| BUSINESSWEEK ONLINE : MARCH 15, 1999 ISSUE | ||||||||
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HSA: Cable-Modem Access for the Countryside The Kentucky town of Maysville may not leap to mind as being on the front lines of the broadband revolution. But an upstart Denver company is bringing this hamlet of 5,000 a high-speed Internet access service that many big-city folk haven't yet begun to sample. About 80% of cable subscribers live in or near densely populated cities -- the lifeblood of cable-modem services from Time Warner Inc.'s Road Runner and At Home Corp. But High Speed Access Corp. is targeting a market of 30 million homes in far-flung communities of less than 100,000, like Eau Claire, Wis., and Monument, Colo. Indeed, signing up cable operators in markets that have been too small for the big guns could be a lucrative niche for HSA. Many of the cable operators serving those areas don't have the means to invest heavily in the plant upgrades that are driving the rollout of broadband and other digital services. No problem, says HSA President Ron Pitcock. His company will come in and do everything from assisting with upgrades and installation to handling the marketing and billing. In return, HSA takes 50% to 70% of subscriber fees. "We're going to accelerate high-speed connectivity to rural areas, which are normally 5 to 10 years behind," says Pitcock, a Harley-driving Vietnam veteran who has 25 years in the cable industry. THINKING IPO? Formed only last April, HSA gained visibility last December when Microsoft Corp. co-founder and billionaire Paul G. Allen invested $20 million, for an estimated 40% stake. HSA execs are now mulling an initial public offering that could give the tiny company more capital to deploy broadband over its target market of 6,000 small cable operators, insiders say. Like Road Runner and At Home, HSA is just getting started. So far, the company has installed only about 5,000 cable modems among 1.5 million homes readied for its service. But growth is fast, and the number of HSA-affiliated cable systems could rise from 30 now to 100 by yearend, Pitcock says. A big appeal of smaller markets is the prospect of fewer competing technologies than in urban areas, where digital subscriber line, wireless, and other broadband alternatives are on the horizon. Says William D. Savoy, president of Vulcan Ventures Inc., Paul Allen's investment arm: "In second-tier markets, if you do it right, you're the only player." Technologically, that may be so. But others are eyeing HSA's turf. At Home, for one, has announced plans to provide smaller systems with a "turnkey" service similar to HSA's. And while it can cost as much as 25% more per month than Road Runner or At Home, HSA lacks the larger services' content tailored for high-speed surfing. Still, Pitcock figures Road Runner and At Home will have their hands full in the city, and HSA will be there for the little guy. By Steven V. Brull in Denver _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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