NEW MEDIA: SPOTLIGHT ON NTL BROADBAND - Cable operators offer a vision of high-bandwidth broadband

Cable companies provide a better broadband than BT's lines, Alasdair Reid reports.

Can broadband save cable? And if so, will cable be the making of broadband? To what extent are these questions two sides of the same new-media coin?

Enough questions already. Last week, after what seemed like an eternity in the wilderness, the cable company ntl had some good news to report. The company, which was still flirting with complete oblivion (it was technically bankrupt) a few months back, met or exceeded financial targets set when it came out of Chapter 11 proceedings - and the best of the good news came from the broadband bit of its operations.

It marginally increased its total customer base to 2.7 million subscribers and the profile of this customer base, in terms of product take-up, is changing. The increase in those using ntl for telephony was more than offset by the numbers (18,000) ditching TV services. But the numbers signing up for broadband grew from 144,000 to 661,000 and "triple-play" customers (those who subscribe to TV, telephony and broadband) represent around one-sixth of all customers.

Barclay Knapp, the chief executive of ntl, said broadband was leading the business back into sustained growth. Is he right?

Cable might just have entered a virtuous circle that will allow it to deliver on its unfulfilled promise. It's by no means a foregone conclusion, of course, and there are many in the industry who have always believed that, one way or another, broadband will effectively be driven by BT.

BT, despite a reputation for poor customer service (a heritage that seems to be the historical legacy of any company that once had a monopoly), still has a strong brand. It can still count on reasonable levels of consumer trust; it offers blanket geographical coverage and it has the corporate clout to carry out the required capital investment.

Yet it has a vastly inferior technical product. The DSL switching techniques it has to use to squeeze the required capacity out of old-fashioned telephone wires lack the speed and reliability of cable technology. And the further you are from the nearest phone exchange, the poorer the service gets.

Cable effectively is a ten-lane autobahn carrying dependable and smooth-running electric trolleys; BT, by comparison, is sending stuff down a cart track on scrambling bikes.

And, of course, all of the non-cable internet service providers have to piggyback on BT's DSL technology. So again, even though the likes of Freeserve and AOL have bigger consumer brands than ntl and its cable rival, Telewest, they still have inferior products. But success in business isn't always determined by the inherent virtues of your product, now is it?

Damian Blackden, the managing director of Universal McCann Interactive, points out that a quality product can struggle if it isn't backed by quality marketing. "And you'd have to have some doubts on that score where cable is concerned," he states. "Cable also has geographical issues too." You have to be in a cable franchise area to get cable, and cable franchise areas are clustered in and around the major conurbations.

And, in marketing terms, cable's USP is further eroded by the fact that some ISPs are punting 256k bandwidth as broadband. Most in the industry define broadband as 512k at the very least (truthfully, to get the best of streamed media, you need double that) and this sort of sharp practice can only be damaging to the long-term growth prospects of the industry.

Robert Horler, the managing director of Carat Interactive, might be slightly biased (ntl is a client) but he agrees that, in theory, cable should be the Rolls Royce of the broadband experience. Therefore, again in theory, cable should be an important part of the future of broadband. "It's the most cost-effective route to connectivity. It's quick and it's reliable," he argues.

"Broadband needs all the help it can get. We need to get to 30 or 40 per cent penetration (of UK households) to make it a true mass medium. The truth is that we're only really in the initial stages of the creation of the market, with service providers such as Freeserve and BT only beginning to promote their broadband product more than their narrowband ones. So, yes, broadband needs cable."

According to Oftel figures, just over 50 per cent of homes with internet access have broadband - that equates to 14 per cent of all UK homes. The Government remains committed to "broadband Britain" and last week announced a new £1 billion, five-year programme of grants to broadband infrastructure companies, including BT and the cable operators.

But just how important is broadband to the advertising business anyway?

Mark Howe, the managing director of Flextech Telewest's sales operation, ids, argues that the ad industry has actually been slow to explore the potential of broadband. The real story with broadband advertising will eventually be along the lines of the much-praised (but as yet uncopied) BMW films initiative a couple of years ago. The company shot some short movies (real stars, real directors, cars travelling at unfeasibly and morally reprehensible high speeds through New York), gave them a couple of broadcast airings and then posted them on the web as the treasure at the end of viral trails.

But, whatever else they may say to the contrary, most agencies really haven't got their heads around any of that, Howe argues. "Broadband will be huge in advertising terms but many see it as just as much of a threat as an opportunity. It's true that in recession there isn't the R&D money out there. But it's the sort of thing where everyone in the industry, from the Trevor Beatties down to the planners and the media people, need to work together to make it work."

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