AT&T's coming cable culture clash

A t our Washington news bureau, we receive a cable industry trade publication called Multichannel News. Think of it as a Network World for cable TV, and you've pretty much got the picture.

Leafing through Multichannel News presents a telling perspective on AT&T's recently announced purchase of cable operator Tele-Communications, Inc. (TCI) to obtain high-speed residential local access.

I wish I could report to you that Multichannel News reflects the cable industry's obsession with cable modems, high-speed Internet access, IP telephony and, generally speaking, beating up on the Bell operating companies. But I can't.

Oh sure, the publication's news columns include reports on the various issues of industry convergence and broadband transport that apparently motivated AT&T Chairman Mike Armstrong to buy TCI.

But an entirely different picture of the cable industry emerges in the advertising. That's where you find the industry's true obsession: getting the local cable operators to add new programming to their systems. In crass appeals to capture specific demographic groups, the programmers ask the cable operators to pony up bucks for endless new brands of old-fashioned, one-way, couch-potato television entertainment.

For example, the Food Network "makes your ad sales sizzle." Lifetime Movie Network provides "movies women love," while competitor Romance Classics says it's "what women want." Toon Disney, a competitor of the Cartoon Network, offers "the quality Disney animation that kids love and parents trust."

The Golf Channel brags that "golfers have money and they aren't afraid to use it." Shopping channel QVC not only demands airtime but also prime position on the cable box: "Put QVC below channel 35 and watch your [ad] commissions soar."

Every so often, you'll see an ad about a digital service, but it turns out to be a plug for the new digital TV capability, not two-way data services. A new MTV network, called MTV X, is a "Stairway to Digital Heaven" for cable operators. Why? Because "MTV X delivers a 24-hour dose of the hard rock your subscribers crave."

I know Mike Armstrong is trying to shake up AT&T, but is he ready to rock and roll?

The point is that AT&T is not just buying up TCI's cable access lines for telecom and Internet services, which is a big enough headache. AT&T is actually buying the company. The TCI acquisition plunges AT&T into an entertainment-minded culture as different from the long-distance business as you can imagine. And this comes less than three years after AT&T spun off Lucent and NCR to achieve greater focus!

None of this necessarily ruins AT&T's enterprise local-access strategy - which centers around its acquisition of competitive local carrier Teleport - unless it murders AT&T's stock and robs executive energy. Oh, wait a minute: That's already happened.

AT&T long ago proved it's not the kind of company that can handle a three-ring circus, which is why Wall Street dislikes the TCI deal. Let's hope Armstrong realizes what he's gotten his company into and makes sure the inevitable TCI problems don't hold back the momentum he's worked so hard to create.

Rohde is a senior editor with Network World. He can be reached at drohde@ nww.com.

Special report: There's no stopping IP
A look at IP convergence. Network World, 8/10/98.