"Cable will continue to be a leader in providing consumers with choice - not only in video services, but also in high speed Internet services and telephony," Sachs testified. "Cable faces competition in every one of these businesses."
Sachs detailed the choices consumers now have in the multichannel video marketplace, pointing out that nearly 20 million consumers - more than 22 percent of subscription television customers - now receive their multichannel service from a company other than their local cable operator. Among cable’s competitors, direct broadcast satellite in particular has experienced a 43 percent annual expansion rate between February 2000 and February 2001, from 10.7 million to 15.3 million subscribers.
"Cable companies have responded to competition in the video market by aggressively upgrading facilities and launching new services," Sachs added. "Since passage of the ’96 Act, the cable industry has invested $42 billion to deploy broadband plant in order to offer a wide array of advanced services, including digital video, digital music, high speed Internet and cable telephony." The result has been a doubling of digital video customers since January 2000 to more than 10 million by March 2001.
Citing Federal Communications Commission data, Sachs said cable prices have remained relatively stable on a per-channel basis, despite escalating programming costs (especially higher sports rights fees). "Cable customers today are receiving more channels and better value for their dollar than ever before," Sachs said.
Sachs also pointed to the cable industry’s role in establishing a new and burgeoning market for affordable high speed Internet access. "Cable’s entry into high speed data services has benefited consumers by prompting a strong competitive response from incumbent telecommunications companies," Sachs explained. "As soon as cable offered broadband access to the Internet, local exchange carriers took DSL off the shelf and began selling it aggressively to millions of households across the nation."
The cable industry also is well positioned to bring facilities-based competition and greater consumer choice to the telephone marketplace, building on its own strong growth in the sector. Cable operators started 2000 with 200,000 residential telephone customers, and now serve more than one million homes. "Although still a new business, telephony is a key component of cable’s business strategy for the future," Sachs testified.
"As cable companies complete system upgrades across the country, consumers are realizing benefits in the form of digital cable, cable modems and cable telephone service," Sachs concluded. "In this highly competitive business environment, companies that succeed will be those who offer consumers the best quality, value and service."