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Analyst: Beware Junk Spectrum

4/30/2000 8:00 PM Eastern

Analyst Howard Postley of Pricewaterhouse-Coopers' Technology, Info-Com and Entertainment group warned that getting Data Over Cable Service Interface Specification 1.1 modems out the door won't address all cable operators' data-service needs.

For one thing, cable modems still use "junk spectrum" that is unsuitable for TV distribution, he said.

"Top speed is not going to be the issue, as opposed to always-on," Postley said. "Cable modems will go slower and slower because the system is simply not optimized for them. Cable modems occupy a bad spot in the spectrum-below 50 megahertz on a lot of early deployed 750-MHz digital plants, where lot of noise is encountered."

Postley credited cable-modem vendors for achieving the speed they have gotten so far, given the operating environment. But he contended that any effort to portray the evolving DOCSIS-based data-distribution network as a shared network that is somehow immune to contention-based problems is a bit misleading.

"All networks are contention-based," he said. "They have contention somewhere. Operators of systems where cable-modem performance is poor cannot simply attribute that poor performance to congestion on the Internet."

Postley also said caps or rate limits masks the real issue: How will operators that derive the bulk of their revenues from TV or video traffic convince video-content providers to maintain that relationship when much of that same content is also being delivered on the Internet?

"There is much more to this than an unfulfilled promise or a theoretical 1-megabit-per-second service operating at 500 kilobits per second," he said. "How is the cable industry going to compete with 7-mbps [digital-subscriber-line service], for example?"

He added, "Look at all the talk or speculation about Excite@Home Corp. preparing to bypass the cable infrastructure altogether. Cable modems constitute a robust market, but will it continue to be robust in the face of ever-increasing pressure from the cable system itself?"

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