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Videophones coming of age

Fri, 10/31/2003 - 7:00pm
Jeff Baumgartner, Editor

Thanks to cheaper equipment and the widespread availability of broadband, videophones are no longer just for corporate boardrooms and the well-to-do.

In fact, they are drawing ever so close to the consumer mainstream. Even influential high-tech writer Walter Mossberg touted Vialta's "BeamerTV" videophone product in a recent column. The conclusion: he liked the product. "The pictures aren't exactly 'Star Trek' quality, but they get the job done," he wrote.

And it's about time for the videophone to get the job done. In a strange way, the concept of the videophone is growing long in the tooth long before it has become a consumer-level reality.

"People don't need the videophone; they want it. They've always wanted it," says Elliot Gold, president of Telespan Publishing Corp. and an expert in the field for more than 20 years, referring to a technology that science fiction writers have placed on their pages long before it became "real." In fact, the videophone was a regular Tom Swift technology even before the AT&T Picturephone made its astonishing debut at the 1964 World's Fair in New York.

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AT&T's Picturephone of the mid-1960s contrasted a bit with a vision of the technology depicted here in a circa 1890 French publication. Photos courtesy: Electronic Cafe Intl., Kit Galloway and Sherrie Rabinowitz

To this day, one major problem has always dogged the videophone: picture quality. "It's been unacceptable," Gold says. "We're talking about consumers. When they see a TV screen, they don't think about error correction, jitter, data rates and fiber or copper. If it doesn't have the quality of television, they're not interested."

Even as the technology gained a higher profile during the Iraq war, it was marred by choppiness and audio and video that were sometimes ridiculously out of sync.

The technology's steep price has been another consumer showstopper, leaving it to the deep pockets of corporate business. The AT&T Picturephone, though providing a decent picture, required the user to purchase a 1 MHz circuit from AT&T, Gold explains. Few had the means. To wit: Playboy founder Hugh Hefner was among its early users.

More recently, corporate-grade videoconferencing systems emerged with high-quality video, but carried a price tag of $500 or $600.

Now, thanks in large part to the growing ubiquity of broadband IP, it appears that both of those troubling issues have been erased, establishing the first true window of opportunity for consumer videophone technology. That opportunity might also be extended to the primary provider of consumer broadband connections: the cable operator.

Calling all options
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Viseon has added SIP capabilities to the “VisiFone.”

There's no shortage of videophone products that use cable or DSL connections to pipe both video and sound. Among them is Viseon Inc., maker of the "self-contained" VisiFone.

The product's current bandwidth "sweet spot" is about 256 kilobits per second, offering between 25 to 30 frames per second. "We work well at 128 kbps, and even better at 512 kbps," says Viseon CEO John Harris. "Several customers have started at 128k, but upgraded to 256k when it was available."

Viseon is already forming direct trial relationships with cable operators. Charter Communications is one of several MSOs to test VisiFone's muster in the field. Other cable and DSL providers are also testing the device, in both office and home environments.

The VisiFone currently incorporates H.323, the protocol used by major corporate video conferencing systems, but the company's future plans will involve more efficient compression schemes. The next version of the product, slated for Q1 2004 release, will use H.264, also known as MPEG-4 Part 10.

The company also plans to add SIP (session initiation protocol), a technology that cable is quickly embracing, notes Harris. "Now the phone won't be used for only video calling, but also as a regular phone," he explains. "If you buy a SIP phone from us, you'll be able to connect to any SIP network."

Viseon plans to begin shipping SIP-compatible videophones this month. Initially, the device will support traditional telephony features such as caller ID, hold, transfer and three-way audio conferencing, the company says.

Also working in Viseon's favor is the dropping cost of the technology. The current version of the VisiFone, at $599, is a bit pricey for some budgets, but future iterations of it should close in on $300, as the bill of materials continues to fall and chipsets continue to consolidate. Viseon recently launched a TV-based product that goes for $399.

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D-Link’s i2eye VideoPhone leverages broadband and the TV screen.

Taking a much different approach is D-Link, maker of the DVC-1000 i2eye VideoPhone. Instead of a self-inclusive display, the D-Link device uses the television as the display element. D-Link, which started making the i2eye available via retail in February, has shipped about 30,000 units so far. The product goes for $299 MSRP, though a recent rebate reduced the price to $149.

The i2eye needs about 200 kbps to get between 20 and 27 frames per second. "Realistically, it's supposed to do 30 (fps), but that's in a perfect world," says D-Link Associate Vice President of Technology William Brown.

Though initial versions of the product required consumers to know quite a bit about home networking, future versions will make the i2eye much easier to install and configure, the company believes.

For example, the next firmware update, scheduled for November debut, will add UNE-P (Unbundled Network Elements-Platform) support. Instead of requiring users to poke holes in their firewalls and manually add firewall rules, the UNE-P-capable i2ye will automatically set-up those rules in the routers.

"Once that's added, the router, whether it's our brand or another brand, if it supports [UNE-P] will automatically configure when it requests and uses ports," Brown says.

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WorldGate expects to have “Ojo” ready for trials by early 2004

The latest entrant to the videophone space is WorldGate Communications, which has decided to bet its future on the fate of the videophone instead of its original business focus: interactive television.

iTV "just didn't have the killer app to drive significant revenue streams to the operator," says WorldGate Chairman and CEO Hal Krisbergh. iTV will come of age eventually, but "it didn't happen on a timeframe WorldGate could live with," he explains.

Faced with that reality, WorldGate could either "stay on the river and head on to the waterfall," or change its focus altogether, said Krisbergh. WorldGate went for the latter, selling off most of its iTV assets to TVGateway LLC, and moving its time and money toward "Ojo," a videophone product.

"I've always been a believer in video telephony," Krisbergh says, noting that the technology represents the pinnacle of an "ultimate mountain" that combines video, voice and data. "It's a synthesis, the ultimate product for the industry."

Krisbergh notes that videophone quality left much to be desired even five years ago, but that the technology has improved dramatically. "The number-one criteria is quality. It has to be true-to-life," Krisbergh says.

In the development of Ojo, WorldGate aimed to give it a more natural view of the people who are using it. "You want something looking at you at eye level," he says. Using a TV screen might show the person, "but this is not a personal conversation," he opines.

WorldGate expects to provide a prototype of Ojo this fall, and hopes to have the product available for trials by January 2004. The company is also working with an unnamed vendor with "retail and distribution capabilities," Krisbergh notes. Ojo will feature a seven-inch diagonal screen.

Ojo uses H.264 compression technology, which, Krisbergh says, enables the device to render 30 fps at symmetrical speeds of 150 kbps.

Being a wireless device, Ojo also uses a 901e variant to enable users to use the device anywhere in the house. The device's battery is good for up to six hours. In addition to an Ethernet port, Ojo also contains a separate POTS (Plain Old Telephone Service) line for "regular" phone use.

"We want [Ojo] to be the primary telephone," Krisbergh says.

Creating a business model

Though videophone technology gets high marks on the "cool" quotient, cool just doesn't cut it on Wall Street anymore. To be successful, even the most interesting technology has to be coupled with a solid business plan.

WorldGate's plan is to work with cable operators on a QoS (Quality of Service) tier that provides sufficient bandwidth for high-quality video telephony. WorldGate is suggesting that operators charge consumers a flat, $20 per month fee for the QoS-sensitive service.

"Offering a QoS-level service will ensure that the cable operator will participate in the revenue stream," Krisbergh says.

Krisbergh insists that WorldGate is only in the business of selling units and not interested in sharing incremental revenue. He says Ojo will retail for about $300.

Viseon has been selling the VisiFone direct to consumers since the beginning of the year, but believes the cable industry–with its high-speed pipe and marketing ability–will help the company move units much faster. It also believes that cable operators can market the product to retain current HSD customers and to upsell others to the high-speed tier.

Harris prognosticates that operators will bundle videophone services, or create a package that includes video telephony, for about $26.95.

Another revenue-generating approach could turn the videophone into a part-time advertising tool. "We can feed in commercials or banner ads," says Brown of

D-Link, noting that a cable operator could use the capability to upsell customers to other services or use the phone as a video-enabled call center.

A cable-USO connection?

Although the videophone vendors are doing whatever they can to win the attention and adoration of the MSO community, a small band of cable folks are already working the military channels as part of a USO-led effort to drum up broad interest in the category.

The USO Videophone (USOVP) initiative aims to use the technology– along with broadband hookups–to connect troops in the field with their family and loved ones back home.

By design, the initiative would be responsible for the installation of videophones and kiosks at domestic and international USO facilities and at local cable operator lobbies and customer service centers. USOVP would also supply the devices to military installations around the world.

From there, troops and their families would book their videophone reservations through a Web-based system designed to automatically calculate the time differences between the parties.

Three cable industry vets presently are managing the USOVP effort gratis: Rick Jubeck, national sales manager for Lemco Tool; William Riker, the current CTO of The Cable Center and former president of the Society of Cable Telecommunications Engineers; and Doyle Albee of Strategic Advantage Communications, which handles a variety of communications activities for the Center.

The USOVP effort will serve as a "business accelerator" for videophone technology, predicts Jubeck. "We have the technology today to put them in real-time video communications with their families," he says.

USO Videophone has already obtained the authority to deploy videophones to military centers, and talks are already underway with a number of MSOs, including Charter Communications, Comcast Corp. and Cox Communications, Jubeck says.

The first phase of the project is to connect 121 USO centers with the technology. That phase won't be completed until late 2004. "We want to do this right, not fast," Jubeck says.

Phase II, a more costly endeavor, will attempt to install the technology in hundreds of U.S. military installations. USO Videophone, Jubeck says, is currently seeking grants from public and private foundations for project funding.

USOVP is still seeking a videophone-manufacturing partner. "We're close to finding a videophone partner," Jubeck says, noting that such a relationship should be solidified by early next year.

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