High-Speed Access Race Heating Up; Cable in Lead

High-speed access is almost universally acknowledged as the most important next step in the development of the Internet. Interactive capabilities, transaction time, and the ultimate resolution of digitally transmitted audio and video are all limited by the speed with which data can be sent.

According to Broadcom Corporation's chief financial officer, William Ruehle, cable companies are clearly leading the race to reduce this limitation. Speaking at a technology conference in San Francisco, Ruehle said that cable modems, currently retailing at around $300, provide the fastest access for the largest number of customers. Over 700,000 cable-modem installations were completed by the end of last year, compared to only 50,000 high-speed telephone lines.

Cable-based Internet access will grow even faster this year, Ruehle said, pointing to the recent acquisition of Tele-Communications Inc., the nation's largest cable provider, by AT&T Corporation, the nation's largest telephone company. AT&T also owns AtHome Corp., which makes cable modems. The devices will soon drop in price to around $150, further lowering the entrance requirements for top-quality Internet access.

Broadcom makes integrated circuits for both cable and telephone modems, including those for use with DSLs (digital subscriber lines). The company's revenue has increased by a factor of more than ten within two years, to $70 million in its most recent quarter. Ruehle said Broadcom is "aggressively pursuing" both the cable and telephone markets.