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To: Thu Ra Tin who wrote (855)	12/7/1997 8:12:00 PM
From: Bob Zacks	Read Replies (3) \| Respond to of 29970

Could Scientific America be the lucky one getting this contract? Cable Modems Priced for Consumers Interactive Home / December 1996 The key to economical deployment of cable modem service is the cost of the cable modem. Scientific-Atlanta's new product, the dataXcellerator, is the first cable modem offering that breaks the $300 price-point for cable modem hardware. Additionally, it opens up opportunities for an entirely new way to look at cable modems in terms of a midband to broadband range of offerings. The dataXcellerator also confronts some of the other factors that have contributed to the slow rollout of cable modems: the lack of two-way plants and the lack of trained cable modem operators. Critical Price Point Finally Reached Scientific-Atlanta is offering a new and consumer-friendly price point for the dataXcellerator: $199 per unit for quantities of 50,000 and $259 per unit for quantities under 50,000. Competing cable modem hardware, on the other hand, runs in the $400 to $600 range. Since the market is still relatively new and cable companies are strapped for cash, this price point will appeal to cable companies for two reasons. First, and obviously, this is much less of an investment for the cable companies if they are to subsidize the hardware, which up until now, has been the primary means for getting cable modems to their customers. And second, this price point opens up the possibility of selling the cable modems in retail outlets. A price of $259 is within reason for a consumer to spend on a "modem." To help promote the product, Scientific-Atlanta has an offering to manage cable companies' cable modem systems remotely. It provides status monitoring and remote network management through the company's Melbourne, FL, operations center. The help desk and other optional support services are aimed at reducing multiple service operators' (msos) staffing requirements. Using Reliable, Proven Technology The chip-set and tuner that are used in the dataXcellerator are well-established Scienific-Atlanta products. This chip-set is the same one used in Sega games, which have shipped over 800,000 units. It is a proven technology. On the other hand, asymmetric digital subscriber line (adsl) modem technology-cable modem's main competitor in the future-has not yet been proven in any large-scale test, let alone full deployment. Also, the other cable modem hardware manufacturers, such as Motorola and Hewlett-Packard, are not as focused on the cable industry; Scientific-Atlanta has expertise in this area. Telco Return: Practical and Economical The dataXcellerator uses a telco return for its backpath. The telco return is a viable option for cable companies, because the installed base of two-way cable networks is less than 20 percent in the U.S. Currently, the cable companies are not in the financial position to upgrade their infrastructure, so the telco return provides a viable interim solution for the cash-strapped cable companies. In fact, @Home has recently announced that it will include not only telephone return, but also dial-up entry as well, thus indicating that telco return will most likely be not just a second-choice solution, but the preferred solution and means of backpath access in the near future. Additionally, as cable operators migrate to two-way service, dataXcellerator modems will be designed to operate on the same network, each providing different tiers of services. Analysis: Relatively Slower Speed is OK The dataXcellerator only moves data at speeds up to 1.2 Mbps, as opposed to 10 Mbps which is the most common speed for cable modem hardware. However, this relatively slower speed is still about 40 times faster than today's fastest telephone modem and about 10 times faster than isdn. Although speed appears to be the main selling point of cable modems, it is only one of its selling points. Content and the technology platform, combined with speed, will sell cable modems. And the lure of faster delivery speeds will encourage content developers. Easy customer-installation, improved billing services, and customer service support will be additional selling points of cable modems.