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Comcast Speeds Data Plans, Signs Three-Year Cisco Deal

7/23/2000 8:00 PM Eastern

Like other MSOs discovering that Internet-over-cable service attracts unexpectedly large numbers of subscribers, Comcast Corp. is moving fast to help quench the thirst for broadband data.

The top-tier MSO, with more than 7 million basic subscribers, signed a three-year deal to buy network equipment from Cisco Systems Inc. in order to facilitate accelerated rollouts of high-speed Internet access. Financial terms were not disclosed.

In its last quarterly report, Comcast raised year-end projections for Comcast@Home subscribers from 300,000 to 350,000 and said it was installing new data customers at a rate of nearly 41,000 per quarter. Comcast@Home is available in 15 markets with more than 4.2 million homes passed.

Executive vice president and chief technology officer Brad Dusto said last week, "Things are going on plan and even a bit better than planned," adding that Comcast will likely beat the 350,000-subscriber target. He said Comcast was rolling out data services in 14 additional markets, mostly midsized systems.

Also, several towns served by Comcast in northern New Jersey and near New York are taking Internet service at rates of nearly 20 percent per node.

Cisco will deliver cable-modem-termination systems, dial-access servers, wide-area-network switches and core routing equipment.

The WAN switches and core routers are destined for the Excite@Home Corp. regional data centers that serve Comcast. In March, Comcast and Cox Communications Inc. extended their relationships with Excite@Home past June 2002. At that point, Comcast will take over operation of the @Home regional data centers that serve its customers, Dusto said.

The dial-access servers are designed for use in areas where cable plant has not been fully upgraded to two-way capability, and they allow operators to send upstream data traffic through telephone lines, according to John Mattson, acting director of marketing for Cisco's cable-business unit.

Dusto said the telco-return scheme will be used in potentially a half-dozen rural systems that were rebuilt early on to one-way, 550-megahertz capacity, including Paducah, Ky.

While a little more than 60 percent of Comcast's systems are upgraded to two-way, 750-MHz capacity, more rural systems with densities that don't support full two-way upgrades will be targeted for telco-return Internet service, Dusto said.

Industrywide, telco-return approaches are "starting to come back in favor," Kinetic Strategies Inc. president Michael Harris said, particularly in situations where competitive characteristics of specific geographic markets are present, such as aggressive digital-subscriber-line campaigns by telephone companies. One example is Phoenix, where U S West has rolled out DSL aggressively against Cox.

Comcast's Cisco order is also a step down the road toward developing an Internet protocol network platform to carry voice, video and data traffic.

Dusto noted that Comcast has been testing Cisco and Telcordia Technologies Inc. IP-telephony gear in lab situations and with "friendlies" in Philadelphia and in Plainfield, N.J., using Lucent Technologies and Motorola Inc. equipment.

The trials are mainly technology trials using Data Over Cable Service Interface Specification 1.1- and PacketCable-based equipment, and they are designed "to demonstrate the technology and to push the envelope," Dusto added.

Comcast is also exploring ways to carry streaming video over IP, recognizing the huge appetite for this type of content. Streamed video may originate from the greater Internet, be cached locally on third-party servers (such as those of Exodus Communications Inc.), or be cached locally on @Home servers, as content providers such as The Independent Film Channel have done in the past.

Dusto indicated that MPEG (Moving Picture Expert Group) digital video over IP is not quite ready for primetime, and that Comcast is focusing on streaming video for its IP platform.

The Comcast deal solidifies Cisco's strong market position for CMTS systems. Harris pointed out that "Cisco has thoroughly dominated the DOCSIS 1.0 market."

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