The most interesting speech at the Forrester New Media and Forum conference in New York last week came last.
It came from Excite@Home President George Bell. Bell is under some political pressure these days, on the broadband side of his business.
America Online is pushing every political button it can find to gain access to @Home’s broadband network. Portland, Oregon and other municipalities are fighting to win “open access” to the cable for rival ISPs. Meanwhile, telephone companies have settled on standards for a rival technology, Digital Subscriber Line (DSL), which is now growing faster than cable modems.
Bell gets through it by talking fast and talking positively. What he said often about broadband didn’t jibe with facts as I’ve been given to understand them. But I’m not accusing George Bell of lying — not at all. I may be wrong in some cases, we have different opinions in others, and Bell was just being optimistic in others.
My point is that Bell’s talk jibed precisely with everything else I’ve gotten from the company over the years — a ton of releases, a ton of chatter, and never an admission of anything. It’s the same thing we get from so many politicians.
Bell was asked directly whether there should be open access to AT&T cable for @Home rivals. “There is open access from a content perspective,” he said. “The only thing that’s exclusive is the access.” Notice how he changed the subject there so he could give the answer the questioner wanted — fascinating.
Fortunately, his questioner wasn’t buying it, and pressed him. “If the government came in and waved a wand to make it open, the cable companies would stop investing, because they’d be uncertain of a return. Then they’d have to work with us to find a way to run a shared line technology — customer service degrades with use. It would take a year or two to learn. Also, prices would be higher, because having invested, someone has to pay. Those $40/month subscriptions would go higher.”
Imagine that, I thought. Without a monopoly they’ll let capital lay fallow. Rather than go into wholesale as well as retail, they’ll sit on the market. Does Wall Street know this?
Bell was next asked about the apparent advantages of DSL. He said @Home is adding both fiber backbones and new T-1 lines within its network to scale for demand.
He then added this. “It’s true that at places you see fluctuation based on demand or usage. But one or two consumptive users running out of their home shouldn’t be using the residential service. We sell them a higher speed solution, at work. They pay more money but the performance goes back up.”
In other words, you have a high-speed connection but if you actually use it, he’ll find out and demand you pay more for it. Do customers know this?
It’s when Bell addressed DSL directly that he lost me completely. “The further you get from a node, a mile or more, you have a sharp degrading of the signal. Their issues haven’t been handled. Our issues have been.”
That’s just not true. DSL’s new G.Lite standard delivers 1.5 Mbps downloads and 384 Kbps uploads reliably over five miles from a switch. The equipment is standardized, so it can go into the retail channel, and it’s easy to install.
“DSL takes 4 1/2 hours to install. Cable takes 1 1/2 hours to install,” said Bell. Again, that’s only true if you ignore G.Lite.
Let me repeat that George Bell didn’t lie. He just gave his side of the story. These are not the kinds of questions you argue with a company’s president about. They’re assertions you test in the market. It’s yet another reason why I prefer covering business to politics.