Cable companies to ramp up Web, HD, mobile service

After a dismal 2007 in which their shares took a big pounding, cable is seeing a rebound as Wall Street put more weight on their gains in high-speed Internet and digital voice rather than focusing mainly on their traditional video services.

Year-to-date, industry leader Comcast Corp.'s shares are up 21 percent after falling 57 percent in 2007. The stock rose 8.6 percent the day that the Philadelphia-based company posted a 23 percent increase in first-quarter operating profit despite losing 57,000 basic video subscribers; its new Internet, phone and digital video subscribers has made up the difference, and more.

Time Warner Cable Inc. shares are up 10 percent so far this year, recovering from a 33 percent freefall last year, while Cablevision Systems Corp.'s stock rose 2 percent after declining 14 percent in 2007.

For the most part, the slowing economy didn't seem to take much of a bite. Cable companies added more double- and triple-play customers -people who bought two or three bundled services at lower rates than they would have paid a la carte.

"In the face of an uncertain economy, we're growing," said Kyle McSlarrow, chief executive of the National Cable and Telecommunications Association, host of the 2008 Cable Show in New Orleans.

With features like unlimited domestic phone calls, cable companies have continued to take business away from rivals such as Verizon Communications Inc., which lost 3 million residential lines for traditional phone service in the first quarter, with total home lines down 11 percent from 2007. Verizon added 263,000 net new FiOS TV and 262,000 FiOS Internet subscribers.

Peter Stern, chief strategy officer of Time Warner Cable, said the business has changed.

"If you looked at us about 10 to 12 years ago, 100 percent of our revenues were derived from analog video. If you look at the business today, almost 50 percent of our revenues are now derived from businesses beyond that of analog video," he told The Associated Press.

This year, cable hopes to continue building this diversity. They're adding more high-definition content, ramping up Internet speeds and working on standardizing systems where customers can use the same cable box or devices such as digital video recorders regardless of operator.