Time Warner Cable president and CEO Glenn Britt on Monday cited retransmission deals with broadcasters as a key factor of cost pressures for cable operators beyond sports content and said his company may suggest the new Congress review regulation on the issue.
Already-pressured broadcast TV groups are now also facing a weak economy, which has dragged down local advertising spending, he told a UBS investor conference here.
"They don't have anywhere to go, so they make pretty big demands," Britt said.
He added that TWC may take up the issue with lawmakers as the current retrans regulations may not make sense anymore.
Asked about net neutrality, Britt said he is increasingly confused about its meaning giving use of the phrase by many different groups for different Web-related issues.
"There will be some (Web) regulation," he predicted about the newly elected Washington power brokers. But he warned that regulation beyond ensuring First Amendment rights could mess up the economics of the Internet.
Britt on Monday also downplayed current cable consolidation opportunities and said the housing and economic problems affect TWC's growth rate, even though the business is holding up better than most others.
"People who may be sellers are all smart enough to know that this is not the time to sell," he said when asked if the separation of TWC from Time Warner next year will lead to acquisitions, pointing to depressed stock prices. "I don't think people will sell while things are cheap."
Industry observers have mentioned Cablevision Systems and at least parts of Charter Communications as possible targets for TWC after the separation.
Britt said Monday that he had no precise guidance on when it will go through given that the FCC hasn't put it on its agenda yet.
Overall, he argued that the cable business is performing "better than most businesses" in a recession, but he acknowledged that user gains has continued to run well behind 2007 levels since October.
"History would say that people watch more TV during bad times," he said. And broadband users seem reluctant to disconnect given the Internet has become a key part of their lives. "It may be even more important than TV," he said.
But Britt admitted that telephone subscription growth looks slower in the current environment, and fewer housing starts and foreclosures drag down growth. So does the advertising business, which for TWC was flat for the first three quarters of 2008. "It is big enough that it affects our growth rate as an overall company," he said.
And DVR user growth has been running about 40 percent behind the year-ago period. "People still watch TV and cable," Britt said. "But they are thinking: How can I cut around the edges?"
Trimming staff and labor costs amid slowing user growth is one cost lever TWC is looking at using, he said.