SCTE: Comcast Eyes Sub Growth from Analog Turnoff

No. 1 cable operator predicts reception problems with DTV converter boxes.

Philadelphia -- Comcast, the country’s largest cable operator, views the Feb. 17, 2009, turnoff of high-powered analog signals as a big opportunity to grab more basic-video subscribers, chief operating officer Steve Burke told the crowd at the Society of Cable Telecommunications Engineers’ Cable-Tec Expo 2008 here Wednesday morning.

Burke conceded that a “significant chunk” of consumers have taken advantage of the federal government’s program to provide $40 coupons that subsidize the cost of digital-to-analog converters that will let analog-TV sets that rely on over-the-air signals keep functioning in an all-digital world. But he’s not sure that all of those people will necessarily redeem the coupons that they received from the National Telecommunications and Information Administration.

“We believe a significant chunk of people who got coupons never took the time to go to the consumer-electronics store [and pick up a converter box],” said Burke, who was speaking on a panel that included Charter Communications CEO Neil Smit, Showtime CEO Matt Blank and Nortel CEO Mike Zafirovski and was moderated by CableFAX Daily columnist Paul Maxwell.

Moreover, Burke expects that many consumers who do pick up converter boxes and hook them up to antennas will still have problems receiving digital signals.

“Once they install the antenna, we think there’s a 20%-40% chance the antenna is not going to work, because of the grade-B contour or other issues,” he added.

Between consumer inaction and technical problems, only a “small minority of people will have a real good outcome” from the converter-box program, Burke predicted, adding that cable will be the “best opportunity” for impacted over-the-air viewers to maintain TV service -- as well as to possibly sign up for Comcast’s high-speed-data and voice-over-Internet-protocol phone services.

Burke conceded that the 10%-15% of households in Comcast markets that rely on over-the-air TV have made a conscious decision not to get cable, and Comcast will “have to work through that” by stepping up its marketing efforts.

He then recalled a recent conversation with a broadcaster who joked that he was going to call in sick Feb. 18, 2009, to avoid a potential nightmare, and predicted that receptionists at local stations will be overwhelmed with consumer complaints after the analog turnoff.

“A station like WNBC [New York] or WPVI Philadelphia, the odds are they have one person answering the phones, and they might field 200 calls a day,” Burke added. “On the day of the transition, that receptionist could literally get 50,000 phone calls. My belief is there will be a huge consumer backlash, and the challenge is going to be trying to manage that. It will place a stress on the cable companies to keep up with installing [new homes].”

Smit agreed that handling consumer requests for new installations due to the DTV transition’s impact will keep operators busy, but he thinks cable is up to the challenge.

“This is a great opportunity for the industry to show what we can do,” Smit added.