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Cablers Gear for Tiers To Mix Data Services

The old joke about early Ford automobiles was that you could have any color — as long as it was black.

The same might have been true in the past for single-size cable-modem services.

But as cable operators move into a mass market and continue battling their digital subscriber line foes, they are delving increasingly into tiered data services to hit a wider target audience.

The latest to take a step into tiering is Insight Communications Co., which soft-launched a new higher-speed Plus May 12 in all but one of its cable-modem markets.

Packs a punch

Insight offers a connection at 3 Megabits per second downstream and 384 Kilobits per second upstream for $79.95 per month.

With a boost in upload and download speed (compared to its original service at 1.5 Mbps up, 256 Kbps down), the Plus product is aimed at gamers and home-office customers, according to Jim Stewart, Insight's senior vice president of high-speed Internet services.

The 384 Kbps upstream speed "gives it that extra punch for gamers and people that want to ship larger files back and forth, possibly from their office to their home," he said. "There is more of a demand for it, but download is still the name of the game.

"People want to download larger files and certainly more music, more videos. The place where that upstream capacity comes into play is, I think, really more in the gaming area."

The only market where the new tier won't be introduced is in Columbus, Ohio, where Insight co-markets Road Runner service with Time Warner Cable.

The operator is also looking at future additions to data tiers, but for now that does not include a lower speed offering.

"I don't think that we are ready to take that next step, because we have got a lot going on," said Gloria Bushelman, Insight's director of high-speed access. "It's not that we are not going to offer a lower tier at some point, but just not right now."

Comcast moves

Insight isn't the only MSO widening the data net. Comcast Corp. is consolidating its higher-tier data offering, now that it has taken over the former AT&T Broadband territories. It has a pilot home-networking tier up and running in nine markets.

Before the merger, AT&T and Comcast had rolled higher-tier data offerings, and now the work will be to unify under the Comcast offering and pricing. The $95 Comcast Pro package offers speeds of 3.5 Mbps downstream and 384 Kbps upstream, plus equipment and installation. The original data offering provides a connection at 1.5 Mbps downstream, and 256 Kbps upstream connection for $42.95 ($45.95 with a leased modem).

In nine markets, Comcast has a pilot project offering a $65.95 home-networking package that offers 2.5 Mbps down, 256 Kbps up, including a combination modem and router, installation, parental controls and a hard firewall.

Creating a home-networking tier is something of a departure compared to other cable operators. But it reflects the fact networking is indeed a service, said Suzanne McFadden, senior director of marketing for Comcast High-Speed Internet.

"The way we look at it is, this is not just a bolt-on," she said. "We believe it is not just about attaching equipment. It's really a model in which we hand-hold the customer."

The increased speed for the home networking product also better suits the main consumer target — the multi-PC family.

"Things like gaming devices — like Xbox Live, where you really want that performance speed factor — multiple PC households tend to have children in them," said Abigail Caspar, director of national marketing and product management for Comcast High-Speed Internet.

Low tier dashed

The pilot markets have been encouraging enough that Comcast is now working on rolling out the home-networking service to the rest of its cable modem markets, McFadden said.

On the other side, the former AT&T Broadband had been dabbling with a 75 Kbps symmetric low-speed tier, but that has been discontinued. And don't look for it to resurrect any time soon.

"Obviously we look at customer needs and customer segments, and right now what we're hearing is customers are looking more up level from where we are — looking at things like home networking," McFadden said.

While the trend among other cablers is to shy away from a lower-speed data tier, one MSO that has embraced the concept is Charter Communications Inc. It also has more experience than most, with tiered offerings stretching back some three years.

Charter's products include from a Gold Pipeline service at 1.5 Megabits per second downstream and 128 Kilobits per second upstream; a midrange Silver package with a 768 Kbps downstream, 128 Kbps upstream connection; and a budget Bronze service with a 256 Kbps down, 128 Kbps up connection. Prices vary from market to market, but service is generally offered at $40 to $45 for Gold, $35 to $40 for Silver and $30 to $35 for Bronze.

Offering the lower tier has drawn customers who are not as enamored with the zippy speeds as they are the always-on connection, according to Kip Simonson, Charter's vice president of sales and marketing.

"We believe we are seeing consumers that wouldn't have considered a $40 high-speed Internet because they don't use it often enough to make that kind of expense jump are interested in going five or 10 dollars from what they are paying for their dial-up to gain the always on and some more speed."