IP telephony, floated as an interesting possibility for cable interests in industry forums at the start of this year, has quickly moved to the front burner, bringing with it a seachange in MSO thinking about voice services, and indeed, about data networking in general.
Cable companies and their affiliates involved in the delivery of data services are working closely with a variety of vendors in hopes of starting tests of various approaches to exploiting the power of packet-based voice and videoconferencing technology, starting as early as this fall. At the same time, through Cable Television Laboratories, they have begun two initiatives which could have a great bearing on their eventual ability to use the technology to deliver voice services on a mass scale.
One of these initiatives, undertaken by a CEO-level taskforce led by Time Warner Cable Chairman and CEO Joseph Collins, is attempting to put together an agreement on a national cable data backbone that would establish a common distributed computer networking architecture for delivering a wide range of services based on the advanced applications tied to Internet-protocol technology. The other initiative, focused specifically on IP telephony under the leadership of CableLabs Senior Vice President for Internet technology Jerry Bennington, is one of several special information-gathering strategic projects which are designed to help CableLabs members determine the opportunities surrounding new technologies.
"A national cable IP network would be a slam-dunk for us with respect to just about any high-speed data application you can think of," says CableLabs President Richard Green. "The (cable company) CEOs have made it clear they believe the industry really needs to take advantage of this opportunity."
As Green notes, the Internet industry, through projects undertaken by the Internet Engineering Task Force, is churning out a wide array of standardized approaches to advanced applications such as IP multicasting, videoconferencing and telephony which are best suited for implementation over privately-controlled high-speed IP networks, as opposed to the less well-equipped public Internet. "Given the state-of-the-art computer networking infrastructure that cable is building, these applications are really made to order for us," Green notes.
Indeed, recent vendor successes at improving the quality of Internet-based telephony have triggered a surge in commercial support for widescale implementation of the technology outside the cable industry in applications ranging from the integration of voice onto local area networks to the creation of commercial long distance calling infrastructures. As a result, vendors report, the market environment is right for moving to the next stage, which involves development of IP-based systems that will allow MSOs to exploit their high-speed local access and national backbone infrastructures to greatest advantage, going well beyond the range of initial applications now taking shape here and abroad.
"We expect to have cable customers using our product in trials before the year is out," says Tom Houghton, technical manager for Lucent Technology 's Internet Telephony Server SP product line. "There's a lot of R&D still to do to meet all the requirements for commercial applications over cable, but the current algorithms are sufficient for use in trials."
Cable strategists are reluctant to discuss specific plans at this point, though they widely acknowledge they are avidly investigating the possibilities. "As vendors come up with ways to make packet telephony a more useful tool, it makes sense that we would include it as an option over high-speed data connections," says James Chiddix, senior vice president of engineering and technology at Time Warner Cable. "But just how broad a usage there would be depends on a lot of things, including progress on standards."
Progress on standards, driven by growing corporate demand for packet voice options, has been considerable over the past several months. Where, a year ago, IP telephony was confined to proprietary, incompatible products with no way to interface data network calls with the public switched telephone networks, today, the latest IP telephony software products come with such interfaces, known as "server gateways," and are compliant with the IP telephony standard H.323.
Standardization of these products is now possible because H.323, once focused on videoconferencing over fairly high bandwidth feeds, has been extended to apply to voice-only applications and to high-latency environments as well, thanks to advances in compression that have made quality voice transmission possible at bit rates of 5 kilobits-per-second or less. As a result, cable operators have a tremendous range of options to choose from, where voice or videoconference add-ons to data services such as chat, e-mail or on-line games might turn out to be as popular as a pure voice service.
For example, VDOnet Corp. 's release of its VDOphone 3.0 serves as "a proof of statement" that it is now possible to bring together the multimedia and two-way communications components that can enable these types of applications, says Steve Chambers, vice president of marketing at VDOnet. "What we're saying is that the tools are here to develop content that really distinguishes broadband connections from other connections," Chambers adds.
Where previous iterations of VDOphone and VDOlive, the company's video streaming software, were tailored to work in the low-bandwidth environment of dial-up access, the latest versions are scalable from low- to broadband access levels, Chambers notes. This means that the transmission between any two Internet connections will automatically adjust to bandwidth capacity, making it possible for people on high-speed data links to see each other or view clips or live feeds in high resolution without the herky-jerky motion associated with low frame-rate transmissions, he explains.
At the same time, he adds, implementations of VDOphone 3.0 in various applications by software developers will interface with the same applications using other videophone software that is compliant with H.323.
One of the first applications combining the VDO software suites will be for call centers at a large travel concern, where people calling in over the Internet will be able to converse "face-to-face" with travel representatives and then be shown video clips of hotels and destinations, depending on their interests. "This is just one of a wide range of applications you'll be seeing involving use of call centers in conjunction with video streaming," Chambers says.
Sources also report that MediaOne Express is preparing to put the VDOnet technology to use in new content components, including a classroom-in-the-home service which allows students and teachers to talk to each other while sharing access to text and graphics material. MediaOne officials decline to discuss their new content strategies, which will be introduced in various systems as the year progresses.
As the VDOphone travel agency application suggests, the gains in voice and videoconferencing technologies also have implications for cable in on-line commerce, customer service and marketing applications. In another example of how the technologies might be used, MCI is developing Internet interfaces with its call centers that will allow people connecting to the carrier's home page to click on an icon and be connected to an operator.
"We can do least-cost, least-latency, least-hop or closest-geography routing," says Harvey Kaufman, president of MCI supplier NetSpeak Corp., which developed the Webphone, a "smart" device that supports Internet voice and video applications without use of a PC. "The plan in this environment is to take the call and give the caller the best connection or experience possible."
Such capabilities require interface of Internet connections with server gateways put in place by the commercial entity. As standards-compliant tools supplied by software developers gain wider distribution, commercial entities are likely to see the videophone/streaming connection as an important attraction in drawing Internet users to their Web sites, Kaufman says.
"There are many other benefits to companies as well," he notes. "They reduce their exposure to 800 number incoming calls and to making return calls over the public switched network, and it's much easier to get data on the caller because you're getting it through the Web site, as opposed to having to ask a lot of questions."
But, of all the applications cable might have for IP telephony, the one that remains most galvanizing is the use of the technology as a substitute for circuit switched standard phone service. The cable trials Lucent is preparing to supply would allow operators to deliver first-class quality local and long distance voice service using their own facilities end-to-end, Houghton notes. "We're seeing tremendous interest in IP telephony as a full substitute for standard voice service," he adds.
But this application, even for Lucent's highly regarded technology, represents a big leap beyond the capabilities of the system Lucent began delivering for trials in non-cable applications this past summer. Where Lucent-supplied trials by MCI, France Telecom and ICG Communications are aimed at allowing corporations to provide low-cost connections from local PBX (private branch exchange) locations to distant ones that bypass long distance networks, the planned cable trials not only will require low latency in the translation from IP to circuit switched protocols and vice versa, but will also require an automatic latency-adjustment capability to compensate for fluctuations in network performance, Houghton notes.
"We're now in the process of measuring latency in the context of how a real product performs over operating networks, and we're getting pretty good numbers," Houghton says. "It's still noticeable, but it's low enough to meet requirements for the cable trials."
Along with working to further reduce the gateway-induced latency to where it isn't noticeable at all, Lucent is making headway on the latency adjustment requirements of the cable environment, where contention for bandwidth can create wide variations in the bit rate over any user's connection. "This is a bigger challenge, but we think we can meet it," Houghton says.
Another major supplier of IP telephony products, VocalTec Communications Ltd., is promoting an alternative approach in cable that would avoid the technical and cost hurdles associated with meeting this challenge. VocalTec, in talks with @Home Network and other cable entities, hopes to build on the approach taken in a new strategy that's intended to make use of its latest advances in the dial-up domain.
In one of the most far-reaching IP telephony initiatives yet mounted by a vendor, VocalTec has established a global alliance of "Internet Telephone Service Providers" to support cut-rate long-distance calling over the Internet in conjunction with Release 5 of its Internet Phone software. The new release, with enhanced video and audio performance, will be used by an initial lineup of ITSPs serving 23 cities outside the U.S., and another eight in this country to provide long-distance PC-to-phone connections at discounts of up to 80 percent from standard connections, says Scott Wharton, product manager at VocalTec.
"We look on this as the first stage in a shift to making IP telephony a real business opportunity for service providers," Wharton says. "Involvement of the cable industry will take us to the next stage, where high-speed connectivity makes phone-to-phone call quality almost indistinguishable from circuit switched service."
The pre-cable infrastructure described by Wharton involves initiation of calls from PCs to standard telephones located anywhere in the territories served by the ITSPs, which are local Internet service providers who install VocalTec's Internet Telephony Gateway server at their points of presence. The ITG server allows packet-based calls coming into ITSP facilities to be translated to standard analog phone signals for distribution through local switches to the final destination.
Users must download the $49.95 Release 5 version of the Internet Phone client software to their PCs in order to participate. When seeking to dial a number in any of the covered cities, the user goes to the service Web site and is registered with the ITSP serving the region the user wants to call. Once registered, the user can place a call to any number in the ITSP's area for a fee that's charged against a credit card. Typical rates are 15 cents per minute to the U.K., a little more to various other European points, and 20–25 cents per minute to various Asian cities, Wharton says.
While the Internet backbone imposes some latency on the two-way connections, the latest improvements in VocalTec's system using new packet loss reconstruction algorithms and better delay handling to reduce audio delay to where it is barely noticeable in the PC-to-phone application, Wharton notes. The new VocalTec system, its first to be compatible with the H.323 Internet calling standard, also supports videophone connections for users equipped with a parallel port video camera or a video camera with a standard Windows-compatible video capture card.
VocalTec has been pitching an approach to exploiting these capabilities that would be very low cost and relatively simple for cable operators, allowing them to offer phone-to-phone long-distance connections at deep discounts using high-speed backbones that bypass the Internet backbone, Wharton says. "A backbone such as @Home's reduces end-to-end latency to 80 milliseconds, which overcomes the problem we have with phone-to-phone applications of our technology over the Internet," he adds.
In a completely packetized end-to-end voice application over cable, if the customer uses a standard phone, as would be the case for non-PC calls, the signal must be instantly converted to or from the digital IP packet format, Wharton notes. "What we're saying to operators is that you can avoid having to install costly conversion equipment at every customer site by using standard telephone links between the premises and the Internet Gateway Phone server," he says.
In this scenario, the operator would lease lines from telcos, convert voice signals to IP at the server and send them out over the high-speed data backbone for conversion back to standard voice at a server at the other end of the call. But, as Wharton acknowledges, cable operators are reluctant to embrace any service plan that would use someone else's facilities, even though those facilities might be readily available under terms of deregulation.
Nonetheless, Wharton says VocalTec's pitch has been well received. "The opportunity to move quickly into this and offer a very low-cost long-distance service is very appealing," he says.
As VocalTec's ITSP initiative suggests, ISPs represent another class of potential users of IP telephony who might find the opportunity appealing as well, offering competition to cable as it moves in this direction, notwithstanding the bandwidth limitations of the dial-up world. This is a good news/bad news scenario for cable, insofar as the industry will benefit to the extent IP telephony technology gains broad market support even though new competitors will be going after the same customer base as they, too, find ways to expand bandwidth to the end user.
One ISP that believes it has hit on a successful path to early entry is Concentric Network Inc., a nationwide ISP based in Cupertino, Calif. that is starting out in IP telephony on the enterprise side and hopes later to move into the residential market. "We're working on some partnerships (with software vendors) that we'll be announcing shortly to enable us to package and deliver video (conferencing) and voice services to our business customers," says Connie DeWitt, product line manager for voice and video services at Concentric.
Concentric has built its strategy on an ability to offer various speeds of access services, from 28.8 kilobit-per-second dial-up to dedicated T-1 (1.5 Mbps) links, in conjunction with high-speed regional and national interconnections that avoid the traditional telecommunications and Internet backbone bottlenecks. In California, where the firm has installed three "superPOPs" (points of presence) to cover the entire state, competitive local exchange carriers supply the pipes that take data off the local telephone switches and deliver it to the POPs, which are interconnected with other superPOPs as well as traditional POPs throughout the country over an ATM (asynchronous transfer mode) network.
In some respects, this model resembles the one the cable industry is attempting to fashion through cooperation on a nationwide data backbone and the various provisioning protocols and transport techniques required for end-to-end connectivity industry-wide. But while Concentric has dial-up reach to 95 percent of U.S. households and most businesses, it is taking a guarded approach to rolling out telephony services.
"We have a guaranteed latency of 150 milliseconds or less over all connections, including 28.8 dial-up, which is well below detectable latency for voice communications, so some of our (corporate) customers are implementing voice and video conferencing for internal communications on their own," DeWitt says. "But there are limits to how fast you can move in offering services, especially video conferencing, based on the way things are presently done within the corporate environment."
For example, she notes, most desktop computers are not equipped with microphones, cameras and headsets, and many LANs are not set up to support distribution of video. As a result, the first application Concentric will focus on as it rolls out IP-telephony services is one that supplants the legacy switched video conferencing systems that are connected to specific conferencing rooms within the corporate facilities.
"We're not at the general use stage within companies, but that will come," DeWitt adds.
Concentric's first voice-only IP service will target the hot market for links that bypass international toll calls. "We see a huge opportunity in the international arena because of the price differential, but we know that opportunity has a fairly short life of maybe two or three years," DeWitt says.
More important to long-term prospects is the telecommuter and small office environment, she adds. "This is the direction we're going, but not right away," she notes.
One factor holding back ISPs is the flat-rate price bind they find themselves in, DeWitt says. "You can look to Concentric for leadership in creating value-added pricing structures," she adds, declining to elaborate.
Further fueling the push into IP telephony are ISP uses of the technology to provide fax services. WorldCom Inc.'s ISP subsidiary, UUNet Technologies Inc., recently became the first ISP to promise circuit-switched quality with fax-to-fax as well as PC-to-fax or PC-to-PC capabilities on a worldwide basis. PSINet, another leading ISP, and Concentric made known their fax plans in June, and, a month earlier, Netscape Communications made available the fax-over-Internet technology of NetXchange Communications Inc. as part of its Navigator browser, meaning virtually anyone could begin sending faxes over the Internet with a simple download of client software.
But it's the strategy outlined by UUNet that marks emergence of IP faxing as an industrial-strength phenomenon. By bypassing both circuit switched networks and the hodge-podge of data links that make up the Internet backbone, UUNet will be able to deliver a low-cost, high-quality fax service to anyone who signs up with the company for an Internet connection, officials say.
"We're installing over 100 fax servers around the world using our existing infrastructure," says John Sidgmore, CEO of UUNet and vice chairman of WorldCom. "This is a major, major play for us."
IP faxing is not nearly as daunting a challenge as IP voice telephony, where the need for very low latency isochronous communications is a major barrier to widescale use. But the principle is the same when it comes to interfacing people on data links with people making connections through circuit switched lines. In both cases, servers at data network points of presence provide support for directing and translating calls back-and-forth between the data and circuit switched links, thereby eliminating the need for all participants in an IP-originated communication to be connected to the Internet.
UUNet's service also demonstrates the importance to IP telephony of data networks that avoid the bottlenecks in the Internet. By using its own data links rather than the Internet backbone, in which it shares responsibility as a provider, UUNet achieves latency levels that meet the quality of service standards for fax services, notes Allen Taffel, the ISP's vice president of marketing and business development. "Our ability to control the quality of service by avoiding peering points (Internet interconnection points) has ramifications for how quickly the fax is delivered, the reliability of the service and the overall security of the service as well," Taffel says.
Such advantages explain why the cable industry has put so high a premium on working out the business and operational issues associated with creating a ubiquitous IP data backbone. As previously reported (see the June issue, p. 116), there are major obstacles to be overcome, but so far, the commitment at the top of the industry appears to be driving MSOs toward solutions.
There's too much at stake for the industry to fail in its backbone initiative, Green says. "There's a tremendous interest in things like IP telephony where the benefits really come into focus once you have everybody connected to a universal backbone," he notes. "I think we're already seeing significant progress under Joe Collins' leadership."