"As a result of regulation, new impediments have been raised," said Gerald M. Levin, chairman-ceo and president of Time Warner, and the keynote speaker at Wert-heim Schroder & Co. and Variety's annual media conference.
Nonetheless, Mr. Levin said Time Warner is committed to early deployment of its Full Service Network because companies that first "put their brand on a new idea" are most apt to reap the rewards.
FCC Chairman Reed Hundt said the new rules were imposed to protect consumers, not cable operators, and that competition would have soon forced cable companies to become more competitive in their pricing anyway.
"When competition comes" from telephone companies' entry into the cable TV business, "rate regulation in competitive markets will disappear," Mr. Hundt said.
FCC Commissioner Andrew C. Barrett echoed Mr. Hundt's perspective during a luncheon speech at a crosstown Cabletelevision Advertising Bureau conference.
But Wertheim Managing Director David Londoner believes there are probably greater gains to be had by the cable industry entering the $95 billion phone business.
"We think the cable companies come from a better competitive position than the phone companies," he said, adding Hollywood studios and the Big 3 TV networks will also fare well due to increased demand for entertainment software.
Mr. Londoner also predicted gambling will be a new source of revenue for the interactive video industry. A "killer" application for interactive video is "likely to be sports betting, bingo and lotteries," he said.
At the CAB conference, Patricia Hoffman, VP-director of strategic resources for DDB Needham Worldwide, New York, said the interactive services are forcing agencies to rethink the way they communicate with consumers.
"We see ourselves returning to a rather fundamental area of one-on-one selling," she said.
Digital technology will soon make cable the spot medium "of choice" among advertisers, predicted David McGlade, VP-regional advertising sales for Tele-Communications Inc. The attraction lies in cable's ability to zone geographically and by household characteristics as detailed as "who requested a Taco Bell coupon," Mr. McGlade said.
He predicted that will create a "targeting dilemma" for mass marketers and a challenge for the cable industry to "aggregate very valuable small audiences" into "a very valuable large audience."
Mr. McGlade also blasted recent suggestions by the Television Bureau of Advertising that broadcast stations work with their local cable operators to zone broadcast buys in similar ways.
"I think that's dangerous ground for us," he said. "Why would we take our most valuable asset and turn it over to our competition?"