Putting a user-friendly face on cable modems

So cable-modem makers and cable companies are taking a new approach to solving this problem. They're beginning to sell user-friendly modems directly to consumers, just as they sell traditional modems. 3Com Corp. (Nasdaq:COMS) announced Monday the availability of a consumer-targeted cable modem, which will be promoted for use with the cable-access services of Tele-Communications Inc. (Nasdaq:TCOMA)

Other makers of cable modems are also expected to begin offering the technology in stores and even pre-installed in new PCs.

The retail availability of cable modems gives consumers the option of bypassing the arduous installation process and setting the hardware up themselves.

Industry analysts say that could boost the technology's spread, and help it compete against DSL (Digital Subscriber Line), the high-speed access system offered by the telephone companies.

Until now, cable modems were designed to be installed by engineers. "The service itself is what makes it difficult to install ... it is not as simple as hooking up an analog modem," said analyst Rob Enderle, with Giga Information Group.

"But if it is going to become more widespread, it should be a lot easier," he added.

3Com's U.S. Robotics Cable Modem CMX takes advantage of a new standard allowing it to work with hardware from other manufacturers. The device retails for $319.99 from retail outlets such as Staples, Best Buy and CompUSA.

Not for everyone
Not just anyone can use a cable modem, however. Your neighborhood has to be hooked up to a cable modem service, and such service is limited, although expanding.

The modem delivers information at up to 100 times the speed of standard analog modems, 3Com said.

"We think users need to be educated about the value of the cable connection... the thrill of accessing the Internet 100 times faster than before," said 3Com Vice President William Markey. "It's like paying off your mortgage in three months, or graduating from college in less than a week."

TCI said it sees the retail modems as an experiment to learn more about customer preferences. In particular, it hopes to increase its services' appeal to small or home offices.

"We are looking to get more aggressive with commercial service, both SOHO [small office/home office] and larger commercial offerings," said TCI VP Susan Marshall. "This is the jumping-off point to features like IP telephony and videoconferencing services as well."

She called the move from leasing to retail a "pretty significant paradigm shift."

Modem mayhem
Presently, most cable modems and DSL adapters are rented along with the price of cable-access or DSL service, and must be installed by a technician, the way cable TV is hooked up. The installation is usually complicated and time-consuming.

The difficult setup procedure is often cited as one of the reasons for the sluggish adoption of ISDN, a 15-year-old high-speed access technology.

While the new user-installed modem would still require inspection by a technician, the process should be much more efficient, industry observers said.

"3Com has a history of developing intuitive, user-friendly products," said Enderle.

3Com's use of the new Data Over Cable Service Interface Specification (DOCSIS) standard is also an important factor; previously, modems would only work with technology from the same manufacturer. Modem makers such as Sony Corp., Samsung Electronics Co. Ltd. and a handful of others are also using the standard.

Consumers will probably continue renting their access equipment as well as buying it, however, since that's what they're used to doing when signing up for services such as cable TV, observers said.

The race is on
Cable access providers, which deliver data over cable-television lines, are competing for customers and attention with the DSL technology of the Baby Bells, which uses traditional copper wiring.

Both sides can only deliver their next-generation services to a few scattered areas across the country at present, and face substantial costs in upgrading their networks before they will be able to reach a larger public.