Wednesday, March 19, 1997

Cable companies begin selling new way to plug into Net

By JEANNINE AVERSA

Associated Press

NEW ORLEANS (AP) - John Sviokla jokes that his Newton, Mass., neighbors have "cable envy." But it's not because of the shows he can get. Sviokla is using his cable TV line to surf the Internet, shop, download work files, exchange e-mail and help his five children with homework.

He is one of several thousand people who are using powerful devices called cable modems to link their personal computers to cable TV lines. Users can watch TV while they tour cyberspace over the same cable line.

Showcased at the cable convention here, cable modems can move text, voice and pictures 50 to 100 times faster over cable TV lines than standard telephone modems used to send and receive information over personal computers.

They're also faster than the telephone company's high-speed data lines using "ISDN" technology.

"For $50 bucks a month, I think it's a bargain for the speed I'm getting," says Continental Cablevision customer Sviokla. "It flies."

Sviokla does have one complaint: To hook up another computer in his house to the service, he would be charged a second, full monthly rate on top of another installation fee. That policy is not unusual.

Other companies that began selling the high-speed cable hookups over the past six months include Time Warner Cable, Cox Cable Communications, Comcast Corp. and Tele-Communications Inc.

Akron, Ohio; Baltimore; Hartford, Conn.; Sarasota, Fla.; Orange County, Calif. and San Diego are some of the markets where the service is now offered. Many more markets are slated.

Companies charge on average about $100 to install the service.

Monthly fees range from $34.95 to $60 a month, depending on the market and whether the buyer is already a cable customer of the company. That fee includes modem rental, unlimited Internet access, e-mail and, in some cases, unlimited local or regional content like a cybertour through the Walters Art Gallery in Baltimore, listings of community events and shopping services.

To provide service, companies are spending billions of dollars to upgrade their cable plants.

The biggest challenge: making sure the "return path" - the cable from a customer's home to the main cable plant - is free from interference that can disrupt computer messages.

Another problem: getting the knack of installing the service, which usually requires two technicians.

"I can tell you the first couple of installations took three people about seven hours," recalls Steve Hill, senior vice president of broadband data service for Continental. The average installation is about two hours.

"I just hope I don't move. I'd hate to lose the service now that I have it," says John Moore, a Time Warner customer in Silver Lake, Ohio.

Moore pays $39.95 a month, about the same as the second telephone line he used to rent for his computer so he'd have a free line for calls.

Once uniform technical standards are implemented, people will be able to buy cable modems - rather than rent them - from retailers. When that happens, a cable modem will work on any cable TV line. But that's not the case now. The cable industry's research and development facility, called Cable Labs, announced at the show here Sunday a final set of technical specifications, moving consumers a crucial step closer to the day when they purchase the devices in stores.

Prudential Securities estimates cable modem business will grow from $40 million this year to more than $450 million in 2000. By then, cable companies should be making an estimated $1.6 billion from high-speed data services.

After being the butt of jokes for years about shoddy service, companies are striving to get high customer service marks from cable modem users. Customers say outages are rare, though a storm can knock out or disrupt service just as it does with cable TV.

Cable modem makers include Motorola, Bay Networks' LANcity, General Instrument, Scientific-Atlanta and Hewlett-Packard.

They are showcasing their devices along with cable modem newcomer 3Com Corp. which plans to have a modem on the market by late summer. Another newcomer, U.S. Robotics, also is displaying network technology that would help cable modems run faster.