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While the incumbent cable companies are moving grudgingly toward an era of multiple cable modem ISPs riding their pipes, many of their new competitors and non-traditional providers also are making plans to open their ISP doors-and many with more enthusiasm.
Michael Steinkirchner, a spokesman for new builder Wide Open West, says the company's name just about sums up its philosophy on open access. "It really is the foundation of our company-we believe it makes a lot of sense from a business perspective," he says.
WOW expects to complete the first part of its cable network passing 800,000 homes in the 13 Denver metro communities this spring and will start signing up customers in March. It also has announced franchise approval in Dallas-Fort Worth. Steinkirchner says the open access philosophy has helped WOW win franchise approval.
"Not only is it a big part of our business plan, but it is a part of the franchise approval process," he says. "It's important to these communities and it is important to us."
Even though these networks are still under construction, WOW already is forging deals with several Internet service providers to ride the new pipe-the first inked deal was with Denver-based Front Range Internet. Steinkirchner says WOW will charge a monthly $20 to $25 wholesale rate per customer to the ISPs, along with some other interconnection fees.
"We've been talking to many ISPs and the interest level is high," Steinkirchner says. "I think they know that things will evolve from dial-up and people will want high-speed connections, so they will have to go to that."
Having a brand new cable system is also an advantage for WOW in an open access era. The company has signed an agreement with Convergys Corp. to provide a multiple-ISP billing management platform. "The beauty of everything here is the ability to start from scratch and build it like we want," Steinkirchner says. "It really isn't a technical issue for us."
While it hasn't begun any technical tests, fellow competitive cable provider Seren Innovations Inc. is studying options for allowing multiple ISPs on its networks in St. Cloud, Minn., and in Contra Costa County, Calif., according to Laurie Derechin, vice president of sales, marketing and products.
"Obviously we have been following the area of open access for quite some time now, but we've been thinking about it more seriously in the past six months," she says. "We are looking at it as an opportunity, but we have to make sure we address a number of issues."
Among these issues are technical integration, pricing, business relationships, profitability, and ultimately, what role Seren should play in the process, she says. "And I put this last but it is not in the least-how are consumer needs met and how, indeed, can they be enhanced?" Derechin asks.
Once some of these items are dealt with, Seren may indeed see some initial testing, though there is no set time for that. "Trials would not be out of the question going forward," Derechin says.
RCN Corp. is similarly working on creating an open access environment and is "just in initial discussions with the ISPs," according to Richard Rioboli, vice president of technology and market development.
With relatively new, high-capacity network, RCN is interested in filling up its dark fiber with a wholesale strategy, and that includes selling access to ISPs. But the company is also mindful to learn some lessons from the provisioning-cursed digital subscriber line market.
"My concern is I see what has happened with the DSL business. What we want to be sure to do is get a process in place to allow other ISPs to efficiently use the network," Rioboli says. "In my opinion that is going to be the biggest challenge - getting those interfaces between the companies and trying to make it paperless and efficient."
Another operator now eyeing a multiple ISP future is High Speed Access Corp., a broadband middleman for a gaggle of primarily mid- to small-sized cable systems, providing design/build services and acting as the exclusive ISP. In operating the third-largest cable modem service, HSA faces as many opportunities as challenges, according to president and CEO Dan O'Brien.
"As the markets open up, since we are the third largest, that means a lot of the homes we don't have access to because of the exclusive agreements potentially become available," he says. "So we see that actually in a managed access environment as being better for us than the larger ISP who already has today's dominant market share. So I think we have a lot more to gain than lose."
Littleton, Colo.-based HSA has been testing multiple ISP access systems in its labs, and O'Brien thinks the company will start closing in on a provisioning system by the end of the year. In 2002, multiple-ISP systems will begin to evolve in selected markets, but it will depend on the physical capacity in the systems, he says.
Even if multiple ISPs do ride the pipe, O'Brien doesn't think cable operators should be forced to give all ISPs equal access to their systems. "If one's view of open access is that any Tom, Dick or Harry ISP can go to a cable operator and say 'I want on,' then I don't think there is going to be any open access," O'Brien says. "I think there is a practical reality to the number of providers that a cable provider is going to be able to accommodate."
And in some cases, O'Brien also argues multiple ISPs will never make sense. "Ultimately, if you look at really small markets, and I'll say under 25,000 homes passed, that you really have to go in and run the financials and say, 'Is there profitability for more than one provider there because of the relatively small base that you have to amortize fixed cost over and in the smaller markets the substantially greater connectivity cost?'"
So he sees the market likely evolving toward managed access, where the number of ISPs is dictated by the size and potential revenue in the market.
One thing all of the operators agree upon is moving toward multiple access will take some time and a lot of planning.
"You can't just say 'open access'-boom-today," Derechin says.
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