What does DSL mean to cable modems. It means cable needs to deploy its boxes faster.........................................
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Broadband Bulletin
DSL Competition for Cable Modems? No Problem!
Stay the course is the advice for cable operators who might be panicked about the Universal ADSL Working Group's decision to pursue a standard digital subscriber loop technology. While the announcement of an alliance between RBOCs and Intel [INTC], Microsoft [MSFT] and Compaq [CPQ] could have a negative psychological impact on cable operators offering high-speed Internet access services, it shouldn't, says Deutsche Morgan Grenfell analyst Doug Shapiro. An accelerated deployment of high-speed services by RBOCs could "light a fire under cable operators to push deployments faster," he writes in a recent report. In addition, cable ops can piggyback off the marketing efforts of the phone companies, which will increase overall consumer awareness about high-speed services. "The more market there is for any product, the more potential there is in the marketplace." says Bruce Leichtman, a Yankee Group analyst. However, cable ops shouldn't take the news lightly. The presence of the RBOC/computer consortium means a faster rollout on the part of cable ops is necessary, he says. Just how serious the group is in pursuing standards and delivering product remains to be seen. But the RBOCs must confront technical hurdles first. The quality of the service is significantly lessened when the user is more than 10K feet, or about 2 miles, from the central office or network terminal. In addition, as much as 50% of local loop connections cannot support DSL, some industry estimates suggest.
Offering DSL at rates of $100 or less, analysts and cable executives have said, could cannibalize the Bells' more profitable T-1 business, whose bills average $250-$1000/month for business customers. But Bell Atlantic [BEL] says it will market DSL to large and small businesses-and consumers. Today's DSL prices range from $80-$100 on the low end to several hundred dollars a month. Despite analysts' expectations of a pricier service, the consortium has proposed to offer DSL for about $45/month.
Cable modems have time on their side. With about 110K customers to date, cable ops have a commanding lead over the 4K-7K customers DSL services claim. And the group doesn't expect widespread deployment of the technology until the end of 1999. That should buy cable ops some time to protect their lead, push forward with deployments and make a name for their services. |
