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Bringing broadband to the masses

The chief of ISP Channel is on a quest to bring cable broadband services to rural communities, while other competitors focus on metropolitan markets.

SAN FRANCISCO--Larry Brilliant wants to change the world. But rather than spearheading international health care missions, the trained physician is pushing cable modems in rural areas.

Brilliant, chief executive of SoftNet Systems and one of the founders of The Well--a pioneering online community created in 1985 and acquired earlier this year by Salon.com--wistfully recalls The Well's heyday.

About the time electronic bulletin board systems were gaining steam, The Well helped shape a unique community of artists, poets, and hackers online. Now Brilliant thinks high-speed Internet access can do the same thing for small cities and rural towns.

"[Broadband is] going to affect the world in ways we can't even imagine now," a casually clad Brilliant said in an interview with CNET News.com.

Huge companies such as AT&T, Microsoft, and America Online are spending more than $100 billion to bring broadband to the masses. But while others in the industry talk about how high-speed Net connections will push e-commerce and so-called rich media advertising, Brilliant speaks of improving access to medical information and bringing data services to farmers.

What's up, doc?
A medical doctor by training, Brilliant spent time in India supporting the United Nations health care cause as a UN medical officer. He also was once involved with a philanthropic relief organization that helps blind children.

But make no mistake. Underlying Brilliant's capacity for altruism is a businessman who hopes to make a killing by selling broadband Net access.

"He was a total humanitarian. When he got back to San Francisco he got swept up in the tech stuff," said Michael Harris, president of Kinetic Strategies, a broadband market research firm. "Larry's kind of a visionary guy."

Since last year, Brilliant has run the show at SoftNet, a company with roots in the 1950s electronics field. SoftNet owns ISP Channel, a small cable modem service serving rural markets, and Intellicom, a data-via-satellite company.

Brilliant's plan: help small and medium-sized cable operators in rural markets offer high-speed Internet access over cable modems. ISP Channel, the largest portion of SoftNet's business, hopes to carve out a niche in smaller markets, while its larger brethren Excite@Home and Road Runner fight for subscribers in the metropolitan markets.

Sharing the bandwidth
Nationwide, broadband services have been slow to market, and even slower in smaller rural areas. That discrepancy, dubbed the "Digital Divide," has been cause for political concern in Washington.

"We've got to be ruthless about equality of access in rural markets," Brilliant said. Where other executives might say that to keep regulators off their backs, Brilliant's philanthropic background supports his zeal.

ISP Channel offers download speeds of about 500 kbps (kilobits per second) over cable, with upload speeds of about 100 kbps over a standard phone line using a dial-up modem.

Because ISP Channel does more of the work for small, resource-constrained cable companies--including installing cable modem equipment, marketing, billing, and customer service and support--the company takes a higher split of the revenue than similar cable partnerships that Excite@Home and Road Runner have with larger operators. Of course, ISP Channel's costs also are higher.

"Many operators don't want to be a very small fish in those very big ponds. How much attention would they get?" Kevin Gavin, an ISP Channel marketing executive, said of Excite@Home and Road Runner.

The company's agreements with its cable operators are typically longer-term deals than those enjoyed by Excite@Home and Road Runner, and also include the potential for revenue from Internet protocol telephony and interactive TV offerings, according to executives and analysts. ISP Channel has 41 affiliates in 13 states including Puerto Rico.

ISP Channel has 4,500 subscribers, compared with 320,000 for Road Runner and more than 600,000 for Excite@Home. But analysts believe the company is No. 3 in the nascent cable modem market. "Infancy is too strong a word for where we are," Brilliant said of the emerging industry.

Despite taking a tumble in May and June, SoftNet's stock has done well, climbing steadily since early 1997. Shares, currently in the low 30s, have traded as high as 69.5 and as low as 5.5625 in the past year. The company raised $142 million in an April secondary offering.