IVI Drops Price of Modem Service

Author:
Publish date:

Los Angeles-based Internet Ventures Inc. last week dropped
the cost of its PeRKInet Internet access service to $29.95 per month.

IVI president Don Janke predicted that cable modem service
could reach a mass market relatively quickly if cable operators and their Internet service
providers across the country followed IVI's lead in lowering the price of high-speed
service.

"If others adopt this price, maybe you can sell these
cable modems at retail," he said.

Janke said that high-speed cable modems represent an
evolution -- not a revolution -- over the speed found on 56 kilobit per second modems that
many consumers use today.

"If this is an evolutionary product, it can't
double or triple in price from what's out there today," he said.

But the speed of IVI's Internet product is
considerably slower than what most larger cable operators are offering.

IVI's cable and wireless cable affiliates had been
charging "north of $50" per month, on average, for the high-speed service, which
incorporates a 256 kbps downstream throughput and a slower telephone return upstream,
Janke said.

Cable modems are at least 20 times faster than that, both
downsteam and upstream, due to larger operators' two-way networks. Most smaller
operators who buy turnkey services, such as PeRKInet and its competitors, cannot afford to
upgrade to two-way.

Of the new pricing structure, Janke insisted, "This is
not a loss leader. In our economic model, we're able to price at $29.95 and make
money."

The company named several cable and wireless cable
operators that have signed agreements for current or future PeRKInet service: Avenue TV
Cable in Ventura, Calif.; Cox Cable Humboldt of Humboldt County, Calif.; Davis
Communications in Deer Park, Wash.; Sun Country Cable in Groveland, Calif.; and American
Telecasting of Medford in Medford, Ore.

With the PeRKInet service, IVI supplies cable operators
with free hardware for subscribers. IVI uses cable modems from the financially struggling
Hybrid Networks Inc. Janke said Hybrid has fulfilled all its orders from IVI to date.

IVI plans to work with its cable and wireless affiliates to
offer free modem installation and setup for a limited time. The company also offers
customer service support to cable operators and ISPs who field Internet-related phone
calls from their subscribers.

In addition to PeRKInet, IVI provides dial-up Internet
access in the Western U.S. Although the company has explored some ventures in East Coast
markets, Janke said, its focus now is on "ex-urban markets" of 20,000 to 200,000
households in 11 Western states.

Janke said that IVI's goal is to own the underlying
ISPs in the markets it serves.

Related