Profits, not promises

Sat, 06/30/2001 - 8:00pm
Roger Brown, Editorial Director, Broadband

The real system “smarts” will reside within the network itself
Roger Brown
Editorial Director, Broadband

Much to the chagrin of the company's executives, AT&T Broadband was again the center of attention of many conversations at last month's National Cable & Telecommunications Association annual convention in Chicago. Unlike in years past, however, those discussions weren't about what the company was going to do, so much as they were about what it decided not to do.

In the weeks leading up to the convention, AT&T officials confirmed what many had already conceded–that it would not be deploying massive numbers of its well-publicized, fully featured, "thick" DCT-5000 set-tops anytime soon.

Those who have followed AT&T's (and before that, TCI's) travails to specify a supercharged set-top and roll it out to millions of subscribers were hardly surprised. After all, rumors of the 5000's demise have been circulating for months. (To be fair to Motorola, the 5000 isn't dead, but it has been retooled and was essentially re-launched at the convention.) The admission is significant, especially when compared against the environment in 1997, when TCI and eight other operators banded together and confidently announced plans to deploy up to 15 million digital set-tops of various flavors.

The plan was to build a box that would enable a suite of interactive services, including banking, shopping, Web surfing and Internet telephony. Subscribers would be treated to a "walled garden" of "recommended" services, in which various service providers and businesses would pay TCI a fee to be included.

But over the years, software integration proved problematic, and economic conditions changed dramatically. Whereas the priority had been to upgrade networks at a breakneck pace as part of a frantic land grab, investors are now focused on profits, not promises. As a result, AT&T had little choice but to roll out set-tops that worked–and that's where the DCT-2000 family came in. To date, the company has placed more than 3 million units in homes throughout the U.S.

So, what are the ramifications of the general shift to the thin approach? It slows the momentum of companies like Microsoft and RespondTV, who were creating software for the 5000 platform. Instead, companies like WorldGate and Liberate, which have bet their businesses on thin boxes, stand poised to move forward. But even Microsoft undoubtedly saw the momentum swing (hence its acquisition last year of Peach Networks, which gave it a "thin" operating system that's aimed at 2000-level set-tops).

AT&T's backpedal seems to leave Charter Communications as the sole champion of the fully featured box, despite the recent announcement that the MSO will be deploying the headend-centric ICTV service in a Michigan system. (That deal was reportedly inherited by Charter during its takeover of a Bresnan Communications system.)

For network personnel, the message is clear. Cable service providers will continue to roll out slim, economical, digital set-tops that will support only limited amounts of interactivity. As a result, the real system "smarts" will reside within the network itself. Better bone up on your IT skills to keep pace.


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