Profitable Internet in Small Cable Systems

Profitable Internet in Small Cable Systems

There seems to be general industry agreement that broadband Internet services represent the greatest new revenue source since the three decade old introduction of Pay TV while presenting the cable subscriber a clear and favorable distinction between DBS and the local cable TV services. Systems that have introduced high-speed Internet services report increased revenues, decreased “churn” and Basic subscriber “lift”. For those systems fortunate enough to be able to purchase high-speed Internet services from the telephone company or long distance carrier, the business model is overwhelmingly convincing in favor of the introduction of Internet services in the local cable system. Conversely, there also exist large numbers of cable systems that either cannot contract for or cannot “affordable” high-speed Internet in their communities.

These cable systems are typically serving rural communities with three hundred or less subscribers. The business model becomes increasingly unjustifiable as the size of the cable system decreases below the 300 subscriber level to the point at which an Internet service offering by the cable operator simply cannot be economically justified with conventional telco high fixed priced Internet services. Unfortunately, as long as a cable operator must depend upon the high fixed costs of an Internet service from the phone company, the introduction of high-speed Internet into small systems will be a significant financial challenge.

The Foundation Telecommunications, Inc. (“FTI”), Internet service costs are billed and paid on a “per subscriber” basis irrespective of the data rate contracted. Use of technologies such as satellite Internet would allow maximum information rates (“MIR”) of 2, 4 or 6 mbps to the cable headend rather then the more conventional 1.536 mbps of the standard telephone company T1 channel. The basic choice of the cable operator becomes to either pay $6 per month per subscriber for a 2 mbps satellite Internet signal at the cable headend or to pay $650 per month whether there is one subscriber or twenty subscribers connected to the cable Internet service.

Unlike previous attempts by other companies to use satellite technology for the delivery of Internet or other broadband data or television services (HITS), innovative approaches to Uplink Power Control (“UPC”) and Internet acceleration have resulted in near “fiber levels of availability” and much faster data rates than conventional telco provided T1s.

Nearly all satellite based Ku and Ka-band Internet systems utilize some form of Uplink Power Control (“UPC”) that automatically increases the uplink power from the end user location (cable headend) to the Internet backbone in order to overcome weather related losses of signal. If local weather interrupts the signal to the remote site, the critical data required to control the uplink transmitter is lost resulting in a total loss of service until the signal from the Internet to the remote site can be restored. The FTI approach to this problem has resulted in significantly increased availability and immunity from localized weather.

The second historically characteristic element of satellite delivered Internet services relates to “latency”. This factor involves the time delay associated with a round trip signal from a user’s computer to the Internet and back again. Although it cannot be totally eliminated, latency can be mitigated through the FTI application of sophisticated Internet acceleration techniques.

In 2002, the FTI satellite delivered Internet service adopted a system architecture that utilized C band satellites for the signal from the Internet to the cable headend. As C band, only the most severe weather affects the outroute signal that both provides the Internet service and the control signals for the uplink power control. C band is immune from nearly all weather related anomalies due to its lower frequency band and is ideal for this application. With the C band control signal uninterrupted to the cable headend, the Ku band Internet return signal can be transmitted and controlled resulting in optimum use of the Uplink Power Control feature.

The new FTI satellite Internet service incorporates the latest Internet acceleration chip sets providing the lowest possible latency of any satellite transmission with the highest possible reliability.

The Foundation Telecommunications, Inc. satellite Internet service contracts are based solely upon the numbers of Internet customers rather than contracted data rates thus ensuring operating profits with the first cable Internet subscriber connected rather than the guaranteed losses associated with high fixed telephone company rates. Rural cable operators are now able to purchase high-speed Internet services with fiber levels of availability on a per subscriber basis AND at higher data rates than those offered by the telephone companies.

This innovative satellite Internet service is available from Foundation Telecommunications, Inc. today.