Cablers swim up stream in broadband transition

Operators immediately attack plans

CHICAGO — ESPN Sunday unveiled plans to take a swan dive off a new platform, launching an Internet streaming service.

ESPN’s announcement, unveiled on the eve of the National Cable Television Assn.’s annual confab, was in keeping with the show’s official theme — “We’re Making Broadband.” But the immediate fire the plan drew from operators served as a clear indicator that the cable world’s increasing focus on ancillary services is sure to cause some growing pains.

Comcast Communications prexy Steve Burke, for example, said ESPN’s plan presents a grim scenario for operators. Burke called it “mind-blowing” for his company to pay top dollar for branded sports programming, only to have ESPN give it away on the Internet.

ESPN prexy George Bodenheimer said during a pre-confab panel that there is no reason for cable operators to feel gypped by the new service, which will launch by this fall; quite the opposite, since ESPN will make the streaming available only to affils. ESPN Broadband (working title) will allow customers on-demand streaming video highlights and sports headlines. Moreover, such streaming will tout cable modems — a service provided by cable operators.

“The reality is there are so many platforms, and we are going to be marketing programming across them. It is not a problem but an opportunity,” Bodenheimer said.

But Burke and Cox Communications exec veep Patrick Esser said if ESPN programming is available in any way on the Internet, they are undercut.

“It could be great for us, but our concerns is this: If we are paying millions for programming, then streaming shouldn’t circumvent our pipes,” Burke said.

Signs of the future are everywhere. The industry’s main trade org and host of the convention recently changed its name to the National Cable & Telecommunications Assn., with “telecommunications” replacing the “television.”

Don’t be fooled — it’s in ancillary and advanced revenue streams where fortunes are to be made, said NCTA prexy-CEO Robert Sachs.

Think telephone service, digital set-top boxes and high-speed Internet access. Think interactive and video-on-demand.

Panels are scheduled throughout the week to address the various policy and regulatory issues involved in expanding cable services. On the convention floor, tech companies and programmers will entice cable operators with the latest fare.

Pols slated to make an appearance in the Windy City include new Senate majority leader Sen. Tom Daschle (D-S.D.) and House of Representatives Speaker J. Dennis Hastert (R-Ill.). Federal Communication Commission topper Michael Powell will deliver a keynote speech Tuesday.

AOL Time Warner topper Gerald Levin closes out the confab on Wednesday during a one-on-one interview with CNN’s Larry King. AOL TW is CNN’s parent.

The long list of confab speakers also includes new FCC commissioner Kathleen Abernathy; AT&T prexy-CEO C. Michael Armstrong; Fox SportsNet prexy Tracy Dolgin; Viacom prexy-chief operating officer Mel Karmazin; and National Geographic Channel prexy Laureen Ong.

On Sunday, Viacom topper Sumner Redstone delivered a keynote speech at a companion international summit hosted by MultiChannel News. He said the conglom is more than ready to take advantage of new platforms.

NCTA has been fairly upfront about the fact that attendance will be down from last year’s figure of about 30,000. (Likewise, attendance was down when the National Assn. of Broadcasters met for its annual convention in late April.)

Both trade orgs attribute the slump to the weakening economy.

According to the NCTA, the number of exhibs will dip by 15%. The majority of no-shows are tech companies, including Nortel Networks and Cisco Systems.

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