High-speed modems? Aisle 6 by the batteries

High-speed modems won't be in stores for this year's holiday season, but last week's announcement that Alcatel and Thomson Multimedia will form a joint venture to market digital subscriber line and cable modems certainly brings them closer to the shelf.

The unnamed company, to be headed by Al Arras, executive vice president of Thomson's Audio Communication Strategic Business, will be formed as a 50/50 joint venture between the two companies. The new company will market asymmetrical DSL (ADSL) and cable modems in the United States under the General Electric and possibly RCA brands. Outside the U.S. products will use the more familiar Alcatel brand.

The new company also will build and distribute a number of high-end home products including Internet screen phones that are being developed through other joint partnerships, and it will develop and market home units incorporating voice-over-IP technology.

"This is the first stage of a three stage rocket," said Olivier Houssin, executive vice president of Alcatel.

While giving both companies an avenue to the still developing retail market for high-speed Internet access devices, the venture will also allow the use of well-established brand names.

Initially, the retail push also allows carriers to subsidize modems in exchange for service commitments. "It will be done as packages and bundled, not unlike what is done with cellular phones today," said Patrick Liot, president of Alcatel's Professional and Consumer division.

Indeed, the use of more recognizable brands was expected by many and underscores the need for vendors and carriers to exploit existing names. BellSouth plans to sell packages of its high-speed access service and 3Com's modems in its BellSouth Mobility retail outlets.

"ADSL sells when you demonstrate it, and a retail environment is perfect for that," said Bob Cunha, vice president of Broadband Services for BellSouth. BellSouth has been among the more aggressive telcos in brand management with a few scattered stores selling both wireless service and its americast branded cable TV. The goal, Cunha added, is to sell high-speed services alongside both. "The more places a customer can buy a DSL modem, the easier it is for us."

Not everyone is jumping on the retail bandwagon though. Westell doesn't foresee putting its branded modems on shelves.

"We don't have the channel to go out of Best Buy or Circuit City, but we have the technology to go through carriers or maybe develop an e-commerce model for them," said a Westell spokesman.