Comcast Guns For AOL’s Spot

UPDATED: With 7.4 million high-speed data subscribers, Comcast
is the largest broadband provider in the United States, but a key executive
with the cable giant said the number is nowhere near topped out.

“I’m very confident we’ll be able to continue to grow,” COO Stephen B. Burke
said at the company’s annual analyst meeting today. “We’re clearly going
beyond 10 million subscribers, and I wouldn’t be surprised if we hit 15

If trends hold, he added, Philadelphia-based Comcast will not only be the
top broadband provider in the country, but also the largest ISP.

America Online (AOL), a Time Warner subsidiary fighting a
subscriber slide, currently holds that distinction, with a total of
21.7 million dial-up and broadband members.

Displacing AOL would give Comcast better leverage when negotiating deals
with broadband content providers, Burke said. He did not estimate when
Comcast could overtake AOL.

An AOL spokeswoman declined comment on Burke’s comments.

Besides AOL, Comcast continues to battle SBC and Verizon
, which are also enjoying subscriber growth. Again, Burke
believes his company has an edge over the digital subscriber line

“SBC and Verizon have outsourced portals to Yahoo and
others,” Burke said. “We think that is a big mistake. The portal is the
foundation to build new services.”

Comcast’s broadband business is about five years old and generates $4
billion a year in revenue — more than the entire annual revenue of
Adelphia, which Comcast, along with Time Warner, is buying.

In addition to its portal strategy, there are other reasons Burke is
optimistic that the broadband business will roll on.

Currently, about a third of Comcast’s 21.5 million video customers also take
its high-speed data. That number could rise with new services, such as IP
telephony , and stepped up efforts to package voice, broadband
and video.

“Historically, other companies have talked more about bundling than we
have,” Burke said. “We thought of it as a code word for discounting.”

But when complementary services — such as IP telephony and high-speed cable
modem service — are bundled, Comcast can maintain its high margins and add
to its average revenue per user, Burke said.

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