Consumer cable modems to be OK'd

The Cable Broadband Forum (CBF), an industry trade group advocating high-speed Net access over cable networks, will tomorrow unveil a list of cable modem makers whose equipment can "talk" to equipment made by rival manufacturers. Industry consortium CableLabs, which performed the testing, will also be on hand.

Cable companies have been anxiously awaiting standards-based modems, which will allow them to provide high-speed Internet access with lower service and equipment costs, presumably hastening its market acceptance. "Ultimately, this is first step towards retail distribution of cable modems," said Patti Reali, a telecommunications analyst with the Gartner Group consultancy.

But most consumers won't see anything on store shelves until around the third quarter of 1999, Reali estimated.

The CBF is calling the announcement a "critical step forward not only for the industry, but deployment and use of cable broadband service," according to a statement detailing plans for a press conference. Exactly how big a step forward the industry will take is still open to debate.

For consumers, certified, standards-compliant modems could be purchased by consumers at retail stores starting in the fall or possibly sooner, and used with any service provider's equipment. Currently, some stores in limited areas of the United States carry cable modems for sale, but generally they can only be used with an ISP in that region. (See related story)

For equipment vendors, certification means that cable operators will be more comfortable buying their equipment. Nine vendors have submitted equipment for testing, including 3Com, Cisco, and Com21, and Nortel. Results of the tests are being shrouded in secrecy; vendors won't be notified whether or not their equipment passed tests until an hour before tomorrow's press conference.

"It's like the election of a new pope," said Leslie Ellis, senior analyst of broadband technologies at Paul Kagan Associates. It will likely be the first time in seven previous test cycles that at least one vendor has made the grade, Ellis forecasted.

While test results remain a secret, it's already obvious that the retail market for cable modems will develop at a modest pace.

According to industry research, about 520,000 households now subscribe to a cable modem service. That compares to around 15 million customers of America Online's dial-up modem service. Leading cable providers include @Home and RoadRunner.

Those subscription numbers will start picking up with the deployment of standards-based cable modems, but a number of issues remain in getting high-speed service to consumers.

For one, cable companies are still building out the links between homes and the cable company's offices. According to Kagan estimates, TCI, the largest cable operator, will only have between 50 to 60 percent of homes in its service areas ready for two-way communications by the end of 1999; Time Warner Cable, the second largest cable operator, expects to have 85 percent of its homes ready during that same time period, with overall industry numbers pegged at around 40 percent by other analysts.

Once two-way networks (upload and download) are in place, there is still the matter of putting more equipment in place in the cable plant so that service can actually be turned on to customers.

"There's a lot more work ahead," Ellis summarized.

Industry executives are expected to address these and other challenges facing broadband deployment in tomorrow's press conference, while also detailing the advantages of cable service versus digital subscriber line technology being offered by regional Baby Bell companies.