RealTime IT News

Explosive Cable Modem Growth Forecast

An Internet research firm Wednesday predicted an explosion in the number of residential customers receiving high-speed cable Internet services over the next eight years.

Pioneer Consulting reported that 1.5 million subscribers worldwide currently utilize cable modem Internet access, including approximately 790,000 North American users.

Pioneer estimates that by the year 2007, more than 45 million Internet connections will be made through cable modems worldwide. North America's share of the market is estimated to be just under 24 percent, or 11 million users.

"Cable operators have begun major residential deployments, thereby creating a true retail market for consumer broadband modems," said Scott Clavenna, Senior Analyst at Pioneer. "Through these relationships cable operators have an excellent opportunity to introduce advanced services at a low cost."

The residential global cable modem market will expand from its year-end 1998 of 560,000 subscribers to more than 1.5 million in 1999, then enter a period of massive expansion in consumer usage, reaching more than 45 million users by 2007.

In contrast, the business market for cable modem services remains quite limited in Pioneer's view because of a poor or non-existent relationship with cable operators.

Meanwhile, manufacturers are ramping up their efforts to serve the demand for cable modems. Motorola Inc. announced Monday that they have shipped more than 500,000 of their CyberSURFR cable modems worldwide. In addition, Motorola has shipped cable modem infrastructure to support nearly 4 million cable modem subscribers worldwide.

Anticipated growth in the cable modem market will increase current pressure being brought upon the Federal Communication Commission to intervene on behalf of ISPs and open access to cable networks. OpenNET Coalition, the recently formed lobbying group consisting of top national ISPs, will continue to press for FCC regulatory guidelines on open access to cable networks.

Charles M. Brewer, founder, chairman and chief executive officer of MindSpring Enterprises Inc., is a founding member company of the openNET Coalition. Brewer said "the core telecommunications offering of the future will be connectivity to the broadband, always on, packet switched Internet. The only economically viable way to deliver this connectivity for many years to come will be through a wire."

"If we are going to have a competitive residential market for the core telecommunications service of the future, we must have an effective way for competitive service providers to share the broadband wires that lead to homes" Brewer said.

In response the growing cable modem market, Internet Ventures looks to expand their market by petitioning local public utility commissions for leased access rights to cable networks. Don Janke, president of Internet Ventures said "leased access now becomes the only assurance that consumers will receive competitively priced broadband Internet in a timely fashion."

Internet Ventures contends that while open access requires additional FCC regulation of the cable industry, leased access is already provided for in Section 612 of the 1996 Telecommunications Act.