@Home ramps up retail strategy

High-speed Internet service provider @Home Network is teaming up with retail vendors such as CompUSA to ramp up the rollout of cable modem service in select areas, the companies said today.

@Home Network will sell an installation kit at 25 CompUSA and other stores in geographical areas where @Home's service is offered. The merchandising program will be expanded to additional computer, consumer electronics, and office supply stores in the coming months as @Home moves to boost its subscriber ranks.

The news follows the pairing of MediaOne broadband Internet service provider with retailer Circuit City to sell proprietary cable modems and an installation kit to customers in Massachusetts and New Hampshire in 17 stores. The initial retail price for the cable modem is $199, with cutomers receiving a lower service price in exchange for paying the cost of the modem.

In the @Home deal, consumers visiting the stores will be able to view a live demonstration of the service, which provides an Internet connection that's roughly 100 times faster than the 28.8 dial-up modems prevalent today, and call a local provider to see if the service is available to their home.

The installation kit, which will retail for $39.95, includes demonstration CD-ROMs and money-back coupons for service and installation fees.

Previously, promotion of the @Home service was left to local cable operators. With increased customer traffic at retail stores viewing the service, the retail merchandising program should spur new subscriptions.

"Better than half the customers that can see the service and try it, buy it," Paul Salzinger, director of business development for @Home, said.

Retailers could get a boost in sales as well. According to @Home research, 52 percent of its users upgrade systems once they have the service. Also, retailers receive some profit off sales of the boxed software.

The push to show cable modem service in retail locations is a precursor to the emergence of a market where consumers will purchase cable modems off retail shelves, when the so-called DOCSIS (Data Over Cable Service Interface Specifications) industry standard modems become available.

DOCSIS-compliant modems could be purchased by consumers and used with any service provider's equipment. At the moment, some stores in limited areas of the United States carry cable modems for sale, but generally they can be used only with an ISP in that region.

A standards-based modem guarantees consumers that any one product is interoperable with similar products on the market and with equipment used at the service provider's site. The benefit for cable companies is that they can move away from having to keep proprietary modems in inventory and on their balance sheets.

Salzinger said some of the cable operators using its network will move to DOCSIS modems beginning in the fourth quarter, with widescale rollouts not beginning until 1999.