Study: Cable Modems Top 1M in North America

More than 1 million [M] households in North America now have cable-modem service, and researcher Kinetic Strategies Inc. expects that number to reach 1.6 million [M] by year's end.

The Phoenix-based broadband research firm tallied subscriber lists from seven major vendors in the cable-modem market and also added to the total those who subscribe with other, less well known service providers. About 70 percent of North American cable modem users are in the U.S., with the rest in Canada.

"You hate to completely pat yourself on the back, but our initial projection earlier this year was that it would hit 1 million [M] in July," Kinetic's president, Michael Harris, said today of the new figures found in the new survey.

Cable-modem service is now available to some 32 million [M] North American households, or about one-third of all cable subscribers, Kinetic found. The researcher publishes Cable Datacom News, which tracks the cable-modem market.

Cable modems link computers to broadband cable lines over which Internet and communications services are then offered. Cable companies have been able to quickly deploy cable modems to provide broadband access compared to broadband services offered by telecommunications providers, Harris said.

Cable companies -- some of which are now owned by telecommunications giants such as AT&T Corp. -- have been aggressive in rolling out and pricing cable-modem service, Harris said. A typical cost for cable-modem service is US$39.95 monthly, including the fee for renting the cable modem. That compares favorably with the cost of Internet access and a separate phone line for online use.

Thus far, cable modems themselves have been primarily proprietary, rented to users by cable companies, but development of a standard for the devices will lead to more of them on the retail market, Harris said. During the next six to 12 months, he said, the number of North American households that have access to cable-modem service will rise rapidly, reaching close to 50 percent of cable television subscribers.

Although a great deal of attention has focused lately on the volatile issue of whether cable companies should be forced to open access to their broadband networks to competitors, Harris said he does not think that debate will lead consumers to delay signing up for cable-modem service.

"Consumers are demanding faster access, and cable companies are there with a solution," he said.

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