News

Time Warner, Comcast Rev Up Data

8/01/2004 8:00 PM Eastern

The cable industry’s two largest MSOs, Comcast Corp. and Time Warner Cable, both introduced new higher-speed service levels within their broadband data packages last week, launching a tiered-service option for gamers and others who crave bandwidth.

Time Warner Cable is rolling out a cable-modem service at speeds of 6 Megabits per second downstream and 512 Kilobits per second upstream, priced between $64.95 and $84.95 per month, depending on the other services within a subscriber’s video and voice bundles.

That’s twice the speed Time Warner offers in its $44.95-per-month high-speed service.

Comcast launched a 4 Mbps downstream service that will be priced at $52.95 a month, $10 more than its standard 3 Mbps package.

Not to be outdone, overbuilder RCN Corp. announced its 3 Mbps and 5 Mbps data services would be accelerated to 5 and 7 Mbps, respectively, without any price increase.

“This new Road Runner option should be perfectly suited to gamers and other Internet customers needing an even speedier connection,” said Time Warner Cable senior vice president of high-speed data Gregg DiPaolo, who added that most customers likely would be satisfied with current speed levels.

“We do not anticipate a significant migration to the premium option,” he said.

ONE SIZE DOESN’T FIT ALL

Still, there will be some subscribers interested in revving up.

“As we expand the number of broadband customers, we are seeing a range of user habits,” he said. “One size in the high-speed data business no longer fits everyone.”

Video and data customers will pay $69.95 a month for the higher-speed service, while triple play subscribers (who also take voice) would pay $64.95.

Time Warner Cable said most of its operating divisions will launch the service next month.

The rollout comes after Time Warner completed a four-market test: subscribers in Rochester, N.Y.; Cincinnati and Columbus, Ohio; and San Antonio, Texas; were all eligible to receive the higher-speed service.

Based on that test, DiPaolo estimated that between 5% and 8% of Road Runner subscribers would be interested in upgrading to the higher-speed product.

“We do have some learnings from the initial test divisions,” he said. Gamers and customers with an affinity towards home networks and technology in general are the best candidates.

“We will use a variety of means” to market the higher-level service, he said, noting the MSO has seen good close rates on telemarketing. Potential subscribers will also receive e-mail.

The premium level service also will be incorporated into general marketing messages, but Time Warner customer-service representatives will start their top-down selling pitch with new customers with the lower-speed data product. CSRs will pitch the higher-speed service when, in the course of a phone call, they find a consumer might want the higher-level service, he said.

Road Runner continues to expand the broadband content on its home page. It offers a games channel and DiPaolo said “we hope to offer more and more robust games.”

The downstream and upstream rate caps are determined by a configuration file fetched by the cable modem from the MSO’s network during the cable-modem boot-up sequence. When a customer signs up for a premium tier, they are provisioned in the billing system with a code that gives them the configuration file for the higher-tier service. The modem- configuration file then regulates the maximum downstream and upstream speed.

COMCAST EXPANDS OFFERINGS

In its announcement, Comcast said the new service was ideal for streaming audio, multiplayer and online gaming, downloading large files and home networking. Comcast offers a home-networking package at both its traditional 3 Mbps and the new 4 Mbps service levels.

The MSO said the new service has been available to subscribers in Baltimore, Boston, Chicago, Philadelphia and Washington, D.C. It will be launched in the rest of Comcast’s high-speed markets by September.

Comcast also said it was increasing the storage capacity for each email account from 10 Mbps to 250 Mbps. Each Comcast high-speed account can have up to seven e-mail addresses.

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