Ellacoya proposes premium Internet services using broadband

Ellacoya Networks thinks there’s a broadband Internet migratory path that parallels the one followed years ago when the cable industry moved from retransmitting broadcast signals to developing and delivering its own programming.

The Merrimack, N.H., company, backed with $86 million in start-up funding, has developed what it calls the Premium Services Delivery System (PSDS) that packages premium service bundles targeted to cable subscriber demographics with technology to deliver those services on a fee-based subscription basis.

“You need a mechanism, an infrastructure, which Ellacoya provides, to start introducing these subscription services and to start thinking about tiering your Internet service,” said Cathy Gadecki, Ellacoya’s vice president of strategy.

Ellacoya, Gadecki added, sees premium Internet as the next step for cable operators after subscribers get used to the high-speed, always-on connectivity that comes with broadband.

“The opportunity for cable operators is to offer on-net subscription services, on-net content and applications,” she said, pointing to entertainment, gaming and music services as initial opportunities.

Ellacoya delivers this through an integrated hardware and software platform that combines microflow management and tracking service generation, the company said. It advances the broadband experience the way HBO, Showtime and CNN advanced the cable viewing experience.

Broadband subscribers “start with faster service and always-on. Once they’re hooked, they … think about using this connection to do other things. That’s when you think about migrating them up this service-tier path and looking at offering subscription services on an optional basis,” she concluded.

For starters, Ellacoya’s technology is aimed at cable modems, but the company has been “talking to some set-top vendors” about incorporating it into next-generation boxes that deliver Web content over the TV.