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Comcast Speeds Up & Slows Down

Jeff Baumgartner
9/18/2007
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Comcast Corp. (Nasdaq: CMCSA, CMCSK) is developing a sub-1-Mbit/s service targeted at Internet newbies, according to the MSO's chairman and CEO, Brian Roberts. That slower-than-usual service stands in contrast to Comcast's upcoming Docsis 3.0-based Internet service that's set to compete with fiber-fed telco services.

Roberts, speaking Monday morning at the Merrill Lynch Media and Entertainment conference in Marina Del Ray, Calif., reiterated that Comcast plans to begin launching Docsis 3.0 starting next year, offering shared downstream Internet speeds in excess of 200 Mbit/s. In May, at its investor day, the company disclosed plans to begin trialing the new platform sometime this year. (See Comcast Preps Docsis 3.0 Trials.)

A Comcast spokeswoman said the company is not yet releasing more specific timing on the rollout or where the operator might first launch 3.0-based services.

Depending on the competitive makeup of the market, Comcast today offers a high-end Docsis tier that caps the downstream at 8 Mbit/s or 16 Mbit/s.

"We see a roadmap to [offering] the most competitive high-speed product," Roberts said.

"We believe the specs are set -- manufacturers are building it," he said of the 3.0 platform. CableLabs is slated to begin its first official Docsis 3.0 tests on modems and headend gear next month. (See CableLabs Preps for Docsis 3.0 Tests .)

But he also acknowledged that Comcast will have to find capacity to support Docsis 3.0, which calls for equipment to handle a minimum of four bonded upstream and downstream channels. Roberts suggested that Comcast has the ability to start off with a product that bonds two or three channels.

To lure in users new to the Internet or those that are price-sensitive or migrating from dialup, Comcast is considering a "low-speed tier" that's in the range of 750 kbit/s. The MSO is "testing it as we speak," he said.

Roberts asserted that such offerings, coupled with a continued migration of DSL customers, will help the MSO maintain high-speed growth, this despite a slowdown in the second quarter that affected MSOs and telcos alike. (See Report: Broadband to Rebound in Q3.)

Roberts also pointed to Comcast's budding service lineup for small- and mid-sized businesses as a future growth engine, estimating it represents a $12 billion to $15 billion opportunity in the MSO's footprint. He said the goal is to grab 20 percent of that market in five to seven years.

Comcast, which has hired more than 500 people so far to sell the business product, will back the effort with an eight-line digital voice phone, expected out in 2008. Today, Comcast's SMB offering is limited to two-line phone equipment.

Roberts and Landel Hobbs, the COO of Time Warner Cable Inc. (NYSE: TWC), who presented later in the morning, both vaguely referred to a CableLabs project that aims to bring a common, cable industry-wide backoffice infrastructure for interactive advertising, considered another potential growth engine.

"Interactive advertising is one of our major goals," Roberts said, likening the "aggregation effect" of the project to Google (Nasdaq: GOOG) and its Internet search system.

In 2008, the cable industry will show "some highly visible national tests" related to the interactive ad project, Hobbs added.

— Jeff Baumgartner, Site Editor, Cable Digital News

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