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To: Johnny Canuck who wrote (40345)	11/13/2003 2:28:34 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71113

Cable joins broadband price war Last modified: November 12, 2003, 12:00 PM PST By Jim Hu Staff Writer, CNET News.com Cable companies are upping the ante in a burgeoning broadband price war, offering aggressive promotions aimed squarely at phone company rivals and mulling "tiered" services that tie cost to speed. In one of the most aggressive pricing moves by a cable company yet, Comcast has quietly begun offering DSL (digi tal subscriber line) customers in California, Illinois and Maryland 12 months of cable broadband access for $19.95 a month. (Comcast's standard broadband service costs $42.95 a month for cable television subscribers.) News.context What's new: Comcast is offering one year of cable broadband access for $19.95 a month, upping the ante in a burgeoning broadband price war. Bottom line: The promotion highlights an increasingly contentious battle with phone companies over the rapidly growing r esidential broadband market. Internet households are increasingly ditching their dial-up connections, so there is an opportunity to grab market share. More stories on this topic Cable executives are also warming up to the idea of offering a range of service levels at different prices as a way to appeal to cost-sensitive consumers. Charter Communications already offers tiers with different maximum download speeds, and Cox Communications has signaled its intention to provide similar choices in price and service. "The cable industry is admitting that they are at least seriously considering offering a lower-priced product," Mark May, an analyst at Kaufman Bros., said. The cable industry's price maneuvers highlight an increasingly contentious battle with phone companies for the residential broadband market, which is growing rapidly. Households with Internet access are increasingly ditching their dial-up connections and upgrading to faster, always-on broadband services. The main beneficiaries of this trend have been the cable companies and the Bells, who currently o ffer most of the broadband pipes to the home. Since first offering broadband in the mid-1990s, cable companies have barely budged from the range of $45 to $55 a month, and have enjoyed little competitive threats from the Bells. However, over the past year the Bells began betting that cheaper prices would pull in more subscribers than cable's faster, but more expensive, service plans. In re taliation, cable companies--including Comcast, Time Warner Cable, Cox Communications and Charter Communications--boosted their base download speeds by up to double their rates. These moves have not resulted in a significant widening or narrowing of the market share gap between cable and DSL. Broadband demand continues to rise and both technologies are reporting double-digit gains from last year. Last quarter, Comcast reported a 39 percent jump in broadband subscribers to 4.9 million, the highest total of any provider. Meanwhile, SBC, the largest DSL provider, reported a 13 percent jump to 3.1 million subscribers. Still, the cable industry increasingly appears ready to match or beat DSL on price, as well as performance, in the battle for market share. Don Logan, chairman of Time Warner's Media and Communications division, said in a conference call about the company's October earnings that DSL price cuts have not yet hurt cable. However, he said that discounts could be one "arrow in our quiver" to keep subscriber growth going for its Road Runner cable ISP. .