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Comcast pushing digital cable

The cable operator is on a fast track with its digital cable boxes, looking to increase their production tenfold during the next six months.

Cable operator Comcast is on a fast track with its digital cable boxes, looking to increase their production tenfold during the next six months, the company's president said today at an investment conference.

Brian Roberts, speaking at the NationsBanc Montgomery Securities conference in San Francisco, said Comcast had 3,500 digital cable customers at the end of June, and projected that figure would rise to 50,000 by the end of the year.

"Digital cable boxes will be our answer to [competition from] satellites," he said. "One year ago, we talked of digital modems, now we're installing them."

Comcast's efforts come as the cable industry races to expand its market share among consumers looking to tap into the Internet. It faces tough competition from satellite companies offering better reception and more channels through digital transmission technology, as well as from telecommunications companies that are offering other forms of access, like digital subscriber lines or DSL.

The company also has added 24,000 miles of fiber optic upgrades, bringing its total fiber network to 80,000 miles of wiring. With that addition, Roberts noted, Comcast upgraded 83 percent of its cable network.

"When [Microsoft, founder] Bill Gates saw [those figures], that's when he decided to invest $1 billion into the company," Roberts said.

Looking to expand bandwidth for the computer industry and drive sales of its software as a result, Microsoft last year invested $1 billion in Comcast. Earlier this year, the software giant made a smaller $212.5 million investment for a 10 percent stake in Road Runner, which provides high-speed Net access via cable.

Microsoft is working to get the next generation set-top box geared up to run its Windows CE operating system. But Roberts said that, until Comcast tests that second-generation product with Windows CE, the cable operator will not commit to using it--despite the software giant's investment.

Roberts also noted that Comcast had more than 25,000 @Home cable modem customers at the end of the second quarter, and said he anticipates that those figures also will rise to 50,000 by the end of the year. Comcast is one of several cable companies that hold an investment in @Home.

And as the Year 2000 rolls around, Comcast--the nation's third largest cable operator, with 4.5 million customers--also expects to add IP telephony products to its offerings, Roberts said.