Internet Access Provider Cable Television's Business Plan (1997)

By Joseph P. Duggan, Senior Vice President, Waller Capital Corporation

The cable television industry has a history of conceptualizing, creating and offering innovative programming to entertain and inform its subscribers. From it's earliest days as a reception medium through satellite delivered programming, pay-per-view and interactive gaming, the industry has developed new technologies and risked significant capital. The latest and most innovative form of ''programming" is available on the Internet. Cable television's challenge is to deliver this new ''programming" through a competitively priced, superior Internet access product by leveraging off it's superior bandwidth. The deployment of Internet access over cable television systems represents a substantial opportunity for creating a new revenue stream using existing infrastructure. This will also create a strategic advantage for cable companies as they are threatened by new competitors for the basic video product. The Internet represents access to the largest library of information in existence. The merging of the cable television industry and the Internet (which heretofore had been associated with the computer industry), is based on the premise that the Internet is rapidly becoming a multimedia environment. Historically, information on the Internet consisted primarily of simple text. Today, the Internet is shifting to an increased dependence on very1 graphically rich content which takes an interminable amount of time to download using standard telephone dial-up modems. Internet users are demanding higher access speeds to reduce the amount of time that is consumed simply waiting for information. This shift in the composition of Internet related content has created an opportunity for broadband providers (cable) with superior speed over narrowband (dialup) providers. This paper offers a layman's introduction to the Internet, defines the business opportunity available to an Internet Service Provider ('1SP'') and constructs a basic business plan for a cable television company in the Internet access business.

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