On the Call: Time Warner Cable CEO Glenn Britt

Time Warner Cable Inc. CEO Glenn Britt said Thursday that Internet-delivery of video could eliminate the need for set-top boxes one day.

That prompted an interesting exchange on a conference call where he discussed the company's first-quarter earnings. The company benefited from a big jump in high-speed data customers, even though video subscribers fell.

Britt was asked about the impact on revenue if set-top boxes went the way of the telegraph. Although they do bring in revenue, they also account for a lot of customer service calls, Britt said. At the end of the day, doing away with them would help.

QUESTION: My recollection of this is you guys have, from the government, the ability to pass through the cost of the set-top box, and to the extent you move away from that ... does that mean that we end up with less revenue?

RESPONSE (Britt): I think there's great confusion about technology which is changing quickly. And there's a tendency, whenever anybody says IP (Internet protocol), for mass hysteria to reign. Everybody thinks it's the Internet. But IP is a set of standards. And it's being used in all sorts of different devices and all sorts of different ways. And the use of it doesn't mean it's for public Internet. And I think that's the importance here. This is the way TV is going to be distributed in the future. It's not going to be any different. We're not going to have analog after a while anymore. And some of the old forms of digital are going to migrate to IP. It's just a different way of encoding bits. It's not magic.

The cost of the set tops, it's an interesting thing. ... I think if we move to a world without set tops, you are right, we'll probably have lower revenue because we do charge for them. We also will have lower capital costs. And I may be slightly wrong in the statistic but I think 40 percent of our service calls relate to set tops. Think about not having all the service calls. So my guess is if we magically snapped our fingers and had no set tops, which will only happen over many years, we would have a somewhat smaller balance sheet, somewhat smaller revenue, probably a more profitable company, and much happier customers. So that's what this is all about.