Our customers have the option to lease a cable modem for $10 to $15 a month or
to purchase a modem for between $300 and $400. As of June 30, 1999, we offered
EarthLink Internet access to approximately 660,000 of our homes passed and have
approximately 5,800 customers.
We have a relationship with High Speed Access to offer Internet access in
some of our smaller systems. High Speed Access also provides Internet access
services to our customers under the Charter Pipeline(TM) brand name. Although
the Internet access service is provided by High Speed Access, the Internet
"domain name" of our customer's e-mail address and web site, if any, is
"Charter.net," allowing the customer to switch or expand to our other Internet
services without a change of e-mail address. High Speed Access provides three
different tiers of service to us. The base tier is similar to our arrangements
with EarthLink and At Home. The turnkey tier bears all capital, operating and
marketing costs of providing the service, and seeks to build economies of scale
in our smaller systems that we cannot efficiently build ourselves by
simultaneously contracting to provide the same services to other small
geographically contiguous systems. The third tier allows for a la carte
selection of services between the base tier and the turnkey tier. As of June 30,
1999, High Speed Access offered Internet access to approximately 670,000 of our
homes passed, and approximately 7,000 customers have signed up for the service.
During the remaining 6 months of 1999, we, jointly with High Speed Access, plan
to launch service in an additional 18 systems, covering approximately 429,500
additional homes passed. Vulcan Ventures, Inc., a company controlled by Mr.
Allen, has an equity investment in High Speed Access. See "Certain Relationships
and Related Transactions".
We also have a revenue sharing agreement with At Home, under which At Home
currently provides Internet service to customers in our systems serving Fort
Worth, University Park and Highland Park, Texas. The At Home network provides
high-speed, cable modem-based Internet access using our cable infrastructure. As
of June 30, 1999, we offered At Home Internet service to approximately 388,000
of our homes passed and had approximately 3,000 customers.
We actively market our cable modem service to businesses in each one of our
systems where we have the capability to offer such service. Our marketing
efforts are often door-to-door, and we have established a separate division
whose function is to make businesses aware that this type of Internet access is
available through us. We also provide several virtual local area networks for
municipal and educational facilities in our Los Angeles cluster including Cal
Tech, the City of Pasadena and the City of West Covina.
- TV-BASED INTERNET ACCESS. We have a non-exclusive agreement with
WorldGate to provide its TV-based e-mail and Internet access to our cable
customers. WorldGate's technology is only available to cable systems with
two-way capability. WorldGate offers easy, low-cost Internet access to customers
at connection speeds ranging up to 128 kilobits per second. For a monthly fee we
provide our customers with e-mail and Internet access that does not require the
use of a PC, an existing or additional telephone line, or any additional
equipment. Instead, the customer accesses the Internet through the set-top box,
which the customer already has on his television set, and a wireless keyboard,
that is provided with the service, which interfaces with the box. WorldGate
works on advanced analog and digital converters and, therefore, can be installed
utilizing advanced analog converters already deployed. In contrast, other
converter-based, non-PC Internet access products require a digital platform and
a digital converter prior to installation.
Customers who opt for television-based Internet access are generally
first-time users who prefer this more user-friendly interface. Of these users,
41% use WorldGate at least once a day, and 77% use it at least once a week.
Although the WorldGate service bears the WorldGate brand name, the Internet
domain name of the customers who use this service is "Charter.net". This allows
the customer to switch or expand to our other Internet services without a change
of e-mail address.