From The Philter transcript file, here are the prepared remarks of Glenn Britt, President and CEO, Time Warner Cable, from his speech delivered here at TelecomNext on Monday afternoon:
Good afternoon. It’s amazing how fast the telecommunications business is changing. Four years ago, you wouldn’t have invited me here. Then, Time Warner Cable had essentially no telephone business. Now, I run a cable company that has over 1.1 million residential voice customers.No, no. Thank you.
So what’s going on? Forty years ago, cable companies were known as CATV -- Community Antenna Television. We sold better TV reception. We expanded that base by investing in and supporting new television networks in the 1970s and 80s. And our consumer proposition was all about more viewing choices.
In the 1990s, we found that our plant, which had been designed for TV, could also provide broadband services. More recently, we’ve been offering voice services.
Cable’s consumer proposition is now about more than simply choice. It is also about control and convenience.
In the old days, telephone companies were rate-of-return regulated monopolies. You primarily offered plain-old-telephone service, or POTS. Now, you’ve expanded into wireless, broadband, and television among other services.
So our worlds -- yours and mine -- have changed dramatically.
We now have a cluster of industries using new technology to expand beyond their traditional silos. At the same time, we have a long-term trend of government policies favoring market competition over traditional regulation as a way to govern business behavior.
Is all of this change good? You bet it is. It’s good for our customers and it’s good for investors.
Is all of this change scary?
Yes. It’s scary for some of us who grew up in these industries. And it’s scary for lots of industries that touch up against us.
But life’s only constant is change. The winners are those who turn change into opportunity.
People who feel threatened by change often run to the government in hope of erecting barriers to those changes. Some would like special favors to hobble their competition. There are those who essentially think that the old telecom regulations should be re-imposed on all of us.
They ignore the balance those old rules struck. Those rules provided for rate-of-return guarantees in a monopoly environment, where innovation was actively discouraged.
Today, that environment is clearly changing. And innovation has fueled the explosion in broadband connections, telephone options, and new alternatives for delivering video.
The automatic imposition of the old telecom rules, on new players and old, would throttle our companies. It would preclude all of us from innovating. But at the same time it would require all of us to make ongoing large capital investments with no guarantee of return.
Since the capital markets are open and fluid, that outcome would severely cripple our telecommunications infrastructure.
And, it would undercut our nation’s competitiveness. Instead, regulation should be used judiciously. And, it should only be used when it meets real social and competitive goals. Examples are interconnection rights and E911 service.
There are significant groups that would advocate a regulatory rather than a deregulatory outcome.
We see huge companies, far bigger than the entire cable industry, seeking special favors from Washington. I call this "industrial engineering." It amounts to the government picking winners and losers.
Make no mistake about it. The cable industry supports light regulation to ensure important social ends and real competition. We are for a level playing field. And, you can expect us to oppose any efforts to tilt the playing field by regulation.
I think our broader industry has a wonderful future, but it must remain free to innovate and generate great new products accompanied by good investment returns.
Our companies are operating in some of the highest growth, most dramatic segments in media and communications.
Consumers are spending six percent more time watching TV and 76 percent more time online than just five years ago. Consumers more than doubled their spending on Internet access to $20 billion over the past five years.
Many in the media and on Wall Street see phone companies, cable companies, satellite companies, and others as all racing toward the same finish line.
This afternoon, I’d like to share some of my own observations about this race:
First, there is no static finish line. We will continually develop new products and services. We won’t necessarily always offer exactly the same products and features as our competitors. We also won’t necessarily package them in the same way. But, we will constantly add to our service bundle. So, I’m sure, will all of you.
We see no future for the business if it is merely a commodity.
There are those steeped in academic network theory, who believe our industries should be limited to providing something called the physical layer. In the real world no consumer ever purchased the physical layer. Real consumers buy products and services that meet real needs. That’s the business we’re in.
Finally, like most races, it’s very important to be first. Some might argue that market leaders often stumble and those who follow can benefit from their mistakes. But I don’t think being a fast follower is enough in our business.
At Time Warner Cable, we’re moving as quickly as we can to successfully capitalize on our opportunities. We’re establishing as many customer relationships as we can at a pace that makes economic sense.
We match technological innovation to consumers’ interests and demands. We’re also aggressively strengthening our marketing strategies and making customer care central to everything we do. That’s our strategy.
In the last three years, we’ve accelerated the rate at which new products have been deployed. Time Warner Cable was the first to fully deploy VOD, the first MSO to fully deploy DVRs, and the first large MSO to fully roll out digital phone.
Our experience with digital phone demonstrates the speed at which we can move. We essentially rolled out our residential phone service in all of our operating divisions in just one-year.
We’ll be bringing more innovation to our customers this year than any single year in our company’s nearly 40-year history.
So, what are some of the features we are adding?
Caller ID on TV Synchronous voting and polling Quick clips Look Back Start-Over
Now, Start Over is one of my favorites. Let me tell you about it. Start Over allows viewers who missed the beginning of their favorite TV program to go back to the beginning at any point during the show’s initial airing. So, imagine you can come home at 9:15 at night and realize you wanted to see a show that started at 9:00 -- you can start it over.
We’re continuing to ramp up our new product pipeline. We want to ensure that we never give our customers a reason to leave. We’re focused on new features that tie our phone, video, and broadband platform together. Caller ID on TV is just one example of this.
And, as most of you know we, along with three other cable MSOs, recently entered into a joint venture with Sprint-Nextel. This venture is about much more than adding cell phone service to our bundles. It’s about developing new services that tie mobility to our product offerings. An example is the ability to program your DVR from your cell phone or even to view something that is recorded on your DVR on your mobile device.
I believe that we in this room are at the center of how customers are changing the ways they are entertained, informed, and connected and the way in which they communicate.
There are more opportunities out there today than there were yesterday. And there will be still more in the years ahead -- provided that government promotes an environment in which we can all innovate and thrive by focusing on the consumer.
In closing, I’m reminded of the view expressed by a professor at the Tuck School of Business at Dartmouth College. He says: “Strategy used to be about protecting existing competitive advantage. Today it is about finding the next advantage.”
I think that sums it up pretty nicely. Long-term advantage will be awarded to those that constantly probe the “new” and the not-yet possible. It will go to those that can see over the horizon and those who listen carefully to what their customers are telling them today.
Advantage will go to those companies that execute quickly and successfully. We know the competitive landscape will continue to change. No one is standing still.
— Phil Harvey, News Editor, Light Reading