Though Excite@Home Corp.'s demise sent many big MSOs scrambling to provision high-speed-data customers, some smaller operators have found success going it alone or with a partnership strategy.
WEHCO Video Systems, an Arkansas-based operator that serves 110,000 subscribers in about 10 communities, has rolled out Cablelynx high-speed data service to 3,500 customers through a partnership with NetworkIP of Longview, Texas — which is coincidentally home to a WEHCO cable system.
After surveying , High Speed Access Corp. and ISP Channel, WEHCO chose NetworkIP to help it to get its data service off the ground in late 2000. A year later, the move looks pretty smart, given that the two partners are the only ones still in business.
WEHCO refurbished its cable plant for data use, bought Cisco Systems Inc. routers and handled marketing chores. NetworkIP took on provisioning, billing, the cable-modem termination systems, network-operation center and help-desk functions, as well as Internet-backbone contracts.
"They had the expertise and infrastructure and back office, which we needed," said WEHCO executive vice president and CEO Paul Morbeck.
"It was important for us wanted to maintain our relationship with the customer and not be dependent on a third party for our success," he said. "We wanted to very much do it ourselves and we mutually decided we'd try to make this thing work. NetworkIP and us invented this from the ground up."
WEHCO is another leg in NetworkIP's revenue stool. The company, which generated $153 million in revenue last year, functions as an application-service provider.
"We have three main areas: prepaid Internet cards, cable provisioning and stored-value services," said NetworkIP CEO Pete Pattullo. "I have 350 million user accounts and 2 million billing items a day."
For instance, telephone or cable companies can sell prepaid NetworkIP Internet-access cards to consumers. "Cable can have a travel product for the cable modem," he said.
A customer could conceivably take a laptop on the road, buy a prepaid Internet card from NetworkIP worth five or 10 hours of service, then use their Cablelynx account's electronic-mail address to conduct business on the road via NetworkIP's contracted Internet backbone.
"If AT&T had that product, they wouldn't have had the problems when Excite went dark," Pattullo said.
About 60 percent of WEHCO's cable-modem subscribers provision their own service using NetworkIP software. Once a consumer decides to either buy a modem or pick one up from a cable office, they take the unit home, plug it in, insert a CD-ROM and begin the process.
Users are taken to WEHCO's cable-modem Internet home page (www.cablelynx.com
), where they can select a service level.
They may subscribe to a basic service, which offers 512 kilobyte-per-second download speeds and 256 kbps upload speeds, for $54.95 on a month-to-month basis. They may also pay $44.95 per month for a year-long commitment. Prices include the modem.
Subscribers can double those download and upload speeds for $74.95 month-to-month, or pay $64.95 a month for the full year. A commercial service plan with 1.5 megabit download speeds and 1.0 megabit upload speeds is available for $119.95 month-to-month or $99.95 for a full-year commitment.
The user types in his or her name, address, service level, credit card number and account number, and can be up and running in 10 minutes, Pattullo said.
The provisioning process queries the Cisco UBR router at the headend, gives it an Internet-protocol address and downloads the configuration screen to set up the account, said Morbeck. NetworkIP also connects with the new customer's credit card company to establish the billing account.
Morbeck said customers who can't self-provision, and thus require a truck roll, usually need cable jacks moved to another location or have other inside wiring needs.
"Self-provisioning is great, but it does not eliminate every single truck roll," Morbeck said. "But I'll tell you, it's a huge advantage."
NetworkIP develops its own cable provisioning software. WEHCO purchased UBR routers from Cisco and is using modems from several manufacturers, including Toshiba Corp. and Motorola Inc.
WEHCO finished rebuilding parts of its system, and hopes to increase its high-speed penetration in 2002.
"Data is a sale that's very much considered," Morbeck said. "Subscribers think about it for a while. It requires quite a bit more marketing than we originally intended.
"But after they buy it, they love it. Very few people have disconnected the service."
Commercial business has also been strong, Morbeck added. Business customers need a static IP address, he said, and WEHCO can provide domains that reflect the company's name, as opposed to the general cablelynx.com electronic-mail domain used for residential customers.
In addition to small mom-and-pop stores, municipalities have expressed interest in getting wired via cable, said Morbeck.
WEHCO is also thinking about offering VoIP service through NetworkIP, he said. "Their initial backbone is an ATM [asynchronous transfer mode] circuit," he said. "We're very interested in doing that."
Morbeck envisions a situation in which a relative may be visiting a WEHCO subscriber for several weeks over a holiday. That consumer could dial into their modem service, sign up for a second phone line, on the fly, and configure service for just one month, he said.
IP telephony is just one of several applications Pattullo foresees for cable operators.
"Their initial focus was to get cable modems out and get all the easy hanging fruit," he said. "Now it's, 'How else can I make some revenue on this?' "