meday, consumers may be able to
buy HBO, the Nashville Network and
speedy Internet access - all from the same place.
Cable companies can currently pipe Internet data into homes along the same
connections they use to vend video. Subscribers download data at roughly 1.5
megabytes per second, as fast as the high-volume lines connecting most local
area networks, usually at a subscription price of around $40 per month. If
you want to get a look at cable Internet's progress, the D.C. region may be
one of the better places in the country to do it. No fewer than four companies
are trying out their cable Internet moves in the D.C. metro area, attracted by
our propensity for all-things wired.
Three cable players already offer Internet access in Northern Virginia, and at
least one more could swing into action any day now. One player is Jones
Communications, which offers Internet service to cable subscribers in
Alexandria and eastern portions of Prince William county. Jones, which
kicked off Internet service in March 1996, has connected 2,500 cable Internet
subscribers, a small but significant fraction of its 430,000 television
customers. The company's new partnership with Philadelphia-based Comcast
Corp. may give Jones even more incentive to keep pushing the cable Internet
envelope: Comcast boasts a $1 billion investment from the deep-pocketed
Microsoft. And Microsoft has shown great interest in cable Internet, believing
it to be the high-speed consumer infrastructure of the future.
Another emerging player is Fairfax-based Media General Cable, which also
serves a large swath of Northern Virginia homes. Working with The Potomac
KnowledgeWay Project, Virginia's Center for Innovative Technology and
systems integrator BTG Inc., Media General tested its cable Internet service
on a handful of small offices and home offices in Fairfax city for several
months starting in late 1996.
Media General plans to begin a cable Internet service rollout in October or
November. Sometime next year, Media General should begin upgrading its
network to a hybrid fiber-coaxial infrastructure - the magic blend which
allows for high-speed, two-way transmission of Internet, video and even
voice traffic, according to spokesperson Lyn Ganschinietz.
Breathing down the necks of the other two is Princeton, N.J.-based RCN
Corp. RCN, which acquired Springfield-based ISP Erol's Internet earlier this
year, has partnered with Pepco subsidiary Potomac Capital Investment Corp.
to deliver local phone service, cable television and Internet service to
D.C.-area homes. The two partners, who call their venture Starpower
Communications, are spending as much as $150 million each to build out a
fiber optic network and sell bundled services over that network.
RCN already offers phone, cable and Internet service to customers in Boston,
New York and the Lehigh Valley of Pennsylvania. In April, Starpower began
selling local phone service to D.C. residents, and plans to expand its local
phone offerings into portions of Maryland and Virginia this month. Down the
line, cable Internet service is sure to follow.
Another player in the cable Internet arena is the BTG-backed Community
Networks Inc. - a subsidiary developed to help cable operators break into the
Internet business. The venture burned through money at a dramatic rate and
was quietly thrown into low gear. In recent months a few players, including
Los Angeles's Internet Ventures Inc. have been in talks to buy what remains
of CNI. Like CNI, Internet Ventures makes a business out of selling cable
Internet smarts and content for cable companies that want to stick to the
television basics.
The road ahead isn't easy for any of these contenders. At the moment, RCN is
busy enough trying the wrest customers away from super-entrenched Bell
Atlantic; Jones has stopped selling new cable Internet subscriptions due to a
dispute with shareholder Bell Canada International; Media General is just
getting up to speed; and CNI's future is still in question. Nationally, it could
be years before many cable companies set up the equipment, build up their
networks and get their marketing departments in gear to push Internet
services to the masses, says Bruce Leichtman, director of media and
entertainment strategies with Boston research firm The Yankee Group.
To date, there's still only a scant number of cable Internet subscribers
nationwide. While 67 million U.S. homes subscriber to cable television
service, there are only 200,000 cable Internet subscribers. Under the
circumstances, Leichtman suggests that a four-way struggle for market share
could move D.C.'s cable Internet business miles ahead of other metro areas.
If companies compete loudly, consumers will learn about and begin to want
this still-exotic product, he says. "Any market where cable Internet already
exists puts that market way ahead others," Leichtman says. "The more
companies that are in there, and the more awareness, the more likelihood that
customers will make a purchase."
c Copyright 1998 The Washington Post Company |
