Comcast digital switch will cost $2 billion

Comcast Corp., the world's largest cable-television operator, will need to spend as much as $2 billion to televise all the channels carried on its systems with a digital signal, chief financial officer John Alchin said Wednesday.

That investment may be spread over four years, requiring the Philadelphia-based company to spend about $500 million a year, Alchin said at the National Cable & Telecommunications Association conference in New Orleans. Comcast won't switch over to digital signals for another two or three years, he said.

Providing TV channels in a digital format would free up capacity on the company's cable systems, letting it offer more networks, video- on-demand and high-definition TV, Alchin said. Comcast last year used new services including digital video recorders and faster Web-access to stem the loss of customers to satellite-TV and phone carriers.

"It just gives us additional channel capacity to dedicate to these new services, additional functionality in services like video-on- demand, and makes the whole network more robust than it is today," Alchin said in an interview.

Comcast last year spent $4.1 billion on rebuilding and upgrading its cable systems for the new services and faster Web access, and will spend about $3.35 billion in 2004. It will begin offering phone service using so-called Voice over Internet Protocol technology through its cable systems later this year.

Within six months, Comcast plans to convert analog channels that are being used for some pay-per-view services in Boston to the digital format as the first step in going "all digital," Alchin said. The move will allow the company to double the number of high- definition channels for TV viewers in that area to about 24, he said.

"That makes you way more competitive than satellite," Alchin said. "They would struggle in any individual market to deliver two dozen channels" in high-definition format, he said.

In three years, Comcast will start replacing its customers' remaining analog set-top boxes with digital ones, Alchin said. That would let the company use bandwidth that carries 70 existing analog TV-channels for about 700 new digital channels.

Each analog channel can also be replaced with three high- definition channels, he said.

Federal Communications Commission Chairman Michael Powell in April said FCC staff members are proposing a January 2009 deadline for TV broadcast networks such as Viacom Inc.'s CBS and Walt Disney Co.'s ABC to switch to the digital signals.

The government wants to allocate the freed-up airwaves to wireless and cell-phone businesses and public-safety needs. The U.S. Congress has required broadcasters to convert to digital TV once 85 percent of homes can be reached by digital signals.

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