By his own admission, Joel Aaseby is an impatient man.
“If I have to wait a minute or two, I’ll go do something else. Life,” he says, “is too short.”
Which is one reason why Aaseby, an executive in the fast-food franchise business, is part of a small but growing cadre of Americans who will no longer endure the dial tone, beeps and assorted technological grunts and grinds associated with garden-variety Internet service providers.
Aaseby, who lives in Elmhurst, is using his cable television connection to do more than watch TV: He’s using it as a cyber-autobahn to the Internet.
Offering lightning-fast connections to the Net, services like MediaOne Express–which the cable service launched in June in selected western suburbs–are redefining the Internet experience for those who just can’t wait any longer.
It is all about speed. Cable lines can feed 10 million bits of data to a computer every second, compared with about 56,000 bits per second over the fastest phone modem. No more mind-numbing, piece-by-piece construction of visual images and interminable file downloads–this service acts more like television than a computer.
“Since the speed has increased exponentially versus what it was when I was on a dialup, I now spend more time on the Internet. But it’s more productive time. This has really opened up a whole new set of opportunities,” Aaseby said.
This is music to the ears of cable operators, who see high-speed Internet access at $40 or so a month as an economic silver bullet, doing for the cable industry what the fax did for phone companies.
“It is finally beginning to click in these communities,” said Scott Calloway, the regional director of broadband data services for MediaOne Express. About 2,000 households in 10 suburban communities have signed up for the service, he said. By the end of this year, Calloway expects 8,000 to 10,000 subscribers, reaching another 10 to 15 suburban communities of the 80 MediaOne serves.
But MediaOne and other cable operators do not want consumer expectations to exceed the industry’s ability to deliver.
The national growth in cable modem hookups to the Internet has been explosive. During the final three months of 1997, the numbers almost doubled, to nearly 107,000 hookups in the U.S., from 55,000, according to Arlen Communications Inc. of Bethesda, Md. This, however, is still a tiny percentage of the millions of households now on-line.
High-speed access is a potential economic motherlode for cable operators, analysts say, if they don’t get carried away with marketing pitches and promise a service that they cannot maintain technically. Cable companies find themselves in the awkward position of making sure they don’t make too much of a good thing–at least not yet. They dare not dangle it before too many potential customers unless they are prepared to deliver right now.
“Sometimes if you grow too fast, you can look pretty foolish in the process,” Calloway said.
The cable industry has ballyhooed high-speed Internet access for nearly two years, and many operators have failed to deliver on the promises they made. They underestimated the amount of expensive equipment needed to handle demand, creating bottlenecks in service that resembled America Online’s traffic jam nightmare of late 1996 and early 1997. Because of high costs and time demands required to hook up communities, cable companies simply are not ready for high-speed access to hit the big time.
Calloway said he is confident MediaOne will be able to handle the growth projections, but he is cautious enough not to say for sure when and where expansion will take place this year in the Chicago area.
Dick Day, corporate vice president and general manager of the markets division at Motorola Inc.’s Multimedia Group, said a “big education process” needs to occur before high-speed access hits the high-speed marketing lane. Motorola produces the cable modems that go into the homes, as well as the communications routers for the cable plant.
“This is the wrong year for us to be launching huge national awareness campaigns,” Day said. “Consumers are impatient. They hear things and they don’t want to wait for it.
“Remember, people were frustrated in the early 1980s when they heard about cellular phone service and they couldn’t get it. The same thing . . . is happening here. But by next year, we want it on everyone’s mind,” Day said.
That danger is real, said Gary Arlen, president of Arlen Communications, because consumers will come to expect the best. “One of the common theses of marketing that definitely applies in access services is the best you’ve seen is the worst you’ll accept,” Arlen said.
As more and more people venture onto the Internet and become more comfortable with it, expectations will rise. “People don’t want to spend eight hours on the Internet,” Calloway said, “but they do want eight hours of information.”
High-speed access, though, is not for everyone, not even for everyone who owns a computer and surfs the Net. At $49.95 a month–$39.95 for MediaOne cable subscribers–it may be for many people an amazing service whose cost cannot be justified in the family budget, at least not at those prices.
“Price is a barrier,” Arlen said. “Is is worth twice the price of a WorldNet or AOL connection? For some, it’s not.”
Its appeal is obvious to people like the Peruzzo family in Elmhurst. Bob Peruzzo, who works for a suburban computer company, said his family will spend anywhere from three to 11 hours a day on the computer, with the heaviest days when he is working at home. His wife uses it for e-mail, his teenage son for homework and some games.
“Everyone is just totally blown away by it. My line speeds at home are faster than at work,” Peruzzo said. “I downloaded software that took two minutes. It would have taken an hour and a quarter with my 28.8 modem.”
To Peruzzo, the additional cost is worth it. “Why would you want to pay for another phone line and still have a slow modem?” he asked.
Motorola’s Day said high-speed access is emerging as a new segment in the Internet arena. “This is not going to replace the dialup paradigm. Dialup will be the low-tier service,” Day said. “A lot of people with $1,000 computers will be very happy with dialup.”
As the service evolves, Calloway said, prices eventually will come down. There may even be dual levels of speed available, depending on customer demands. MediaOne will not turn a profit on the venture this year, but should “turn a corner in 1999.”
In the meantime, though, the cable industry will have to manage expectations. “The danger is that people will start to rely on this as an important part of their lives,” Arlen said, “and if you can’t deliver, you’ve got big trouble.”
