The issues laid on the CEOs table yesterday morning were less about technological advances and more about the economy, customer satisfaction, competition and cooperation.

While the U.S. housing market has been replaced somewhat in the news by the rising gas prices, it remains on the minds of the top cable execs. A decrease in housing starts and an increase in the vacancy rate mean fewer potential subscribers. A downturn in existing home sales means fewer disconnects, but fewer connections as well.

Steve Burke, COO, Comcast Cable Communications, predicted that the current economic conditions will last through 2009, yet remained optimistic as far as the cable industry is concerned. “We are more recession resistant. I would rather be in this industry than in others,” he said.

Neil Smit, president and CEO of Charter Communications, seconded this opinion and said that in Michigan, a state greatly impacted by increasing gas prices because of its reliance on the auto industry, telephone penetration has reached double digits relatively quickly. “Consumers are receptive to a value proposition,” Smit said, noting that the triple play provides even more flexibility in packaging.

Programmers, while not as bulletproof as 20 years ago, are still doing well, too, said Matt Blank, chairman and CEO of Showtime Networks. Yet, he did express some concern that if something had to give in a consumer’s $130 monthly bill for cable, telephone and high speed data, it might be premium channels. “They (will) ask, ‘What can we do without?’ We are vulnerable in that sense, but we are having a good year so far,” Blank said. Digital transition Another big topic on everyone’s mind, of course, is the digital transition. Numbers have been bandied about regarding how many Americans currently rely solely on antennas for broadcast TV, and reports have been rosy about how many have applied for and received converter coupons.

Burke had a different take. “A significant chunk of people have gone out and gotten the coupons … I believe a significant chunk will never take the time to go to the consumer electronic store … 20 to 40 percent (of the time) the antenna will not work. The percentage of people that will have a good outcome will be a minority of consumers,” he said, going on to call the transition a “major basic subscriber opportunity.”

Reliability, then, becomes and even bigger issue as cable companies attempt to sell to folks who may have made a conscious choice in the past not to subscribe. “Reliability is something we are laser focused on,” Burke said.

Five years ago, 98 percent reliability meant one analog channel might be fuzzy. Now a 2 to 3 percent error rate for VOD “gnaws at people,” Burke said. “The next frontier is making video reliability improve,” he added, noting that the famed five-nines are the goal.

– Monta Monaco Hernon

Read more news and analysis on Communications Technology‘s Web site at http://www.cable360.net/ct/news/.

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