[rescue] Boy, am I glad I didn't switch to Cable modem service...

[David Passmore]

On Sat, Dec 01, 2001 at 09:53:53AM -0500, Kurt Huhn wrote:
> 
> Technical - not Financial dept I hope :)

I'm a systems architect for products like mail and news.

> Perhaps you can provide us all with some insight?  Like, is the threat of
> @home ceasing services to cable companies real and palpable?  What have
> *you* been told?  Or have they told you nothing as well?

<RANT>

Yes. You have to understand, this is @Home's one and only chance to survive
this as an independent entity. The company can't keep going only making $13
a pop off of each subscriber. We need a larger share of the revenue pie.
That revenue division was originally put in place to help the cable
companies upgrade their networks to hybrid fibre-coax (a one time
investment), but that time has long since passed and they have refused to
change the contracts, even when they're up for renewal. In as much as a
corporation can be a 'bad guy' the cable companies are being the bad guys
here-- we own everything, including the backbone, regional connectivity, and
services (email, news, DHCP, proxies, etc) up to the cable headend, which is
right in your own neighborhood. We also do the customer support, from Tier 1
up to Tier 5-- very few cable companies do their own Tier 1. The cable
companies own only the last mile-- literally. Oh, they get to bill you too.
Losing some, or even most of that revenue will not hurt their cash flow
position other than taking away some excess revenue. We *need* more than 30%
of customer revenue just to break even. But they've been milking this
relationship for all its worth, and will continue to do so until the bitter
end. It's pretty sad, really. I can't say @Home is blameless for letting
itself get into this position, but this whole thing could end *right now* if
the cable companies would stop being greedy and revise the revenue sharing.

Those of you who may end up being transitioned to other networks-- if @Home
does not survive this, or if your cable company transitions you anyway,
switch to another medium. It's taken us 6 years to get this right (serving
always-on ethernet-speed consumers is an engineering feat in many ways) and
although the cable companies have stolen much of our technology from
'inspecting' our operations dozens of times, don't expect them to get it
right for a while.

</RANT>

David