As MediaOne launches high-speed Net access via cable in Los Angeles, a study predicts use of cable Net access will rise, though it faces several hurdles.
MediaOne, a partnership of USWest Media Group and Continental Cablevision, plans to blanket communities throughout Los Angeles (the nation's second largest city) this year and next. It now serves more than 10,000 customers nationwide and passes by 1 million homes. The company will charge $39.95 per month for the service, on top of a $99 software installation charge--the typical going rate. Non-cable subscribers pay $49.95 per month.
MediaOne's rollout comes as other cable-modem service providers, such as @Home and Time Warner's Road Runner, also are launching national expansion plans. Though they are growing, their share of the Net access market still is minuscule.
The nascent cable-modem industry faces many hurdles. The cable TV industry must overcome its reputation for providing sometimes indifferent service, and some customers complain that the promised speeds--more than 50 times faster than a standard 28.8 kilobit-per-second phone modem--are lower than expected. (See related story) Competition from competing technologies, such as xDSL (digital subscriber line), also is intense.
Still, a study released today by Forward Concepts remained bullish on cable modems. They will grow to an installed base of more than 7 million units, with unit prices falling to less than $150 by the year 2002, more than four times the residential DSL base, the study contended. Cable is forecast to beat DSL worldwide as well, but by a slimmer margin.
DSL's major obstacle is overcoming high-cost barriers, the report said. But it predicted that the average DSL modem pair will drop to $200 by the year 2002, from $2,400 now. DSL providers remain optimistic on their prospects, mainly because of ease of installation on existing copper wires.