Cable Operators find it Tough to Swallow HDTV

This year, for the first time, consumers will buy more high-definition, digital television (HDTV) sets than traditional ones. Morgan Stanley estimates that nearly 26% of households will enjoy HD's gee-whiz video and theater sound by year's end and that 67.6% will in 2010, thanks to prices falling from today's $1,000 and up. That's good news for the TV industry, right? Maybe not for cable operators. Their wires are so packed with TV channels and new services -- including video on demand (VOD), broadband Internet and phone -- that many are scrambling to find bandwidth for the coming wave of HD channels. “Cable operators need massive capacity for HDTV, and have to move quickly,” says Sanford C. Bernstein's Craig Moffett. “HDTV is hot.” Executives say they're on the case. But their favorite plans to fix their bandwidth problem will, at least in the short-term, create hassles for millions of subscribers -- especially those who hate the idea of hooking their TVs to a set-top box. For example, one solution could strip dozens of channels from customers with cable-ready TVs -- forcing them to pay an extra $10 or more a month for a digital box and service just to keep the channels they get now without them. The other leading remedy would hobble new HDTV sets designed with a slot to work with a slick, credit card-size CableCard instead of a box. In addition to being an inconvenience and expense, either change would represent yet another setback for the decade-old federal effort to force the industry to free consumers from cable boxes. But operators seem willing to take the heat. They fear that if they fail to heed warnings such as Moffett's, they'll lose many of their 65 million subscribers who are hot for HD to satellite and phone company rivals that already are able to offer lots of HDTV channels and plan many more.
http://www.usatoday.com/printedition/money/20060605/hdcable.art.htm