Tci Reassessing ‘Experiments,’ Returning To Basics Cable TV Giant’s Ceo Says Expansion Plans Were Too Ambitious

John Malone, who heads the nation’s biggest cable television company, says TeleCommunications Inc. has found its telephone and Internet plans were too ambitious.

In an interview published in Thursday’s issue of The Wall Street Journal, Malone said it was impossible for TCI to meet its own schedule or market expectations for transforming itself into a multimedia powerhouse.

“My job now is to prick the bubble. Let’s get real,” Malone said in the interview.

Coincidentally, TCI this week assumed control of Spokane County’s largest cable TV franchise, with 91,000 subscribers, from Cox Communications Inc. The change was part of a long-awaited swap of cable franchises in several communities.

Malone has been signaling for months that the company intends to take a more deliberate approach than it may have indicated earlier toward offering telephone and Internet service and concentrate on its cable TV business.

But his comments in the newspaper interview were his most public effort to outline the company’s latest perception of its opportunities.

“We were just chasing too many rabbits at the same time,” Malone told the newspaper. “The company got overly ambitious about the things it could do simultaneously.”

Malone has long been hailed as one of the nation’s most powerful media executives, presiding over a company that delivers programs into about 14 million homes - or about one in every five cable subscribers.

That size of distribution system gives TCI enormous influence over which cable networks can be successful.

Malone was among those cable executives who saw the future of the business in cable’s ability to deliver phone service and access to the Internet system of computer networks as well as TV programs.

“If you read our annual report last year, you’d think we were one-third data, one-third telephone and one-third video entertainment, instead of 100 percent video entertainment and two experiments,” he said.

He said the hype affected both TCI’s staffing and the perception of the business.

Malone said he now doesn’t know if the technology that cable operators are deploying to permit telephone communications over cable lines is “the right technology, given the understanding we currently have of where the business is going.”

Malone, 55, recently immersed himself once again in the day-to-day operations of TCI after pulling back earlier in 1996 to focus on broader strategic issues facing the company.

In the interim, the company’s stock price traded near its lows for the past year and its cable business lost customers to higher rates and increasingly aggressive satellite TV services.

Malone said TCI’s disappointing third-quarter financial results served as a “wakeup call” for him and prompted a reassessment inside and outside the company.

TCI is currently introducing Internet access to customers in Hartford, Conn., and the San Francisco Bay area cities of Fremont and Sunnyvale, Calif. It is offering telephone service commercially in Hartford.

It also plans to offer those services eventually in Arlington Heights, Ill., a suburb of Chicago.

But TCI spokeswoman LaRae Marsik said the company has said it has made no capital investment commitments beyond those markets.

Meantime, TCI hopes to begin offering digital cable TV service later this year that will improve the picture and sound quality while giving viewers more flexibility on when to watch programs.

Such a system is currently being tested with over 500 non-paying subscribers in Hartford.

Malone said when the equipment needed for the digital cable delivery is in wide release commercially, it will “knock the socks off” satellite dish companies. But the delivery of the digital boxes has been delayed for two years.