Cable for geeks - Cable television wants to offer online service

Brandweek, May 4, 1998 by Dan Fost

THE @HOME NETWORK OFFERS COMPUTER USERS QUICK ACCESS TO THE INTERNET THROUGH CABLE LINES. USERS LOVE IT, BUT FOR NOW, THAT'S A SELECT GROUP.

Dan Fost writes about technology and lives in the San Francisco Bay area.

Cable operators don't just bring television into the home any more. The industry wants to be your Internet service provider. Almost every ISP, from little locals to America Online, offers its services over telephone lines. But as those narrow wires create a World Wide Wait, cable operators think their fat pipes can break the logjam. Cable has its own hurdles, though, including wires installed for one-way television delivery and the lack of an industry standard for cable modems.

For the past year, however, in an increasing number of select communities, the @Home Network has offered Internet connections over cable lines. And if you talk to people who have connected to @Home, you start to believe that the future of the Internet will arrive on cable.

It's a place where Web sites pop up on screens like television channels. Where large digital files--video, audio, text, software--can be downloaded in minutes, if not seconds. Where cyberspace runs all the time, without ever having to dial a service provider.

"It's the best thing since sliced bread," gushes Rodger Kilo of Petaluma, Calif., a product support network specialist at Autodesk, a large software company in Marin County Calif. "I wish I had this throughput at work--and I'm at Autodesk, and the throughput here ain't bad."

The appeal is the speed. It's 75 times faster than ISDN. It runs at least at 1.5 megabits per second--the speed of a T1 line--and can reach speeds of 4 megabits per second. And the price is right. Connecting your computer to cable is about $45 a month, more expensive than a standard $20 a month Internet service provider, but much less expensive than ISDN lines or even vaunted T1 lines, which can cost upward of $600 a month.

"I talk to my friends that have ISDN connections, and they pay in one week what I pay in a month," says Shaan Hurley, 31, who also works at Autodesk and lives in nearby Petaluma.

The @Home Network was slow in getting off the ground, and it's still only available in select markets. Recent first quarter 1998 results show the company--which is publicly traded on the Nasdaq exchange--serves 100,000 people in 26 U.S. and Canadian markets. Revenue for the first quarter of 1998 was up 616 percent, to $5.8 million, but the company has a long way to go before turning a profit, posting a loss of $95 million. Of course, with investors such as Motorola and Sun Microsystems; cable operators Tele-Communications Inc., Comcast, Cox Communications, Cablevision Systems, InterMedia Partners and Marcus Cable; and Canadian cable operators Rogers Cablesystems and Shaw Communications, @Home has bought itself some time before it has to balance its books.

With many telecommunications titans jockeying to see who will rule the emerging Internet market, @Home's initial experience provides the first real taste of what cable can bring to the table. Time Warner offers a similar service called Road Runner, which performed impressively when rolled out in Portland, Maine. Analyst Michael Harris, president of Kinetic Strategies of Phoenix, a broadband Internet research firm that publishes Cable Datacom News online, says that in less than a year, Roadrunner became the second-largest ISP in Portland behind AOL, with 7 percent market share. "And that's not a techno-savvy market," Harris adds.

A key difference between cable Internet access and ISPs' telephone modem service is that you don't need to dial in to get online. You're on. All the time. Checking email takes seconds. Surfing becomes spontaneous. Harris, who has @Home at home, says that when he travels and is forced to use dial-up services, he finds them "barbaric." He wonders: "What is this beep-whiz-hiss-crackle slow thing?"

Installation is easy. Users say it cost about $150. Hurley says that even though he already had cable, a pair of technicians came to his house and, in 90 minutes, had him ready to go. Sometimes, a special networking card is inserted into the computer. Users find few drawbacks with the service. Kilo says he's had some unexpected late-night down times, and he's seen some Canadian users post gripes about spotty usage. He also has occasionally been put on hold for up to 20 minutes on the company's toll-free tech support line. Matt Brown, 33, of Fremont, Calif., says in a few instances his email was delayed, but he's never been without service.

In addition, users will either hit a site with a slow server or one jammed with visitors. In those instances, @Home can do nothing. "It doesn't matter if you've got a race car or a Volvo if you're stuck in rush-hour traffic," Kilo says.

"The only limitation is the other server," says Hurley. "If the Web page is on a slow server, it's a slow transfer. But a lot of the big sites have really big transfers."

One feature that @ Home offers is the caching of popular files. When a fellow @Home user in your region visits a Web site, that data is stored on a local @Home server. When you click there, the cached information shows up instantly-then gets refreshed invisibly.