Combination of elements

Another holiday shopping season brings another opportunity to wonder what is keeping data over cable service interface specification cable modems out of retail stores.

In parts of Connecticut and Long Island, the answer is, nothing.

At the end of October, cable operator Cablevision began a program in two Connecticut and six Long Island locations that will replace its proprietary rented modems with DOCSIS-compliant ones from 3Com, bought in retail electronics stores that Cablevision owns through a sister company, The Wiz.

Keeping sales in the corporate family helps solve many problems that have barred modems from the retail shelves so far. For one, chains have objected to multiple systems operators (MSOs) pricing their modems too high - usually around $300.

The DOCSIS-compliant 3Com modem Cablevision sells at The Wiz costs $299. But in a special holiday promotion, customers who sign a contract for two years of Cablevision's high-speed cable Internet service, Optimum Online, can get a $200 rebate. The monthly Internet service is $39.95, or $29.95 for customers who already subscribe to Cablevision's video service.

While the offer is too new to track statistically, the rebate and the bundling have made the offer a success in the eight Wiz locations, said Patricia Falese, Cablevision's senior vice president of retail business. "We're not seeing any price resistance," she said. "The modems are moving at a volume above our expectations."

Another obstacle to widespread retail modem sales is deciding which customers have DOCSIS Internet available in their neighborhoods. The problem is most complex for large regional or national chains that cover territories with many MSOs.

But The Wiz's 41 stores match Cablevision's New York-area footprint closely. With that in mind, the MSO opted to train Wiz sales associates to qualify customers the minute they express interest in buying a DOCSIS modem.

"As the customer comes into the store and enters into the sales process, they are asked where they live and are qualified immediately," Falese said. Selected Wiz sales associates are trained on the modem and on the qualification process. Once the sale is made, they direct customers to Cablevision employees that work in a "store within a store" in all DOCSIS modem Wiz locations. These workers ensure customers are properly provisioned with Optimum Online and address questions.

The corporate relationship with The Wiz means Cablevision can bring its sales associates to train alongside The Wiz salespeople in the qualification process. It's low-tech but effective, and Falese said it even helps with employee retention at the retail chain.

Another traditional obstacle to retail sales of cable modems has been the question of installation and customer care - as in, who's responsible? Along with modem supplier 3Com, Cablevision has developed a self-installation package that can realistically offer modem buyers the chance to bring one home and go online immediately. Again, it begins with training: Salespeople are taught how to ask questions to determine customers' computer configurations and find out if they are likely to have a network interface card or a universal serial bus. They then can offer customers a $150 self-installation package with the required software, an installation video and a manual that combines information about the modem, the online service and their computer.

Cablevision will roll a truck for a variety of services, from a full installation to simply adding a new cable outlet. But about 90% of Cablevision's modem customers at The Wiz opt for the self-installation package, said spokeswoman for Cablevision.

"It's as big a selling point for Optimum Online as the price and the speed of the service," Falese said. "Customers can go home that night, install a cable modem and be online with an assigned e-mail address on the very night they went shopping."

Using its retail synergies to roll cable Internet is a shrewd move that should lock in market share for Cablevision. "Their suburban tri-state market is not ground zero for competitors - yet," said Kevin Trager, an analyst with Vision Consulting. "But Cablevision will meet with competition someday soon. This is a smart pre-emptive move to seize some territory and raise the barrier to would-be competitors in either cable Internet or DSL."