TWC, Charter Talk Trends, Plans

Over the course of the next year, it may be possible for a customer to get a complete cable experience without having a set-top box in the home, said Rob Marcus, COO of Time Warner Cable (NYSE:TWC) at last week's Bank of America Merrill Lynch Media, Communications, and Entertainment Conference. The smart TV, Roku player and Xbox could go from being secondary outlets that allow viewing in rooms where it wasn't previously possible to a full replacement video service."We feel that to deliver a great customer experience, we have to make sure consumers can choose what device they want to use to enjoy our service," said Marcus, who is slated to take over as TWC's president and CEO in January.There currently are obstacles preventing these devices from making the transition from being an enhancement to the primary deliverer of cable service in the home, but they are being broken down, Marcus said.For starters, all local programming must be encoded so that it can be delivered via the appropriate TWC TV app. Time Warner Cable is about two-thirds of the way through this task and should be done by the end of the year. Likewise, closed captioning and emergency alert requirements should be "tackled" by year-end as well, Marcus said.Contractual sports programming blackouts are another hurdle, as are provisioning issues. Today, the billing system and one set-top box in the home work together to identify which services a subscriber should receive.Once these items are resolved, however, customers will have the ability to go set-top boxless if they so desire. This has the potential to reduce both capital and operating expenses for the company, but Marcus warned that the effect will be evolutionary and not a sea change, given the fact that there are millions of set-top boxes currently in customer homes."One of the principle drivers of our service requirements is taking care of set-top boxes. To the extent customers own and manage their own devices, it may take a burden off our (technical operations) function. (But) that will occur over time," Marcus said.At the same conference, Charter Communications (NASDAQ:CHTR) President and CEO Tom Rutledge noted that his company remains focused on going all-digital, but also will roll out an IP platform in the next month or so that will replicate the entire cable system in IP."That said, in the U.S. there are (millions) of TVs out there that require a set-top box to get the full range of cable services," Rutledge said. "MPEG is the format used to run those boxes .... (In time) IP will become more common. We may use IP in various applications ... but we will be running the existing infrastructure for years to come."Charter has been beefing up its product development group, which has tripled in size. Their efforts have centered on the digital transition, but the company is "not far from pursuing" things like home security and monitoring."I look at (these) as applications to a robust data network," Rutledge said. "If you take these functions and make them inexpensive and easy to provision, they can create value, which is ultimately what you want to do."Monta Monaco Hernon is a free-lance writer. She can be reached at [email protected].