The Toronto Star

May 28, 2004 Friday

It's all about the big fat pipe.

Cable baron Ted Rogers took the opportunity at Rogers Communications Inc.'s annual meeting yesterday to boast about his ability — and telephone rivals' inability — to pump a combination of high-definition movies, TV programs, digital music, on-demand video, and phone calls through a single "pipe" into the home.

The phone companies, by trying to compress more and more data on to thin, twisted copper telephone lines, will have an increasingly difficult time offering new services such as video on demand and high-definition TV, the 70-year-old chief executive told reporters after the meeting.

"You begin to see why the people in cable are optimistic," he said, suggesting that a combination of wireless and cable's "big fat pipe" are the growth engines of the future. "We've got high-definition (TV) all over the place, and that takes capacity. That's something (Bell Canada) doesn't have."

Mark Quigley, research director for the Yankee Group in Canada, said a standard phone line to the home is "limiting" for the phone companies, even with new digital subscriber line, or DSL, technologies that squeeze in more and more content through data compression.

"They have been pushing their network closer to the home with fiber, but in today's network, with few exceptions, that's not the case," he said.

Bell, the operating unit of Montreal-based BCE Inc., sells TV service, including high-definition channels, through its Bell ExpressVu satellite unit. To get deeper into residential households, it has plans to offer TV service through the same phone lines that provide high-speed Internet access. In a number of multi-unit dwellings — condos and apartment buildings — Bell already offers high-speed and TV services through so-called Very fast Digital Subscriber Line technology. It hopes to enhance and broaden the service with the help of Microsoft Corp. and its IPTV technology, which is designed to transmit TV programming through high-speed links into the home.

New network equipment being installed from Lucent Technologies Corp. is also expected to give Bell's high-speed product a boost.

But until Bell can prove its cable rival wrong, Ted Rogers will continue to trumpet the superior speed and capacity of his network.

Earlier this week, Rogers Cable increased the speed of its standard $44.95 high-speed Internet offering to 5 megabits per second for customers willing to spend $99.95 for a new cable modem. That's 1 Mbps higher than Bell Sympatico's fastest — and more expensive — offering.

Citing a customer survey, cable unit CEO Edward Rogers said 72 percent of cable users chose Rogers' service over Bell's because of faster speeds.

On the TV side, Rogers is tightening the screws on Bell. A subscription-based video-on-demand service is being introduced later this year, giving people the ability to download certain TV series and other programs as part of a monthly subscription.

Around the same time, customers using Rogers' personal video recorder service — which functions like a digital VCR — will be able to record, play back, fast forward and rewind shows that appear on high-definition channels.

Rogers reaffirmed its plans to use Internet protocol technology to offer a primary line telephone service over its cable network some time in mid-2005.

The company intends to spend $200 million over two years, and the service is likely to be sold through a new subsidiary called Rogers Telecom Inc., overseen by Rogers Cable chief operating officer Michael Adams.