TO: All - Communications Week 11/11/96
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November 11, 1996
Issue: 637
Section: Internetworking -- Hubs, Bridges, Routers, Gateways, Premises Switches,
Modems
$199 Cable Modem -- But is low cost enough to appeal to cable
companies?
By Jeff Caruso
In an attempt to jump-start the cable modem market, Scientific-Atlanta Inc. recently unveiled a
cable modem priced at $199 in large quantities.
Although end users wouldn't purchase the modems themselves, cable television companies are
more likely to deploy data networks if they can get modem costs down from today's $450
thresholds. Scientific-Atlanta estimates that modems represent about 70 percent of the cost of a
data network.
Cable modems for two-way networks cost about $450, but cable operators want to see pricing
down around $300, said Steve Craddock, vice president of new media development at
Comcast Cable Communications Inc., Philadelphia.
Scientific-Atlanta can cut pricing to the $199 level by using "telco-return," where data flows to
the user via coaxial cable, but the return channel to the network comes from the user's telephone
line using an analog modem to dial into the cable company's head-end.
Thus, cable companies could avoid expensive upgrades, since only about 10 percent of all
installed coaxial cable is two-way.
As major cable operators like Tele-Communications Association, Covina, Calif., pulled back
from hybrid-fiber coax networks, so too has Scientific-Atlanta abandoned plans for a two-way
hybrid-fiber-coax modem in favor of the telco-return option, said Mark Weiss, director of field
marketing at Scientific-Atlanta.
The Infrastructure Problem
Whether cable companies would use telco-return modems depends on where they want to
deploy the technology, Craddock said. The modems are good for remote areas, in markets
where cable companies don't plan to upgrade for a while.
"Price is not the primary obstacle right now," said Christine Heckart, senior consultant at
TeleChoice Inc., Verona, N.J. The biggest problem is upgrading the infrastructure for high
quality, two-way data transmission, which can cost cable companies more than $2,000 per mile.
While telco-return systems like Scientific-Atlanta's try to get around this obstacle by using the
existing infrastructure, Heckart said the return signal has to be higher than the 33.6 kilobits per
second the vendor proposes. For the system to be attractive, it should send data at 56 Kbps,
she said. "If analog modems were a good solution, we wouldn't need cable modems or
X-DSL," Heckart said.
Copyright * 1996 CMP Media Inc.
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