The US Experience

Highlights

• Limited penetration even in the US.
• Like in India, upgrading cable networks is a costly & time-consuming process.
• ISP provides Internet connectivity while cable-company gives technical support. 

Cable Internet services have a limited reach even incountries like the US. This is because many of the cable companies there are yetto upgrade their networks by installing fibre-optic lines and two-waydata-transmission capabilities. Even though, thousands of cable homes in the USare being upgraded daily, it will still take some time before the serviceavailability really extends across the country. Like India, upgrading of thecable networks is considered an expensive and time taking business. Till date,the cable industry has invested well over $6 billion to upgrade their existinginfrastructure. At the core of this tremendous effort is the fact thatubiquitous and affordable broadband services represent a giant leap in theevolution of the Internet. Market research estimates believe that by the year2002, US will have around 11 million households accessing Internet over cable.

There, the local Cable TV company is usually responsible forinstalling the cable modem and managing the quality of the service over thecable network. The cable company’s main network office, commonly called the"headend", is connected to the cable ISP’s national backbone. It, inturn, is plugged into the Internet. The ISP actually provides the Internetconnectivity, while the cable company will provide basic technical support. Inother words, the cable companies and the ISPs have distinct responsibilitieswith the two being partners in the access business. In US, it is believed thatsome five percent of all Internet connections are cable-based and this isgrowing.

In most of North America, cable modem Internet generallycosts the users around $30 to $50 a month. Cable modem service installation feesusually run from $50 to $150. It covers cable wiring, an Ethernet card for theuser’s computer and software configuration. The monthly fee covers cable modemrental fee, unlimited Internet access besides Internet application software suchas a Web browser and e-mail applications. Companies like @Home and RoadRunneralso offer e-mail accounts and free Web hosting. Add to this a slew of nationaland local content tailored to the subscriber’s high-speed connection.

Few years back, some of the leading cable TV networks cametogether to form ISPs that can offer cable modem Internet. The largest cable ISPis @Home. It was founded by TCI (now owned by AT&T), Cox Communications,Comcast and others. Another ISP, RoadRunner, was created by Time Warner Cableand MediaOne. Compaq Computers and Microsoft are the other stakeholders. Cablecompanies serving 80 percent of all North American households have signedexclusive service agreements with @Home or Road Runner. Two other cable ISPs–HighSpeed Access Corp. and ISP Channel–serve the remaining US and Canadianbroadband households. Other major cable companies, Adelphia (US) and Videotron(Canada), offer their own cable modem service.

Usually, cable Internet services are jointly marketed undernames like Cox@Home or MediaOne Road Runner. For example @Home has tied up withsome 18-20 cable operators offering Internet connectivity to around 17 millionhomes in a cable community of 55 million homes. The company reportedly hasaround seven lakh subscribers. The other leading US cable Internet provider,RoadRunner’s service currently passes 17.4 million homes.

Ravi Shekhar Pandey