A way to get broadband into smaller markets

A way to get broadband
into smaller markets

Less expensive technology to serve rural areas

By David Everitt

    Cable modems have played a big role in getting the broadband internet out to homes and businesses. One segment of the cable market, though, has not been very well served: smaller markets.
    Distribution of high-speed cable net services is still a pricey proposition, and smaller operators have had trouble financing the upgrades that make it all possible.
   One way to get over that hurdle is to provide cheaper technology. It might not be as advanced as the high-end equipment used by the large cable systems but perhaps it could be sufficient to perform the basic tasks.
   A broadband technology company is currently exploring that route.
   ADC’s new product is a cable modem termination system (CMTS, for those collecting acronyms).
   A CMTS enables a cable system control center to connect electronic data to a network of customers.
   The new system, called the Cuda 1000, goes for upwards of $26,000, which is considered a good deal in the CMTS world.
   "There are a number of smaller cable headends across the country that are not ready to invest in something like the Cuda 12000 [ADC’s high-end model]," says Benoit Legault, ADC’s director of product management.
   "This new system is geared for headends serving 20,000 or less customers, both single homes and multi-dwelling units."
    One way ADC has been able to offer this system for less has been by integrating two CMTS units into one box.
    But limiting the capabilities has also been another factor.
    "The Cuda 1000 doesn’t include the same sort of redundancy and dual power supplies as the 12000," says Legault.
    "The 1000 provides high performance and a cost-effective way to offer high-speed internet access, which means a new revenue-generating service, but you have to be willing to take a hit if the system fails."
    How significant a market is there for this kind of cost-effective trade-off?
    "The demand for cable modem service is about the same in smaller, more rural areas as in urban markets, in terms of the percentage of consumers interested in getting this service," says Ryan Jones, an analyst with the Yankee Group. "So I’d say for smaller markets this system makes sense."
    The most attractive feature of the new ADC system may be what is called "SpectraFlow QoS Architecture."
    In plain English, that means the system can offer several tiers of internet service, allowing consumers to pay less for not-quite-so-high-speed access or pay more for maximum data velocity.
    "That’s real good," says Jones.
    Recently, some pundits have speculated that a more rapid rollout of broadband could give the slow, post-September-11th economy a shot in the arm.
    Will this type of CMTS help to accelerate that process?
    Jones is skeptical.
    "Right now, we’re looking at the top-10 cable operators, the biggest systems, serving 80 to 90 percent of the country’s homes. That’s where most of the development will be.
    "But this system will be good for the remaining 10 to 15 percent of the country that’s served by Mom and Pop operators," says Josh Wise, an analyst with Allied Business Intelligence.
    He adds that a more cost-effective system could have other economic benefits as well, which are more attuned to a global perspective.
    "This kind of system might have a lot of value outside the country, where lots of companies have only 5,000 customers."

-David Everitt covers television and technology for Media Life, writing from Huntington, N.Y.

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