The rollout of broadband Internet services in Australia has left a lot of people disenchanted. ARN looks at the reasons why and what lies ahead for high-speed cable modems.
Broadband is seen as the next major step in the evolution of the Internet. It provides access at speeds literally hundreds of times faster than the current 56Kbps narrow-band services, enabling the streaming of a wide variety of media including Web TV across the Net. There is no doubt the public and industry wants it, but under the current structure in Australia they either cannot afford it, cannot access it, or both.
Until this month, the retail channel had been left virtually totally out of the loop because Telstra, which has the monopoly on broadband - particularly cable services - opted for a proprietary system that only Motorola could supply equipment for.
That situation still exists, meaning that retailers cannot sell the equipment required. However, Harvey Norman, Tandy and Myer/Grace Brothers recently came to an agreement with Telstra to sell the Big Pond Advance cable service. Each of them will run Big Pond cable service demonstrations in selected stores and sign subscribers up for the service as an agent for Telstra who will still remain the sole supplier of the hardware.
Dick Smith had previously been the only independent supplier of cable modems but no longer sells them.
According to public affairs manager Nicola Rutzou, they didn't sell so the company has gone back to selling 56Kbps modems, which are still moving well, and will not market the Big Pond Advance service rather than the hardware.
Cable & Wireless Optus has indicated it will roll out its broadband service by the end of the year, but it will be a staged rollout, probably beginning in Sydney or Melbourne and Brisbane will be the only other city added in the foreseeable future.
C&W Optus is not saying what equipment it will be using, but unlike Big Pond Advance, it is likely to comply with the latest standards.
A new international standard for cable modems, called DOCSIS (Data Over Cable Systems Interface Specification) is due to be ratified over the next couple of months. Under the new specifications, any DOCSIS-compliant modem can be connected to a DOCSIS-compliant system.
However, Telstra's Big Pond Advance cable service is not compliant and Telstra will have to make significant changes and investments in new infrastructure to bring it up to standard.
It intends to do so, but until then Motorola's CyberSURFR modems will be the only ones that can connect to the service. Ironically, Motorola is not jumping for joy over the service either. So far only 10,000 of Australia's 2 million Internet users have moved from narrow band (standard telephone line) services to broadband cable and the exclusive deal they have with Telstra has not turned out to be the golden goose the company hoped it would be.
Motorola's business development manager, Judy Drane, said the level of public awareness of broadband had begun to pick up over the past few months.
"It is the difference between driving a Volvo and a Ferrari. It really enables the Internet to be part of the home situation. Dial up is just no comparison. Broadband has the flexibility of providing a 24 hour, very, very fast service."
She said there would be some enhancements to future modems including the introduction of a USB (universal serial bus) model, making it much easier for the consumer to set them up in the home. "It will eliminate the need for a network card." The USB modem will be included in the DOCSIS 1.1 standard to be ratified by Cable Labs, the organisation in the US charged with setting the standards for cable modems.
Motorola is looking at offering modems through retail channels but because of the complexity of setting up the current models, believe the market is limited and is happy to leave it up to Telstra to market them. However, with the introduction of USB modems, which will be more plug and play for people with cable connection, Motorola is expected to re-examine the retail market.
DOCSIS could be the fillip the modem market needs. It will open the market to many more players and give consumers the choice of either selecting their own modems or taking the ones on offer by the service provider. It will also open the way for PC manufacturers to eventually bundle cable modems with the new models.
3Com, which already supplies the network cards for Big Pond's service, has a DOCSIS-compliant cable modem that it is eager to get into the retail market.
David Elliott, 3Com's business development manager for cable access, Asia Pacific Rim, said the company was making "significant and continued investment in the emerging cable industry, DOCSIS standards and the retail channel".
3Com's US Robotics Cable Modem CMX is currently available for a suggested retail price of $550.
Bob Hayward of the Corby Group, recently told a meeting of IT industry executives on the Gold Coast it was essential that industry and the public had access to low cost, broadband Internet access at the same speeds as the United States.
"The Internet and broadband are the core technologies that everything revolves around but broadband costs in Australia are "rapacious".
"It costs $2000 to $3000 a year for a household link in Australia compared to $US20 to $30 a month in the US," he said.
Hayward, a former analyst with the GartnerGroup, said there were huge opportunities for content providers once an effective broadband network was established and available at reasonable rates to the general public.
Telstra charges a minimum of $65 a month for a maximum 100MB download and 24-hour-a-day access. Once the 100MB allocation is used, Big Pond charges 35 cents a megabyte for any further downloads. Critics claim that because every Web site you visit is considered a download, cable users are being slugged with monthly bills of up to several hundred dollars. On top of that, the subscriber has to fork out about $800 for a modem, network card and the cable connection.
Satellite hardware costs even more and has several disadvantages compared to cable including the fact it uses a narrowband dial-up uplink and can only download at speeds of up to 2 megabits per second compared to cable's 10 megabits per second.
The entry of Optus @Home into the broadband market later in the year is expected to have an effect on traffic charges. Telstra admits it is under intense pressure to lower its rates and is planning an aggressive price restructuring.
A spokeswoman for C&W Optus said a joint venture company was being formed by C&W Optus and Excite@Home to provide the broadband service and although it will initially concentrate on providing cable services it will eventually include satellite and other delivery mechanisms.
"We are still in negotiations with a number of cable modem suppliers and hope to make an announcement soon. We have not made any decisions as yet on what involvement the retail channel will have in marketing either the service or the equipment," she said.
Telstra's group manager of broadband Internet service, Melanie Feez, admitted the corporation was under fire over its broadband fees.
"We are certainly looking at our pricing, but our cost structures are very different to the US, particu-larly because at this stage 92 per cent of our traffic is coming from there. So we have backbone charges that the US broadband operator would not have. Having said that, we are scrutinising our pricing and have extremely aggressive targets for the next 12 months for broadband Internet. Clearly, to meet those tar- gets, we are going to have to look at the elasticity of our pricing."
Feez also indicated Telstra was ready to give up its monopoly on the sale of cable modem hardware and to hand much of the marketing of the service to the retail channel.
"We are very committed to moving to the DOCSIS standard, and very quickly, but that involves quite a bit of work and investment in our infrastructure because we have to change our Motorola headers to become DOCSIS compliant. Once that happens it clearly opens the market for modems and that is a preferable solution for us. With satellite, for example, we are using a model to allow market forces to keep the prices of hardware down to the best possible level.
"There is no need for Telstra to be distributing that sort of material. Once DOCSIS comes in and there is a standard for cable as well, then it will move to the same model. It does need to be formally ratified but DOCSIS 1.0 will almost certainly be rolling out fairly quickly, and that is the standard American broadband companies are starting to adopt," she said.
"We are looking at ADSL as well and will start a very small-scale trial with about 200 customers in the next month, and we are hoping to have a product to launch within the next six to eight months. ADSL is basically a reconfigured copper line, but is far superior to ISDN which gives speeds of up to 128 kilobits per second, compared to ADSL 2 megabits per second, and that brings it within the realms of cable and satellite.
"Cost wise there are also better scales of economy than with ISDN because you are not talking about timed calls as you are with ISDN. You are dealing with traffic charges rather than usage charges. There are some limitations, just as there are with the other broadband services. The ADSL service is really dependent on the quality of the exchange and how far you are from the exchange.
"But essentially Telstra wants to be technology agnostic so any of our broadband products, particu-larly our Internet- or Web-enabled products will be able to be carried on any platform.
"I think there is now a sufficiently critical mass of narrowband users who are becoming frustrated with the World Wide Wait and who don't want to be logging on, having tremendous problems with drop out of local calls because of difficulties with their local ISP.
"These are the people who are now ready to consider an alternative service, so if we get our pricing and marketing right, we can see broadband as a reasonable migration option from narrowband," she added.
Broadband will shatter speed barrier
by IDG staff
Broadband is all about speed of access and what that speed allows you to do. In particular, it allows users to stream a variety of media, such as live Web casts, at the equivalent quality of free-to-air television.
How fast is cable? Here are some comparisons: a 150KB file would take 42 seconds to download using a 28.8K modem, 21 seconds using a 56K modem and less than half a second using cable.
An 8MB file takes 42 minutes using 28.8Kbps, 18 minutes for 56Kbps and 22 seconds for cable, and a 32MB file will take 2 hours and 28 minutes on 28.8Kbps, 1 hour 16 minutes on 56Kbps and 11 minutes using cable.
Broadband is a distant elephant stampede that corporate Web site managers had better start preparing for. And don't think it's just about transmission speed.
If you're running a site today, you should know that the persistent connections that come with broadband will be at least as important as raw throughput. Both DSL and the competing cable modem technologies allow full-time, dedicated connections to the Web. And, boy, will consumers like that once they get a taste of it.
Corporate Web managers need look no further than their own offices to imagine how a jump in residential broadband use will raise the bar for them in terms of performance, security, site design and content freshness. Managers already can see employees on the phone, hearing about a Web site (perhaps a potential business partner) and, midcall, hitting that site courtesy of a T1 data line. Response has to be quick and clean.
Now picture your consumer at home, watching TV and yacking on the phone with Uncle Charlie when he gets the inspiration to check out your latest widget - and the one offered by your competitor. Again, no need to break the conversation; the broadband connection is always there.
You're right, DSL and cable modems haven't had a huge impact on either the consumer or business sectors, and the phone and cable companies are probably being overly optimistic if they say tens of millions of consumers will move to broadband by year's end. Service providers expect to greatly widen DSL and cable modem access in the coming months, but a recent report by research group Infobeads in the US shows that more than 60 per cent of Web users don't plan to move to broadband in the next year.
However, even if it takes a little longer and slightly fewer than expected consumers upgrade, broadband is coming. And the consumer-to-business relationship will never be the same because of it.
Now you have to ask yourself if your site is ready for this demanding, easily spoiled, easily turned-off consumer. Do you need to be ready by the end of this year? Probably not.
By the end of next year? Well, there's a darn good chance.
Cable modem wave to hit Europe
by Terho Uimonen
European cable television operators are speeding up the rollout of data and Internet access services, resulting in exponential growth in the number of cable modem users throughout Western Europe, according to new research from International Data Corporation. As a result, revenues from cable modem shipments are expected to increase from a mere $US33 million in 1998 to almost $550 million in 2003, the market researcher said.
The Benelux region, where cable TV reaches 90 per cent of households, Austria and France are among the current leaders in rolling out data over cable services, said Richard Mol, Amsterdam-based senior analyst with IDC's European Datacommunications research program.
Major European markets such as the UK and Germany are now also expected to come up to speed over the next few months and 2000, he added.
"The UK is obviously a major market, and we expect to see rapid growth in cable modem usage as operators there have already started to upgrade their networks," said Mol.
In Germany, the cable modem market is expected to get a boost now that incumbent telecommunications and dominant cable TV provider Deutsche Telekom AG has to divest its cable interests, he added.
Cable modem sales are also beginning to pick up in Sweden after cable provider StjärnTV last month dramatically dropped the prices for its Internet-over-cable service. Existing customers now only need to fork out a $US60.40 signing fee, which includes a network adapter card and software, followed by a $40 monthly fee for unlimited surfing at speeds of up to 500K bits per second. The rental for the cable modem is included in the price.
"This is typical for the kind of scenarios we will see around Europe," said IDC's Mol. Demand among users will also grow rapidly due to increased use of new media-rich applications, and as a result next-generation cable modems must also provide higher bandwidths, IDC said.
The cable modem industry, however, also has to ensure that modems become standards-based, or at least upgradeable to a standard specification, IDC said, since this will result in lower costs and enable retail distribution.
Sirius embracing emerging technologies
Australian modem maker Sirius is keeping a close eye on the latest Internet, intranet, broadband technologies, according to managing director David Stewart.
Stewart said Sirius' policy is to begin developing these products but only release them when they become worldwide standards.
According to Stewart: "Until recently, Sirius perceived cable as being proprietary. But now the technology is moving towards an international standard, we will be looking at bringing out a product.
"We also see the high-end modem technology role for DSL, and believe there is more likelihood that when standards are introduced in Australia, there will be a rapid take-up of this technology. We see the speed and bandwidth of DSL being especially appropriate for modem-sharing in commercial situations, though the SOHO market will not be far behind."
Sirius already has a number of ISDN communications products on the market.what's new from . . . TelstraTo connect to Big Pond Advance's broadband cable service you will require a Pentium powered PC running Windows 95, 98 or NT4.0 or PowerMac running OS 8 with Open Transport TCP/IP v1.1 or later. You will need 16MB of RAM to run under Windows 95 or 98 or 24MB to run under Windows NT or on the PowerMac.
The Big Pond connection kit costs $540 and comes with Motorola CyberSURFR wave modem, installation software including Microsoft Internet Explorer and Big Pond Advance Installation Guide. You also need an Ethernet card and a connection to Foxtel. Telstra will sell you a 3Com Ethernet card for between $99 and $149, and then there is the additional $125 cost of connecting to the cable service.
Subscription charges range from $65 a month for 100MB plus 35 cents per additional megabyte, to $200 a month, which includes paying off the modem and connection fee, and a 500MB a month allowance. Additional downloads are charged at 28 cents a megabyte.
1800 804 282
what's new from . . . 3Com
THE 3Com U.S. Robotics Cable Modem CMX is simple to install, easy to use and supports raw throughput of up to 38Mbps downstream and up to 10Mbps upstream. The modem is based on the same size and stackable design as 3Com's popular OfficeConnect family of networking equipment for consumers and small-to-medium sized businesses.
The new cable modem also supports Windows, Macintosh and UNIX computers through a standard Ethernet interface. Based on 3Com's own media access control technology and silicon, the 3Com U.S. Robotics Cable Modem CMX is designed for interoperability with other DOCSIS-based systems and forthcoming industry standards. RRP $550.
(02) 9937 5000