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U.S. cable strapped for credit - facing unfriendly legislation, competition and consumer ire.

U.S. Cable Strapped For Credit - Facing Unfriendly Legislation, Competition And Consumer Ire

The development of cable in the nineties will be affected by three primary issues: The availability of capital, the pursuit of regulation and potential competition, such as the entry of telephone companies into the field, Trygve Myhren told the Women in Cable National Management Conference.

Myhren is president of Myhren Media, of Greenwood Cable and of the general partners of Saguaro Cable Investors, L.P.

The availability of capital is a problem in that leveraged transactions are frowned upon by lenders, acquisition has come to a virtual standstill and the lack of capital affects both improvements in technology programming and in customer service, Myhren argued.

At the regulation end, Myhren felt that "both the House and Senate bills are unnecessarily destructive to the cable business and not nearly as consumer friendly as they pretend to be. There is no question the currently considered legislation would act as a drag on our industry."

Legislation curbing cable charges stalled in the Congress prior to its adjournment in late October, but is likely to be reintroduced next year. Myrhen made no mention of the sharp rise in cable subscription charges across the nation, which partly triggered the proposed measure.

In the competition area, which Myhren found "really critical for cable this decade," he focused particularly on plans by the telephone companies to enter the cable field. He voiced "legitimate concerns" about such a move, because they are so likely to abuse the privilege and there are no adequate safeguards against cross-subsidization." Yet, he added, "with cross-subsidization, they are likely to become the primary audio, data and video provider to all American homes and businesses."

Myhren then proposed that, if the TELCOs are ever allowed into cable, "cable should be allowed into voice ... There are a number of high level telephone industry people who are somewhat concerned that the telephone company could actually lose that race.

"Cable plant can be transitioned to carry voice, assuming appropriate advancements in switching technology ... can make the transition to video with that background on the major issues - capital, regulation and potential competition."

Myhren's formula for cable success during the nineties centers on the trade-offs cable companies are willing to make. "Cable companies have been willing to give up some of the easy-to-generate profits of the next few years in exchange for better-trained, more loyal, higher-performing people who will make their primary goal happy customers," he said.

PHOTO : Trygve Myhren, president of Myhren Media, prophesied on the four major issues likely to affect the cable business in the nineties during his keynote speech at Women In Cable's (WIC) National Cable Management Conference, "Mastering Trade Offs: Results by Design," held recently in Tampa, Florida. With him (l. to r.) is WIC president Kate Hampford, regional vice president for American Movie Classics, and conference co-chairs Dianne Blackwood, general manager of Cablevision of Alamance County, and Julia TeKippe, vice president of finance at ATC-Greenboro Division.
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Publication:Video Age International
Date:Feb 1, 1991
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