00:03 - Anniversary

00:04 - of the City Cable Tech Expo,

00:07 - which is this year promising to become the show of all shows.

00:11 - Also, I'd like to welcome you to Philadelphia

00:14 - corporate headquarters for Comcast Corporation,

00:17 - which is promising

00:18 - to become the cable company of all cable companies.

00:21 - So this year, with several of our problems behind us

00:25 - and several opportunities ahead, 2003

00:28 - is shaping up to be an incredibly exciting year.

00:32 - So this year, as you celebrate the spirit of the Expo,

00:37 - this forum will provide you with a wonderful place

00:40 - to learn more about all the exciting new services

00:42 - and new technologies that are out there.

00:45 - We'll also provide you

00:45 - with a great opportunity to network

00:47 - with some of your colleagues from across the state,

00:49 - across the country, and even from across the world.

00:54 - This year we've got an incredibly large exhibit floor

00:57 - where you can go and put your hands on the technology,

01:00 - see it in action.

01:01 - There will also be several fantastic workshops

01:04 - covering everything from network security, voice services,

01:07 - video on demand and a whole host of other topics

01:10 - that I think you'll find useful.

01:12 - Preparing for this this year's program,

01:16 - we've had an absolutely excellent subcommittee

01:19 - and we've put their on the slides.

01:21 - We've got each one listed.

01:23 - And while there's too many members

01:24 - for me to read each of them off to you,

01:26 - I do want to give a special mention

01:28 - to three people that really do make things happen here.

01:32 - The first is Glenda Calcaterra.

01:34 - She looks after all the logistics

01:35 - and makes it incredibly easy for us to get this done.

01:38 - Mark Nelson, also with the City and Joel Welsh also from

01:43 - the city, really helped carry the day on this project.

01:47 - Well, as we reflect on 20 years of the city,

01:50 - I think it's gratifying

01:51 - to see just how relevant this industry has became

01:55 - relevant in the business community, relevant in broadband

01:58 - internet delivery and relevant in the everyday lives

02:01 - of most people.

02:03 - It's additionally gratifying

02:04 - to recognize just how important technology is to this industry

02:08 - and as such, how important each

02:09 - and every one of you in this audience is important.

02:13 - In fact, you're so important.

02:15 - The Brian Roberts has even juggled

02:17 - his unbelievable schedule to come and talk to you today.

02:21 - So I was before this thinking about how I was going

02:24 - to introduce Brian Roberts.

02:26 - And then I thought I would just start by asking

02:28 - anybody in the audience who doesn't know

02:29 - who Brian Roberts is to raise your hand

02:32 - and then afterwards you can leave

02:34 - because you're in the wrong meeting.

02:36 - I did the calculations, and by my calculations,

02:39 - I figure about 70% of the audience works for Brian.

02:42 - Probably another 25% are vendors wanting to sell stuff

02:45 - to Brian, and the rest of you probably know him as well.

02:49 - So without further delay,

02:51 - I'd like to turn it over to Brian Roberts,

02:53 - an all-American squash player, an all-American entrepreneur,

02:56 - and the president and CEO of Comcast Corporation.

02:59 - Thank you.

03:11 - Thanks, Tony.

03:12 - And good morning.

03:13 - This is fantastic to have you all in Philadelphia.

03:19 - Basically, Philadelphia, we feel, is

03:23 - an undiscovered secret, that it's fun

03:26 - for people to come back to because they came

03:28 - as little kids to see the Liberty Bell.

03:29 - They haven't been here in a while. For those of us

03:32 - that make it our home, we're very proud of it.

03:34 - And we had the privilege

03:37 - a couple summers ago of hosting the Republican

03:39 - National Convention in Philadelphia.

03:41 - And whatever your political party, it was the real

03:45 - coming out for Philadelphia under our revised

03:49 - revived leadership of Ed Rendell and now John Street

03:52 - as the mayor.

03:53 - And there's fantastic hotels, fantastic restaurants.

03:56 - So I hope while you're here, I understand

04:00 - everybody is going to be here

04:01 - for at least a couple of nights and some even longer

04:04 - that you'll get a chance to really explore the city.

04:05 - It is fabulous and we're glad you're here.

04:10 - I was thinking about what do I say

04:12 - to this distinguished crowd

04:16 - where you are, the experts and we are, you know, my case,

04:21 - someone who tries to figure out maybe what the trend is.

04:26 - But I'm not a technologist and I also, in studying

04:30 - the membership a little bit, realize how much this audience,

04:35 - what you do is so vital to the business.

04:38 - And it took me back to a story I'd like to.

04:41 - That's true.

04:43 - That happened to me with my first real job for Comcast,

04:48 - and my dad's in the audience somewhere here today,

04:50 - and he'll remember that this was totally true.

04:53 - I was given the assignment to become an installer.

04:56 - Now, I was 17 years old or 18 years old.

04:59 - I weighed £125 and trying to hold the ladder was impossible.

05:04 - The ladder is, you know, needed to extend all the way up.

05:08 - And so I was sort of the brunt of the jokes of all the guys

05:12 - who were the installers, but I did the best I could.

05:16 - One night, the telephone pole got smashed into by a car.

05:20 - Fortunately, nobody got killed and all the cable was out.

05:24 - All the power was out,

05:25 - all the telephone was out, and they called at four

05:29 - in the morning.

05:29 - Our chief maintenance tech guy named Rich LIPTAK

05:34 - and he and came out and he was in his bucket truck

05:37 - and it was not obviously the level to have a bucket truck and

05:42 - they were going to spring the line off the poles

05:45 - or off the damaged pole and put it on to a temporary pole

05:49 - or however they were doing it.

05:50 - And so they told everybody

05:51 - after they all got their lines prepared,

05:55 - back up your bucket and we're going to spring the line.

05:58 - And he backed his line is bucket right up into primary power

06:04 - lived

06:06 - obviously got electrocuted or

06:09 - and four flat tires in the truck

06:11 - completely blacked out.

06:14 - Taken to the emergency room.

06:16 - They had never had an accident like this in Westmoreland,

06:18 - Pennsylvania, in the history of the company.

06:22 - Everybody came to work the next day, heard this

06:24 - horrible story of what had happened to our coworker.

06:29 - I quit, called my dad and said, You won't believe how exciting

06:32 - it is being an installer as all these things happen.

06:34 - It's terrible and

06:37 - you know, went home

06:38 - to bed

06:39 - and that day I came to work I found

06:41 - I had just been reassigned to be a door to door salesman.

06:45 - I don't know how these things happen like that.

06:50 - So if I hadn't gone through a scary experience

06:52 - like that, I don't think I would ever quite

06:54 - have the appreciation and gratitude

06:56 - to the people that work for you and some of you

06:59 - who've started your careers in similar fashion.

07:02 - But every day

07:03 - people are putting their

07:04 - their lives literally on the line for all of us.

07:07 - And you can't begin a talk like this and not just recognize

07:10 - and say

07:11 - thank you to the leadership you provided,

07:13 - the leadership of the people

07:15 - who go out every day and do what they do.

07:19 - This is an amazing time for Comcast and for the industry.

07:24 - I think we have reclaimed

07:27 - if we ever lost it, the mantle of leadership in broadband

07:31 - and this industry is showing everyone how to how it's done.

07:36 - We now have competition, as I don't have to tell everybody

07:39 - in every aspect, video and data of our business,

07:42 - but we're rolling out new services.

07:43 - We're building ties with retail,

07:46 - strengthening our credibility with the consumer

07:49 - cable is deploying the new services

07:51 - at an incredible pace, services that strongly

07:54 - are differentiating ourselves from our competitors,

07:58 - like high speed Internet, high def and video on demand.

08:03 - We're bringing broadband to retail,

08:06 - putting the power of in-store demos to work for us.

08:10 - We had a great start doing this

08:12 - with cable modems putting

08:15 - demonstration and showing the speed and building

08:18 - a successful partnership with the retailers.

08:21 - Comcast had had a little experience doing this

08:22 - and cellular telephone right here in Philadelphia.

08:25 - And so I think we were quite anxious to do that

08:28 - with cable modems.

08:30 - Now, with high definition, we have a chance when people buy

08:33 - the new set to sample our service at the same time.

08:38 - And we've got a very success

08:39 - relationship going with Best Buy,

08:42 - which started again here in Philadelphia,

08:44 - where we had some old relationships.

08:45 - And we've now recently expanded it to Baltimore,

08:48 - Washington, Nashville and Knoxville.

08:50 - And we are at the tipping point, I believe, for high def,

08:54 - when probably by Christmas and certainly no longer

08:57 - not much beyond that,

08:59 - you're going to see a high def set for under $1,000.

09:03 - And that's why we put so much energy as an industry

09:06 - and as Comcast with Markowitz from our

09:10 - our company working on the consumer electronics

09:14 - manufacturer

09:15 - plug and play deal that's been recently negotiated.

09:18 - So when people

09:19 - buy a cable ready, set, it really is cable ready.

09:24 - This was a hard one compromise.

09:27 - We had a great team very proud of Mark

09:29 - and the fact that the Vanguard Awards at the CTA convention

09:33 - will recognize his role in putting that together.

09:37 - And it was a huge breakthrough.

09:39 - We hope very strongly that the FCC will approve this deal

09:44 - as fast as possible with no significant changes.

09:47 - So we can get about

09:48 - creating one way devices that work with cable.

09:53 - But the real work is to get a two way deal.

09:57 - So two way devices, which, as we all know,

09:59 - is so much of our future.

10:02 - So you can

10:03 - literally have it work with all the devices in the house.

10:07 - And this is good for cable, good for the c e manufacturers,

10:10 - good for retailers and great for the consumer.

10:14 - So I hope we can get that second agreement

10:17 - which is now under way beginning.

10:18 - The negotiation will take

10:20 - a fair amount of time because it's that much more complicated.

10:24 - It's pretty important that that get done.

10:27 - We're building credibility with consumers.

10:31 - Our customers are spending more time with us every day

10:34 - and we are becoming more central part of their lives.

10:38 - Our growth depends on keeping their confidence.

10:42 - I remember vividly the initial reaction

10:45 - to many investors and many in Silicon Valley

10:48 - that said, quote, A cable modem will never work.

10:53 - I've told the story before that I was at a Sun

10:55 - Valley conference

10:57 - where Andy Grove literally stood up and said,

10:59 - I really don't think cable

11:00 - modems can work because cable guys are not high tech.

11:04 - You can't do two way and they're TV people.

11:08 - Now, we've proved the skeptics wrong so far,

11:11 - dedicated the resources to do it right.

11:13 - We invested in the technology when people weren't certain

11:17 - we've trained and retrained our technicians.

11:20 - I get tremendous feedback.

11:22 - How great the installation was on a cable modem.

11:26 - I never got that feedback when we were first wiring

11:29 - for cable television because it was just so new.

11:32 - I think we were ready for this time around a lot better

11:35 - and that's why well over 60% in some cases, over 70%

11:39 - of all consumers

11:41 - are now taking cable modems for their broadband service.

11:45 - And I think CTE and what you all are doing

11:48 - and your leadership is playing a pretty critical role

11:51 - in helping

11:53 - make this all possible as a standard setting body

11:56 - and even more importantly, as a training body.

11:59 - Your new Operation Espanol program

12:03 - that's helping train

12:05 - installation and technicians

12:07 - for whom Spanish is a first language.

12:10 - It's pretty critical to Comcast, a new Comcast has over

12:13 - 3 million Hispanic households.

12:16 - So we appreciate and recognize the importance

12:19 - and we're working at the same time

12:20 - on the programing side, we just in fact, last week

12:23 - rolled out Hispanic oriented digital programing

12:26 - tiers in eight of our ten largest Hispanic markets.

12:30 - That's been a major priority

12:31 - since putting the two companies together.

12:32 - So I think we're working well there.

12:36 - The question I get asked

12:38 - quite a bit right now, well, how's the integration going?

12:40 - Because so goes that integration.

12:42 - So goes the

12:43 - the fortunes perhaps on Wall Street of our industry.

12:47 - And I'm pleased, very pleased,

12:48 - in fact, to give you a report card.

12:50 - We just reported earnings last week,

12:52 - and we are excited about how fast

12:57 - and how well the two companies are getting out of the blocks.

13:02 - Perhaps most significantly, we set an ambitious goal

13:05 - of rebuilding 46,000 miles in one year,

13:10 - which I have to think is a record.

13:13 - We are on track to beat that.

13:16 - So for those of you in the construction

13:19 - part of the business, thank you.

13:22 - We're focused on moving

13:24 - customer call centers closer to the customer.

13:28 - We're going to build eight new 10 to $20 million

13:31 - call center facilities and expand and renovate

13:35 - another seven early with a goal of taking

13:39 - what was once

13:40 - a 40 or 50% of all video calls being serviced out of market

13:45 - and putting 100% of all video calls

13:49 - back into market by the end of this year.

13:52 - We've been going around my dad, Steve Burke and myself

13:56 - to every major new system that's Comcast.

14:01 - And I just tell you one story.

14:04 - We literally shut the business down, come to a room

14:08 - this size we'd have in San Francisco, for instance,

14:11 - we were on the USS Hornet, which is the aircraft carrier

14:16 - that picked up the astronauts that first walked on the moon.

14:20 - It's now a museum in San Francisco, a floating museum.

14:24 - And they had never had 3500 people

14:27 - all at once get in the belly of the aircraft carrier.

14:30 - And we did that.

14:31 - They moved all the old airplanes out.

14:34 - It's quite an experience for all involved.

14:37 - And we came and we said to the employees

14:40 - and we had an open meeting

14:41 - and we had local management that was new.

14:43 - We had a new business plan and it was going okay.

14:48 - I think there's a little skepticism.

14:49 - It was a weird room and not sure you know, what to expect.

14:55 - And then my father got up and talked about how

14:58 - the integrity of what we're all doing and the faith

15:01 - that we have to have and your coworkers

15:04 - and trying to, you know, be with a company

15:07 - that is committed,

15:10 - I think struck a chord that I'll certainly always remember.

15:14 - It was a standing ovation

15:17 - when I speak, that doesn't really happen.

15:19 - So I have a little complex about that. But

15:23 - but there's something that resonates with people

15:25 - that they understand. You know what?

15:27 - This is my life.

15:28 - I could do a lot of other things and I think the same thing

15:31 - could be true for everybody in this room.

15:33 - Everybody here I,

15:34 - I'm certain, could get a job

15:35 - in another industry or another company.

15:38 - And if you're feel great about what you do

15:41 - and you feel great about the people you work for,

15:42 - that's that's 90% of the battle in San Francisco's case.

15:46 - It didn't help matters that

15:49 - 50 or 40% of all the homes can't get high speed Internet.

15:53 - So it was a nice message to be able to go there and say,

15:55 - we're going to do that this year.

15:57 - We're going to spend 500 million in capital in California

16:01 - this year.

16:02 - And we're going around the country

16:04 - and having those kind of sessions,

16:05 - putting that kind of commitment into the business.

16:09 - I hope we've set realistic goals for the transition.

16:13 - We're

16:13 - exceedingly confident, hopefully not overconfident,

16:16 - that will meet or beat them

16:18 - and that's what we told Wall Street last week.

16:20 - In fact, we upped our guidance

16:23 - for the number of basic cable customers.

16:25 - We're not accepting losses to satellite.

16:28 - Ever since satellite has begun.

16:30 - Comcast added that basic additions every single year.

16:34 - Last year, there was a big loss at AT&T.

16:38 - We set a goal of no losses

16:40 - and we just up that to 75 to 100000 subscriber gain.

16:44 - And we started the year

16:45 - with gaining 57,000 customers in the first quarter.

16:48 - Same thing is we set a goal.

16:51 - We update our guidance for cable modems.

16:53 - We will be over 5 million this year.

16:57 - Cable modem customers.

16:59 - In fact, we up to it from 5 million to 5.2 million.

17:02 - So I can honestly say I'm more excited

17:06 - right this minute

17:08 - about what the future holds for our industry than I was

17:12 - on the day we made the big step to make this deal.

17:16 - We have a terrific national broadband platform

17:20 - and we want to work with everyone who has a good idea

17:23 - to make the most of it.

17:25 - So how are we going to do that?

17:27 - Well, I've dubbed internally the Comcast

17:30 - and I think a little bit the industry, but Comcast

17:33 - certainly has to genetically rewire for innovation.

17:38 - We have been a fast follower

17:40 - and we now need to rewire our company

17:43 - to take some risk.

17:46 - And that's not easy.

17:48 - And that involves new people, new ways of thinking

17:51 - and a tolerance for occasionally getting it wrong.

17:54 - So let me talk a little bit with that caveat

17:58 - about what might be

17:59 - some of the driving forces that are going to keep cable

18:02 - at the leading edge of new services.

18:06 - Well, first is video on demand.

18:09 - We believe that this platform really has

18:14 - the ability to truly revolutionize

18:17 - television, to personalize it in an unprecedented way.

18:23 - Right here in Philadelphia,

18:24 - we have something we call Philly Vision,

18:26 - which is obviously a working name for just internal purposes,

18:31 - where we literally have

18:32 - thousands of hours of programing, at least half

18:36 - to two thirds of it free at no extra charge,

18:41 - experimenting with ways to empower people

18:43 - to watch what they want, when they want.

18:47 - We've developed a mix of programing that

18:49 - meets local and national,

18:52 - that is network, that is cable, that is not cable.

18:57 - You could watch the Detroit Auto Show.

19:00 - You can pick cars.

19:01 - There's mag rack

19:05 - and or

19:05 - and we have experimenting now

19:09 - with the personalization of television.

19:14 - So that if you're interested in the Philadelphia 70 Sixers

19:19 - or you're interested in a particular movie star

19:22 - or you're interested in content that you're interested

19:25 - in, that not everybody else may be interested at the same time,

19:28 - you can get what you want

19:29 - and someone else can get what they want.

19:31 - That sounds kind of familiar.

19:32 - Something else I've heard lately, like the internet

19:35 - and we've talked about convergence.

19:38 - We no longer allowed to use that word in public speaking.

19:42 - But the reality is that technology is coming together

19:46 - and that ability to get what you want is real

19:50 - and it's going to happen.

19:51 - So it's way more than movies on demand.

19:53 - I think we are not even in the first inning of video on demand,

19:57 - but we will have 20 million homes in this country this year

20:00 - that can access this technology.

20:02 - And I think we are

20:04 - sitting on something that our competitor cannot do.

20:09 - And there may be other ways to deliver this technology.

20:11 - And Time Warner is we some of us saw The New York Times

20:15 - working on a network based technology.

20:19 - Others have PVR based technologies, others have VOD.

20:23 - We're trying them all,

20:24 - but we are bullish on the personalization of television

20:29 - cable modems.

20:31 - Keto modems are a huge success, as we all know.

20:35 - But it's increasingly clear to me

20:38 - that it's a platform, not a single product.

20:42 - And by that, I'd like to tell you another

20:45 - past story real quickly.

20:48 - About ten years ago, a number of us went to Armonk,

20:51 - New York, to IBM's labs, I think it was Armonk.

20:55 - Anyway, we went to see IBM and they showed us

20:59 - a demonstration of 10 billion bits.

21:03 - Note 1 billion bits ten years ago, a billion bits, bi

21:07 - directional running over a cable system

21:09 - that they had developed in their labs

21:11 - a billion bits a second.

21:13 - I remember thinking, Who needs that?

21:16 - But boy, that's cool.

21:17 - What a concept.

21:19 - And it's clear

21:23 - that we should be pushing

21:25 - the technologists just talking to Dick Green of Cable Labs

21:29 - backstage about doing more of this, that today where

21:34 - we're running at one and a half to three megabits a second,

21:39 - we're using this with the same capacity.

21:42 - That's equal to about one television channel, as you

21:45 - all know.

21:46 - Well, we could go from 1000000 to 1000000000.

21:51 - We're somewhere in between.

21:53 - By devoting more capacity to cable modems,

21:55 - nobody else can do that with their technology.

21:59 - And so for us to maintain the leadership,

22:02 - I think we have to have a superior technology first

22:06 - and we'll get a satisfied customer second.

22:10 - So I think we should be pushing ourselves

22:12 - even if it means we have to devote more bandwidth

22:15 - because this product is a platform, there will be content.

22:20 - It's I talked about it, the earnings

22:22 - call, it's a chicken and egg situation.

22:25 - First, we built it.

22:27 - People didn't know why.

22:28 - Now people get it.

22:29 - Suddenly people want to give you a content.

22:32 - We can build it better and we are in that sweet spot

22:35 - where we can talk about one company having 5 million

22:38 - broadband subscriptions with this year.

22:41 - We sold more modems in the first quarter than we did

22:44 - in the fourth quarter and 50% more modems

22:47 - in the first quarter than we did first quarter last year.

22:50 - We are going up the hockey stick.

22:52 - We should not be satisfied with one and a half

22:56 - megabits of speed.

22:58 - And finally, just to give you a three things to be thinking

23:02 - about VOD, the modems, Internet

23:07 - protocol or IP technology

23:11 - could have even broader implications than I think

23:16 - I at least had ever originally thought about.

23:20 - So this January, just a couple of months ago,

23:23 - a number of us went

23:24 - to the Consumer Electronics Show in Las Vegas,

23:28 - and we basically never left our hotel.

23:32 - We had a big meeting room

23:34 - in very secure companies, came in and made presentations,

23:37 - and one of them was Microsoft and Bill Gates.

23:41 - And Bill just stood up and talked for an hour.

23:45 - But what touched me the most, and I won't do that, by the way,

23:49 - this morning

23:51 - touched me the most, was when he said,

23:55 - you know, sometimes putting your money

23:57 - where your mouth is is what it's all about.

23:58 - I have invested probably as much money

24:01 - as any individual person in America,

24:05 - save a couple in cable television

24:08 - and in the belief I have in broadband,

24:11 - I've invested in Comcast, Cox, Roadrunner, Rogers, AT&T,

24:17 - and I've

24:18 - never invested in DSL or DBS.

24:22 - And at that point, he told us, you know,

24:24 - at one point I thought of investing in DBS,

24:27 - but he announced to the group that he was not going to join

24:30 - Murdoch this time around in his desire to buy DirecTV.

24:35 - So that was a pretty good vote of confidence.

24:38 - And that's

24:39 - a current vote of confidence, not a past vote of confidence.

24:43 - In fact, he went on further to say

24:47 - that really opened my ear

24:49 - was I'm as excited about IP technology

24:53 - and what it can do in the next seven years to cable.

24:57 - As I was about high speed data

25:00 - seven years ago and I put $1,000,000,000 into Comcast

25:05 - now I came running back to

25:07 - Comcast and said, What's he talking about?

25:10 - Is he talking about voice over IP, talking about Xbox Live?

25:15 - So you're talking about all digital,

25:17 - whereas has been the case in the past.

25:19 - Is he talking about things that we don't even know about

25:22 - and that we can't even dream about, such as the Internet?

25:28 - And so

25:30 - I think that to me

25:32 - buoyed me that this broadband

25:35 - pipe we could continually invest

25:39 - in and invest with others who want to innovate it.

25:42 - We are sitting in a position

25:43 - unlike any other industry for the next decade,

25:48 - and I

25:48 - think about the kinds of things that have been talked about,

25:52 - whether it is a full featured IP phone service

25:54 - that truly gives people a reason to switch

25:57 - or a way to get voicemail and email all in one place

26:00 - to your PC or some wireless device

26:04 - or real online music that's legitimate

26:07 - that you can store and access from anywhere or video

26:11 - narrowcasting or home networking with a media center

26:16 - or monitoring of medical and home

26:19 - security, energy management, all the things that are

26:22 - being developed by various people all around the world.

26:26 - The list goes on and on and on.

26:29 - And I

26:30 - just can't imagine how lucky you are.

26:33 - We are to be in a business that you can dream like this

26:37 - while at the same time your core business is

26:39 - if you stay focused, is doing as well as it is.

26:43 - So that's why we a Comcast have decided

26:47 - to step on the pedal on capital spending.

26:50 - We'll spend $4 billion this year.

26:53 - We may have part of the purchase contract last year

26:56 - that AT&T keeps spending.

26:57 - The company spent $5 billion.

27:00 - So when the economic recovery comes, while others

27:03 - have pulled back on capital and slowed down,

27:07 - this industry will come out of whatever recession,

27:10 - further ahead of our competitors and further ready and able

27:15 - to take advantage

27:16 - of the new products that I think we're developing.

27:20 - Every one of you are the leaders that are making this possible.

27:25 - That future depends on the technology

27:30 - and the execution of installing that technology.

27:34 - And I think back to my experience as an installer

27:37 - where this industry

27:38 - is, we have the first,

27:41 - the best and most customer friendly choice for broadband.

27:46 - For that, I thank you and say I can't wait for the future.

27:49 - Have a great visit in Philadelphia.

27:51 - Thank you very much.