Cable Modem

Uploaded: Tuesday, October 24, 2000, 8:30 a.m.

Cable modem service in limbo
ISP Channel's contract for Internet up in the air

by Jennifer Kavanaugh

Last week's news that Internet provider ISP Channel will overhaul its business leaves the question of future service uncertain for about 3,000 cable-modem users in the Palo Alto area in the coming months.

The ISP Channel's parent company, SoftNet Systems Inc., announced on Friday that the high-speed Internet service was laying off a third of its staff nationwide and restructuring the business to lower operating costs and improve revenues.

SoftNet and ISP officials said the changes won't affect customer service or technical support. But as part of the restructuring, the ISP Channel is reexamining its agreements with local contractors that wire the high-speed service into homes and businesses. ISP's contract with AT&T Broadband ends in April 2001, and the company said it doesn't know whether the contract will be renewed.

"I wouldn't be able to predict that," said Gloria Parrish, SoftNet's director of corporate communications.

SoftNet said the ISP Channel, which typically contracts out maintenance and installation to independent contractors, needs to adjust to a market that is reducing the number of those contractors through buyouts and mergers.

The announcement comes after three weeks of technical problems involving ISP service in Palo Alto. During that time, customers experienced problems getting access to the Internet or had abnormally slow connections. The problems angered customers and led to disagreements over who was responsible for the problems: the ISP Channel, AT&T or the Cable Co-op, which sold the local cable system earlier this year.

Mark Heyer, the ISP Channel's director of customer communications, said ISP and AT&T technicians have been working together on the problems that have plagued the system this month.

"We certainly intend to keep working with AT&T to improve the service," Heyer said.

It's unclear at this point if AT&T wants to renew its contract with the ISP Channel, or whether it would bring its own Internet service or that of another company into its system. When AT&T bought the system from Cable Co-op this year, it promised to replace the older, coaxial cable system with fiber-optic lines within three years. AT&T did not return phone calls for this story.

Some ISP customers, frustrated with the problems they have had this month, have called on the city of Palo Alto to open up its fiber-optic cable loop to mainstream use, allowing private companies to lease space on the system and compete for Palo Alto customers. City officials said they are examining the economic feasibility of doing that, and a business plan for the system is due out sometime next month.

Colin Mick, an ISP Channel customer, said it wouldn't be the end of the world if the ISP Channel service left Palo Alto, given the demand for Internet service here.

"The service ISP provides is fairly transparent for most people," Mick said. "If they go away, another service will come in."