Here is an interesting HD related extract from Cablevision's investor conference call by the new COO talking abuot ability to broadcast HD content. About mid-way through they talk about deploying freed up bandwidth in the most economic way possible. In our case, TWC-NYC has more economicly beneficial ways to deploy bandwidth. I'd like to know more about what he means when he says "switched video technology will be feasible commercially"; Maybe John Mason can translate
RICHARD BILOTTI, MORGAN STANLEY: Good Morning. You have taken the lead in terms of HDTV both on satellite and on cable, and I'm intrigued to understand, it seems to be raging throughout the industry, on a 750 system, such as the systems you built in New York, in the beginning stages of the roll-out, how many H.D. channels can you actually physically accommodate on those systems today before you run out of bandwidth? And then looking at it one more level, if you wanted to go an even greater number of channels, Tom, you all have looked at a lot of different strategies, where do you come out on all digital versus an 860 upgrade, versus a node split as a way to add bandwidth?
TOM RUTLEDGE: Rich, the math is fairly simple. You can compress today about three to one, and so it's a typical 750 cable system could carry about 330, all high-definition channels if we wanted to make it all digital, all HD. It's 450, 750 channels on a 750, right? 115.
WILLIAM BELL: So 300, you're right.
TOM RUTLEDGE: Well, whatever, it's large capacity.
RICHARD BILOTTI: But given that you have existing customers and obviously assume to be getting in a lot have you configured today what is practical in terms of the number that can be carried? How many six megahertz slots can you turnover to HD?
TOM RUTLEDGE: That's an evolving question. As our penetration of digital increases, which it's doing rapidly. We can take back spectrum by taking services that have historically been delivered in analog and converting them to digital. Pay TV and pay-per-view are the first services that are being converted that way, and we are rapidly doing that conversion.
As that spectrum gets freed up, that's available for high-definition. It's available for video on demand. So we can see how the marketplace dictates usage and allocate the spectrum the way that maximizes our utility to the customer. And is most economic. It looks like that by the ends of this year that switched video technology will be feasible commercially, which means that essentially we have an unlimited channel capacity for linear services, meaning traditional broadcast services.
Because we can use the plant that we've built, which is small node, already split node in essence relative to the rest of the industry, and use that capacity to deliver essentially unlimited products from around the world in a linear form on demand. And the initial products that we want to launch in that form would be low penetrated or low use services. But as the network continues to evolve we can do any kind of product in that form.
So 750 is sufficient plant for the foreseeable future. There's no need to go to 860 and do an upgrade. We can manage this plant going forward in a completely customer satisfactory way and have unlimited services without having to put additional capital into the infrastructure.
RICHARD BILOTTI: That's exactly the topic I was interested in. Thank you