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Cable modems are the mode

Despite some hiccups, high-speed Net access over cable is surprisingly popular among growing ranks of users.

Despite some hiccups, high-speed Net access over cable is surprisingly popular among its growing ranks of users, and it could rev up investor confidence in the moribund cable TV industry, according to a new survey of consumers by Deutsche Morgan Grenfell.

Commercial service has been rolled out in 12 markets since December and could increase by fourfold by year's end. "Cable operators are not lying; users do love the service," the report concludes. "Little else in the cable industry seems to be as exciting in 1997."

Of course, there are detractors: "When the service is good, it's great, but there are a lot of technical problems, a lot of outages, and lost email," said a user of Time Warner's Road Runner service, according to the report. "I kept my ISDN line and my AOL service because they are more reliable."

Another complaint: While faster than conventional Net access, the actual speed of the service falls well short of what is promised.

The young industry is also under threat because its number of users remains small and competition is stiff from telephone carriers, which are rolling out their own high-speed services such as ISDN.

Still, the report offers a sign of hope for a much-hyped service that has suffered from myriad delays. The report is based on detailed interviews with about 30 users of services such as @Home, owned by Tele-Communications Incorporated, Cox, and Comcast; Time Warner's Road Runner service; and US West Media's Highway1 service.

The users were located without the assistance of the cable operators and chosen at random, said analyst Doug Shapiro. DMG also disclosed it is a market maker in Comcast and TCI but none of the others.

Some conclusions:

  • Responses by @Home and Highway1 users were "overwhelmingly positive," while reviews by Road Runner users were mixed. Some Road Runner users complained about poor customer service, inconsistent speeds, and frequent outages, although they have seen some recent improvement. Road Runner also said it was upgrading software to improve network problems.

  • While impressive, the speeds fall short of what is promised theoretically. Users described speeds of between 40 kbps and 1 mpbs--much less than the 10-mbps maximum output that is promised.

  • Despite the negative perception of cable TV operators, many users rated customer service from "more than adequate" to "excellent."