, Pat spent his first 60 days as president interviewing Cox employees to talk about what they expected of him and the company. Pat understands that listening is an essential ingredient in leading.

Perhaps the best thing about Pat is that, at work, he’s just another member of the team with a contagious excitement for the possibilities ahead.

Cable often gets a bad rap for customer service, but recently Arizona State University’s business school recognized Cox’s customer service achievements. Over a decade ago, as Cox transitioned from a cable company to a multi-service telecommunications provider, it became clear that the best way for us to compete was to make sure all aspects of our business focus on the customer first. Cox invested in training for customer service, and training remains a key priority for our company today. So while we all can get a laugh out of the hijinks in the 1996 movie The Cable Guy, we work hard everyday to make sure that plot line remains only a work of fiction for our customers. To read more about Arizona State’s write-up on Cox’s customer service, click here.

Cox’s 2nd quarter highlights included the lowest customer churn (2.5%) in company history. (Here’s some media coverage of the announcement and here’s the official Cox release.) It’s a testament to the power of a “bundle” of services, even in the face of increasing competition. Another highlight is that, by selling multiple services into single homes, the company’s subscriber gains in the past year have more than made up for the loss of customers due to the company sale of cable operations representing about a million subscribers to Cebridge Connections last year. Overall, more than 60% of Cox’s roughly 6 million customers subscribe to at least two of the three major services, and bundled customers increased 11.9% over 2006. Speaking of the bundle, Cox will celebrate a full decade of delivering the bundle of cable, phone and high-speed Internet next month. It was September 1997 when Cox launched telephone in Orange County, Calif., completing the bundle and becoming the first major provider to commercially deliver cable, phone and high-speed Internet over a single broadband network.

This Los Angeles Times editorial takes a swipe at the telcos for hiking fees on custom calling features:

AT&T and Verizon wasted little time taking advantage of the freedom that the California Public Utilities Commission granted them in August. Unleashed from regulations that limited how they priced many of their services, California's largest telcos quickly hiked the fees they charged for many of their custom calling services, such as caller ID and call waiting. The phone companies had argued for unlimited "pricing flexibility" by pointing to the many phone lines they were losing to rivals, such as cable TV operators. They also said allowing them to respond quickly to competitors' promotional offers would (in AT&T's words) ensure that "customers reap the full benefits of competition."

Cable companies rank highest in telephone customer satisfaction in all six U.S. regions, according to J.D. Power and Associates’ latest study. Cable completely beat out the traditional telcos for the first time. Cox Communications is again tops in three of six regions, while Bright House, Cablevision and WOW! each top a region. Verizon, AT&T and Qwest were shut out at the top of all regions.

The study measures telephone customers’ satisfaction with their local and long distance providers in six major areas: performance and reliability, customer service, billing , image, cost of service, and offerings and promotions. The findings underscore the critical importance of bundling for service providers.

This year at Cox Communications, we’re celebrating 10 years of delivering a bundle of cable, telephone and high-speed Internet services. As our 2006 accomplishments demonstrate, the benefits of bundling continue to make a huge positive impact. Some highlights: The number of new cable customers who also subscribe to Cox’s phone and/or Internet services is 60%, a record high. Customer churn (i.e., disconnects) is at an all-time low. In all, as of the end of 2006, Cox had 3.4 million “bundled” customers, representing an increase of about 15% over 2005. The bundle will soon grow larger with the addition of a fourth service, wireless. In related bundling news, Verizon said this week that, in an effort to compete with the cable bundle, it will integrate its wireless service, previously offered separate from landline and other services, into its bundle. Verizon also said its FiOS service added 89,000 TV customers in the quarter, although the company's profits declined 38% due to its aggressive fiber roll-out. Meanwhile, AT&T’s U-verse TV service added zero customers in the fourth quarter.

As the familiar holiday song goes, “It’s the most wonderful time of year.” If only that were true in the halls of cable TV companies; you see, this is the time of the year when we are assailed by the media over rising video prices. These reports rarely get into the real issues impacting the cost of TV, leaving readers with a sour taste in their mouths and the wrong impressions of cable providers.

Today, we see coverage in USA Today: “Trying to spur competition and beat back cable TV prices, Federal Communications Commission Chairman Kevin Martin has proposed rules to make it easier for phone companies and others to jump into the video business.” The story goes on to discuss a “cozy duopoly” between satellite and cable and refers to a forthcoming FCC study which purportedly shows a $7.40 difference in the average price of cable TV in markets where a third wireline competitor is present.

While we welcome competition from a fourth, fifth, or sixty-fifth competitor in our markets, there are a few problems with such a rudimentary analysis of potential benefits:

Over the past several years, cable companies have made the transition to multi-service providers of more than just cable—a journey that started for Cox Communications with the launch of high speed Internet in 1996 and digital telephone in 1997. Cox has led the industry in “bundling” services. Yesterday, Cox announced that 57% of its nearly 6 million residential customers subscribe to more than one service—a 16% increase in bundled customers over the past year. But reflecting the ongoing transition away from just cable, Cox also has made a concerted effort recently to ensure a “line into every home” and pursue business out of every home passed by its network, even if that home has no interest in cable. Yesterday Cox announced success with that strategy, reporting an industry-leading number of non-video customers (432,000 of them) who choose Cox for high speed Internet and/or telephone, but not cable. Cox President Pat Esser described the rationale of Cox's "line in every home" strategy this way: “Our world is changing, and we needed to change our marketing strategies too.” Even so, Cox also saw strong video growth in the third quarter, growing basic cable subscriptions by 1.6%. Click here for Multichannel News' coverage of Cox's announcement.

Yet another new research report underscores the growing popularity of bundling up on multiple communications services. According to consumer research firm Telephia, nearly 43% of online households subscribe to a bundle of at least two services (among Internet, phone and TV) from a single provider. The company’s research revealed that price was the leader in driving consumers to bundle, along with customer service and convenience. While we certainly love reading more and more about the business and consumer benefits of bundling, we can hardly resist the urge to respond (oh so maturely) “duh.” From the time Cox Communications launched high-speed Internet in 1996 and digital telephone shortly thereafter, we’ve experienced first-hand that customers love the convenience and value of getting multiple services from a single source. However, for a long while, it was pretty lonely in the bundling camp; only recently have most other major providers woken up to the benefits of bundling. Meanwhile, Cox remains the best bundler, and more than 50% of the company’s nearly 6 million customers subscribe to at least two of Cox’s major residential services (cable TV, phone and high-speed Internet services).

It was nice to see recognition of the great strides Cable has made in the business services market, in a Reuters article this week:

After winning over many consumers by packaging phone, Internet and TV services into attractive bundles, cable is planning to attack the estimated $100 billion corporate market....Telecommunications analysts said companies like Verizon and AT&T Inc. have become complacent in serving small and medium businesses because they have not faced the same competitive or regulatory pressures as in residential markets.

Investor’s Business Daily has a follow-up on last week’s leak of a CableLabs report to The Wall Street Journal and trade publication ScreenPlays. As we wrote last week, the report postulates that Cable will have to significantly upgrade its networks to match the speed and capacity of fiber-to-the-premises (FTTP) deployments from the likes of Verizon. We thought the WSJ article made a much bigger deal about the report than was warranted. As IBD reports, that sentiment is widespread:

A report leaked last week that said cable companies might need another round of billion-dollar network upgrades has angered cable firms and forced the authors to backpedal. But it hasn’'t hurt cable stocks, and analysts seem unworried.

The report by CableLabs, a research consortium run by cable TV companies, said cable firms — under a “very speculative scenario” — might be forced to sharply spend more to keep up with the rapid growth of broadband video.....

The report also reportedly said cable firms should have enough bandwidth to deliver fast Internet access, more high-definition TV and phone call services “past 2010.” Cable TV companies — which fund Denver-based CableLabs — were mad the study was leaked. After the reports surfaced, CableLabs issued a statement stating: “The report shows that no major investment is needed for cable to compete with FTTP networks.”

A Wall Street Journal article today postulates that Cable will have to invest billions in new network upgrades to weather competition from the telcos, including Verizon. The reporter based his conclusions on a confidential report from CableLabs, the cable TV industry’s research and development consortium. We believe the article makes a much bigger deal about this one report than is warranted.

To start with, this was just one single report. CableLabs routinely evaluates a wide range of emerging technology trends for its members, and cable companies like Cox Communications see numerous conclusions and recommendations from various researchers all the time. The future course of our network design and upgrades can only be charted with a substantial amount of competitive and technological trending information—info much broader than this one single report. Further, as the report in question makes clear, Cable’s hybrid fiber/coax (HFC) network can be “gracefully extended” as bandwidth demand grows. This is a critical point. The article posits that Verizon’s fiber to the premises (FTTP) path will be one of the key factors forcing cable to upgrade. But you have to note that Verizon is investing a reported $20 billion to lay fiber now because they do not have a network that can accommodate a video play, nor can they “evolve” to one. They simply have no choice but to make this investment now, given competition from Cable.

Cox Communications President Pat Esser’s headlining of the UBS conference call yesterday raised some eyebrows in the industry. The headline of a Multichannel News article, “Cox Holds Call; Not Going Public,” answered a question apparently on the minds of many investors when they saw Esser would be featured in securities firm’s periodic “Frontline” series of conference calls. Cox going public again? No, Esser emphasized. His reason for accepting analyst Aryeh Bourkoff’s invitation to participate in the conference call: “We haven’t done one of these in two years, but I thought so much was going on in the business and so many questions were being asked of us, this is a good way to get answers out into the market to do that.” Esser added, “We think that our success over the last decade, and particularly over the last couple of years, proves the power of our network and offerings, and validates the business strategy we’ve been following for more than a decade. So, even though we’re private, we think our recent results are a model for what Cable can achieve.”

In other coverage of Esser's address, the satellite industry’s SkyREPORT took note of Cox’s success in signing up former satellite TV customers in an article entitled “Cable Poaching Satellite Subs Like 1-2-3.” And CableFAX Daily opined that Cable’s publicly traded companies should be grateful to Esser:

An unexpected drop in wholesale prices undoubtedly helped drive cable operator stocks higher Tues—but MSOs might also want to send a thank-you note to Cox pres Pat Esser. Despite heading a private company, Esser held a conference call Tues with UBS analyst Aryeh Bourkoff to tout subscriber metrics and the power of the bundle.

The number of customers ditching satellite TV and choosing Cable has nearly doubled in the past two years, at least for Cox Communications. Company President Pat Esser will deliver that nugget in a teleconference today sponsored by UBS analyst Aryeh Bourkoff. This year, Esser will report, 11% of the company’s basic-cable connects are former satellite customers, up from 6% in 2004. The defecting satellite customers are big buyers of Cox’s full three-product bundle of cable, phone and high-speed Internet, with 40% of them choosing the triple play. Speaking of the bundle, Esser notes that delivering multiple products has greatly reduced Cox’s own customer defections. Cox’s bundled customers are 41% less likely to churn than single-product customers. Esser notes that Cox is America’s leading bundler, given that the company has delivered multiple services for a full decade, a distinction reinforced by the number of customers the company is taking away from both satellite and telephone companies.