Smaller Systems Lag on Rollouts: Survey


Small and midsized cable systems are less likely to have
aggressive plans for digital video, high-speed cable modems and telephony deployments than
their metropolitan counterparts, according to a new digital-cable survey released last
week by Cahners In-Stat Group (owned by Multichannel News'parent

In-Stat principal research analyst Gerry Kaufhold said the
study was done to test the group's thesis that using expanded cable plant for
telephony and cable-modem services wasn't necessarily the best use of resources.

By using the bandwidth for digital video, Kaufhold said,
"You can see revenues there because people want that service now."

In-Stat surveyed 42 cable systems, including some owned by
top MSOs AT&T Broadband, Time Warner Cable, Comcast Corp. and Charter Communications
Inc., as well as smaller, independently owned systems.

While all systems surveyed said they planned to upgrade,
larger-city systems typically had plans to roll out new digital services within the next
12 to 24 months.

Of those surveyed, 21.4 percent expect to have no
digital-video channels within the next 12 months, and 19.4 percent expect to have none
after 24 months.

Bucking the trend: Classic Cable Inc. said last week that
it already has digital cable available in 32 systems passing 174,000 homes and 110,000
basic subscribers.

In some of its smallest systems, Classic has begun testing
a satellite-delivered digital overlay, "HITS-2-HOME," provided by
AT&T's Headend in the Sky. The operator expects to make digital available to 65
percent of its customers by the end of 2000.

In the In-Stat survey, 68.3 percent of systems currently
have no bandwidth set aside for cable-modem service. In the next 12 months, 51 percent
still expect to have no bandwidth devoted to cable-modem service. The same percentage does
not expect to devote bandwidth for high-speed data within two years.

Further down the road is telephony via cable, the study
suggested, with 97.6 percent of respondents saying they have not set aside bandwidth for
the service at their primary headend. And 88 percent said they do not expect to devote any
of their bandwidth to local telephone service within the next 24 months.

The In-Stat survey also asked operators about
high-definition television. "Most systems haven't really thought about it
yet," Kaufhold said. Another three or four systems definitely plan to roll out HDTV,
but they are looking at what programming to feature and when.

Asked about future plans for equipment suppliers, about
one-half said they would be willing to talk with new hardware vendors -- such as Pace
Micro Technology plc, Sony Corp. or Pioneer New Media Technologies Inc. -- when it comes
to digital set-top boxes, Kaufhold said.