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Cable Modems In The Workplace Essay, Research Paper

Until recently, small businesses could not afford T-1 service to connect to the network. The recent advent of cable modems has provided a cheaper alternative to this problem. Cable operators have primarily targeted consumers in their initial cable modem rollouts. Multiple System Operators (MSOs) are now selling higher priced broadband Internet services to the corporate customer. The question is, does cable modem technology provide the optimum service for a medium sized company that is dependent on the Internet for data computing and research? To answer this question, we have to evaluate the price, bandwidth, and reliability in the business network.

One significant factor that separates cable modem technology from other telephone networks is its ability to share bandwidth on the network. This characteristic is both an advantage and disadvantage for cable modems. The advantage is that cable modem users have the ability to use as much bandwidth as possible when it is available. The disadvantage resides in network congestion. When the user needs the bandwidth for a large file download or upload, it is not guaranteed the bandwidth.

Lack of guaranteed bandwidth and modem reliability is the biggest concern that most companies have with cable modems. Yes, it is cheap, but can it perform? In the past, the reliability rate was 50% to 60% because of improper equipment and technology. (Schuman, Now playing:, 1999) More recently, upgrades of the cable system has allowed close to 98% cable modem reliability. Reliability is also dependent upon the number of users the cable company has hooked up to the cable node. If too many users are connected to the same node, there will be degradation in throughput. The cable company claims 30 Mbps downstream data transfer, but sharing often makes it more like 1.5 Mbps. (ZDNET, Cable Modems:, 1999) The quality cable companies like TCI, mitigates the uneasiness about reliability and questionable throughput by providing guaranteed upstream bandwidth, and excellent technical support. The reliability and congestion issues all seem to be problems of the past with the current upgrades and service quality improvements made by the cable company.

The big advantage that attracts many businesses is the low monthly fees compared to T-1 lines. A traditional T-1 line will cost at least $1,000 per month, where as TCI cable company charges $249 per month for 256 Kbps upstream connection. The cable modem prices are not as clear-cut as the cable providers make it seem. The varying selection of bandwidths, mailboxes, and number of users create a rising pricing structure. TCI’s @work cable modem service has three different pricing structures depending on the amount of users. The @work service starts out providing service to 15 users, at a cost of $249 per month for 256 Kbps upstream connections. From there it goes up to $349 per month for 512 Kbps, and $548 per month for 768 Kbps. For an additional 15 users it is an additional $100 per month. In addition to monthly fees, there is an installation charge of $500 and $25 extra for every five additional mailboxes purchased. (TCI @work, personal communication, November 16, 1999) The equipment provided includes the router and modem.

ADSL Cable Modems(TCI) T-1

Bandwidth 64 Kbps – 1.5 Mbps Upstream1.5 – 7 Mbps Downstream 256 – 768 Kbps Upstream30 Mbps Downstream 1.544 Mbps

Price $20 – $200 per month$150 Installation $500-$1,000 per PC for Hardware $249-$548 per month$500 Installation $10-30$ per PC for Hardware $1,000-$1,500 per month

Asymmetrical Digital Subscriber Line (ADSL) technology is a new technology that is competing with the cable modem industry. ADSL is important to discuss, because it attracts many of the small business companies looking for a cheap modem service. ADSL is capable of between 1.6 and 8 megabits per second downstream and up to 640 Kbps upstream, ADSL can be combined with the impending new wave of PCs using the 400-Kbps Universal Serial Bus and related input technologies for high-speed remote access that begins to resemble LAN-like speeds. The advantage of ADSL is the existing phone lines that already coexist in the business infrastructure, making it easy to receive and install. Unlike the cable modem service, ADSL does not have to share bandwidth with other users. For this reason ADSL is more attractive to business users.

Taking the company’s scenario of 50 – 60 users and the need for reliable and fast data transfer, it would be advantageous to use the 512 Kbps cable modem service. The company needs to purchase an additional 45 user accounts at a cost of $300 per month, plus additional mailboxes at $25 for every five users. The total monthly cost equates to $649 a month with an initial startup cost of $725, which does not include the cost of the Ethernet components. When compared to a T-1 line at $1,000 per month the cost difference is still significant enough to justify the use of cable modem. It is also, important to point out that the cost calculations are only applicable to this size of a company, where as a larger size company would have higher costs. This is why cable modem technology is only feasible for the small and medium sized companies.

When looking at the big picture it is evident that low costs, high bandwidth, and technological advances in cable modem technology represent a good investment then ever before to implement into small and medium sized companies. The existing coaxial cable infrastructure, coupled with its already large customer base, has positioned cable modems well in the business market that seeks to move data and information at high speeds. The past problems of congestion and unreliability are being eliminated with the new advancements and adjustments made to the cable companies. While cable modem technology has made the great leaps into the business environment, ADSL technology still has the edge in terms of price and guaranteed bandwidth. Therefore, cable modem technology cannot compare with ADSL in terms of reliability, price, and guaranteed bandwidth. Until the time comes when all the kinks have been worked out with the technology, it is safer to wait on the investment.

Ameritech (1999). Basic ADSL Information. Available: http://www.ameritech.com/navigation/site/1,1935,233,00.html. (11.10.99).

Cable Modems Net (1999). Small Business Solutions. Available: http://www.cable-modem.net/pi/business_solutions.html. (11.12.99).

Kinetic Strategies, Inc. (1999). Cable Modem Market Stats & Projections. Available: http://www.cabledatacomnews.com/cmic/cmic16.html. (11.09.99).

Kinetic Strategies, Inc. (1999). Overview of Cable Modem Technology and Services. http://www.cabledatacomnews.com/cmic/cmic1.html. (11.09.99).

Schuman, Evan (1999). Now Playing: Cable Modems. Available: http://www.internetweek.com/062496/616spec.htm. (11.17.99).

Rist, Oliver (1999). Several High Speed Alternatives to Cable Modems. Available: http://www.internetwk.com/062496/616srsb.htm. (11.15.99)

ZD Net (1999). Cable Modems Vs. ADSL Modems. Available: http://www.zdnet.com/pccomp/features/excl0698/crossroads/cable-child.html. (11.12.99).


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