by March 31, 1999 0 comments

A dial-up connect to the Internet gives you 33.6
kbps, and a long wait while the page you want to see downloads. ISDN makes that 64 or even
128 kbps, but is not available outside the metros. Leased lines cost the earth and beyond.
Does that mean that we are destined forever to endure the World Wide Wait?

There are a number of technologies that are being touted as
a solution to this question. There are the XDSLs–ADSL, BDSL, HDSL, SDSL, and so on.
And there are cable modems. DSL technology aims at getting higher bandwidths on the
existing telephone cable. But it’s still in its infancy, and given the state of our
telephone system, looks like a distant dream. That leaves us with cable modems. They
don’t use the telephone system, at least the latest version doesn’t, and
that’s why cable modems could succeed in India.

Let’s take a look at how cable modem network works and
how to set one up.

As you probably know by this time, cable modems use the
cable networks set up by cable TV operators to connect you to the Internet. In theory, the
setup is very simple.

A TV cable is divided into multiple channels. Some of these
carry the TV signals. If you can convert your Internet data into RF signal, then the TV
cable can carry it in your homes and workplaces. The cable modem at your end isolates the
Internet data and converts it back into computer-readable data.

Originally, cable modems were one-way devices. So, the user
had to use a regular modem and telephone line in conjunction with the cable modem.
Downstream content will come through the cable, while upstream information, the links you
clicked on, the e-mail that you are sending out, etc, traveled along the telephone line to
the cable service provider. The user had to thus pay for telephone connect time, as well
as the cable service, and the service provider had to set up both cable and telephone
connects to the Net. On the plus side, the service provider had absolutely no changes to
make on the cable network.

The next logical step was to integrate the upstream
communication also into the cable modem. This did away completely with the need to have
parallel telephony infrastructure. But you also have to make some modifications to the
cable network to achieve this. You have to set up amplifiers along the network. As the
name suggests, these amplify signals passing along the cable so that there is no loss of
data at the farther ends of the network. Typically, these are one-way amplifiers. That is,
they can amplify signals in the downstream direction, but not in the upstream direction.
If you are using two way (called RF return) cable modems, then you’ve to replace all
the amplifiers on the network with two-way amplifiers. At the user’s end, you use
cable splitters to split the incoming cable into two. One goes to your TV while the other
connects to the cable modem. From the cable modem, you use Ethernet cable as in any
computer network to connect to your computer. And the computer sees it as a network
connection.There’s a significant amount of noise that the network
picks up from the environment—TV sets, air conditioners, etc, in the houses and
offices. And as it comes upstream, passing through the amplifiers, the noise also gets
amplified. This noise doesn’t contribute to useful bandwidth. This is one of the
reasons why upstream bandwidths are lower than downstream bandwidths. Traditionally, more
upstream channels are provided in a system than there are downstream channels.

One downstream channel can, depending on the technology
being used, be 27 Mbps or 38 Mbps. Corresponding upstream bandwidths are either 5 Mbps or
10 Mbps per channel. And a given cable can carry multiple channels. That gives you an idea
of the amazing amount of bandwidth that the cable network can offer for Internet

Let’s now look at the economics of the setup.
Traditional Internet connectivity over telephone lines entail two types of costs: the cost
of the telephone service, be it local dial-up or leased line, and the connect charges that
you pay to the ISP. In case of cable modems and the cable network, the ISP-connect-charges
remain, as the cable service provider has to pay for this at his end. But the telephony
charges are not there.

Cable modems are instant on devices. That is, they connect
you to the Internet the moment you switch them on. And it’s likely that they’ll
be left on more often than otherwise. Given the high bandwidths and the instant-on nature
of the service, it’s likely that cable modem service providers will charge you on the
basis of volume of data transmitted than the time you stay connected.

Let’s take the case of a minimalist-cable ISP, having
a single channel of 38 Mbps. Let’s assume that he contracts with users to provide
them with 128 kbps assured bandwidth, equivalent to the ISDN. That means he can
simultaneously provide 38×1024/128 = 304 connections. Traditionally, ISPs have a
port-to-subscriber ratio of 1:10. That is, one modem at their server for every 10
subscribers they have. In the case of high bandwidth usage, this ratio will be lower. The
actual ratio will depend on the nature of the subscribers. For example, if the subscribers
are all offices, then all of them are likely to be on, at least, during the daytime. On
the other hand, enterprising service providers could work out a mix of home and office
subscribers, which could improve network usage across the day as well as the bottom line.

Given the high costs, it’s likely in the Indian
scenario that more offices than homes will go in for cable modems, till prices drop
substantially. At a conservative 1:3 port-to-subscriber ratio, the service provider would
be able to service 900 subscribers. The server side equipment for this would cost
approximately Rs 4,000,000. At the user end, the cost is of the modem which currently is
around Rs 24,000, pretty steep for individual usage, but compares favorably to an ISDN

Assuming the same access charges as with any other ISP,
it’s the telephony charges associated with traditional (ISDN/leased line) access that
the cable service provider will have to offset. Since we started off comparing with ISDN,
let’s carry the comparison forward against ISDN. A 128 kbps ISDN account (500 hours)
with MTNL costs Rs 32,300. For the ISDN calls you make to the ISP, you pay normal call
rates subject to a minimum of Rs 5,000 per month. So the question facing the potential
cable modem operator is whether he can provide the service at equal or lesser cost and
still make a profit. Of course, enterprising souls could try to set up shops in areas
where ISDN is not available and where the need exists, like say, Ahmedabad or Pune or
Mangalore or any of the hundreds of other similar Indian cities. The question is whether
he would be able to get the requisite bandwidth from VSNL or another ISP in his area of

Another enterprising use of cable modems would be to offer
WAN services. Companies with offices spread over a city would then get an easy solution to
get their LANs connected across the city, into one WAN. More than the costs, the sheer
convenience of the setup would have many signing up. The only question is who’ll take
up the gauntlet to set the ball rolling by providing the initial investment?

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