Jaili Huang

Cable ahead in high-speed race - Cable modems are surpassing the telephone in the high-speed Internet access industry.

By Dick Satran, Reuters

ZDNnet, ZDNN Tech News, February 5, 1999

The battle for the burgeoning high-speed Internet access market has been hyped as a closely fought match of communications summons. In one corner: cable companies touting high-speed modems that zip data along cable's vast fiber-optic networks. In the other: local phone companies sporting a technology called ADSL that promises to turn sluggish copper wires into data sprinters.

Cable modem is gaining ground over telephone in the high-speed Internet access market war now being waged in U.S. homes. By the end of 1998, Cable modem reached 7000,000 installations but only about 50,000 high-speed telephone lines have been installed.

Several important factors have been pointed out for the future of the cable modem:

  1. Cable clearly has a lead in high-speed access to the home
  2. Increased use of digital television technology through cable systems will also boost the sector
  3. Cable modems, now in the $300 range, are a barrier to entry for some consumers but they will soon fall to the $150 range, giving another spur to the market’s development

Cable modems, although capable of high potential access speeds, also have drawbacks. Primarily, the technology is broadcast-oriented and the signal is shared between the subscribers in a specific area. The more subscribers in that area, the less bandwidth is available to each. Moreover, cable access is only available in a limited area, and offers the user no choice regarding providers. It is available only through the cable company, which has little experience with Internet services.

Cable access providers, which deliver data over cable-television lines, are competing for customers and attention with the DSL technology, which use traditional copper writing. Both sides can only deliver their next generation services to a few scattered areas across the country at present, and face substantial costs in upgrading their networks before they will be ale to reach a larger public.