The technology that gave cable operators an entry to voice service is now rapidly being pushed aside for the latest technology darling, voice-over-Internet Protocol. But it doesn't appear circuit-switched technology is headed for the bone yard just yet—circuit-switched gear still powers some of the most widely deployed services, and given conversion difficulties, they won't quickly convert to VoIP.Economics drives the decision
A good case-in-point is Charter Communications Inc. Despite its focus on next-generation IP service, Charter has a constant-bitrate telephony market—albeit a small one. The MSO inherited it as part of a system swap with then-AT&T Broadband to consolidate service in its hometown of St. Louis. The switched system included customer premise equipment, but not the switches—that had been handled under a contract deal with AT&T Broadband's parent, AT&T Corp.
ARRIS' Cornerstone 4 voice port
Given the maturity of that market, it doesn't make sense for now to move it over to IP voice, says Mark Barber, Charter's corporate vice president of telephony services.
"We at this point and time don't have any intentions of converting those customers to IP, and the primary reason when you back up is this: we are almost at saturation in that market, meaning that in terms of penetration, we are north of 30 percent in that market, so the penetration is probably not going to be that much higher," he notes.
If the market were hovering closer to the 10 percent penetration level, "when you look at the capital cost per customer it is higher, (and) you might have a reason to switch," Barber says.
Another reason to make the leap to VoIP is if the circuit-switched technology is inferior—but that isn't the case, either.
"I don't have a motivation there (to change it out). Or, the other side of this is, if I were missing a revenue stream—if the IP format gave me the opportunity to launch other voice-related services—(I'd consider swapping it)," Barber says.
For smaller cable operators, the decision is entirely driven by economics, and specifically, what assets they have to start with, according to Alan Tschirner, director of engineering for the National Cable Television Cooperative.
"Early adopters were circuit-switched by necessity, and there were two or three runs at VoIP that didn't work," he notes. Others have partnerships with competitive local exchange carriers, "or they are dual providers—they are phone companies and they have a switch."
That said, Tschirner notes he knows of no NCTC members buying new Class 5 switches, and overall, "for those who are doing phone, VoIP is the leader."
"It's an entry decision," Tschirner adds. "If they are circuit switched they are likely to stay circuit switched in their expansion."
Such is the case for Sunflower Broadband, a smaller cable operator based in Lawrence, Kan. Sunflower now serves about 10,000 voice customers in Lawrence, and it plans a modest expansion to some of the outlying communities.
The fact that Sunflower started telephony service early—back in 2002—was part of the reason for going with a circuit-switched architecture. At the time, VoIP technology was a bit too young to make the base for a reliable voice service, so the cabler decided to stick with constant-bitrate.
Flash forward to 2005, with Sunflower now planning an expansion into the communities surrounding Lawrence: There too, it is sticking with circuit switched rather than make the VoIP leap—for now.
"It was technology we already had—we didn't have to rewrite billing systems; we didn't have to rewrite autoprovisioning. We didn't have to make any changes other than to add a little bit of equipment to the network to expand into those areas," says Shane Woodard, Sunflower's inside plant manager. "We have kept our eye on IP, but as far as the expansion went, it wasn't a big enough of an expansion that we would have to seriously increase our network infrastructure."
Constant bitrate has its staunch supporters, including Tellabs. Its Cablespan product line includes several products ranging from GR-303 gateways down to end user devices, and it has a stable of customers including Comcast Corp. and Cox Communications Inc., as well as overseas carriers.
One reason may be that while it's the technology wave of the future, VoIP still has some rough edges.
"There is a big difference that we are seeing in the ability to make voice-over-IP work in a lab environment and making voice-over-IP work in the field," O'Malley says. "It's a big difference in terms of signal-to-noise ratio and other factors operating successfully in the lab than it is operating actually out on installed cable plant that has been out there for years and years."
In addition, Tellabs sees a growing opportunity for circuit-switched gear among Tier 2, Tier 3 and international operators.
"The reason for that is deploying voice-over-IP is going to be a very capital- and labor-intensive deployment, and only the largest providers worldwide are going to have the resources to be able to support that," O'Malley says.
Telephone gear vendor ARRIS takes more of a transitional view regarding constant-bitrate technology. Among vendors, ARRIS supplies the lion's share of the last-mile constant-bitrate gear to the market with its Corner-stone line of subscriber and last-mile equipment. As of the end of November, ARRIS Cornerstone HDTs and voice ports drove 4.7 million lines of the approximately 6.7 million total circuit-switched cable telephony lines worldwide.
"I still want to point out, however, that we are still seeing strong demand for the constant-bitrate product, but it is coming from those customers who have already invested extensively in the constant-bitrate technology and want to maximize the return on the existing assets that they have invested in," he notes.
Indeed, ARRIS did see a few new constant-bitrate customers in 2004, including a couple of municipalities and at least one independent telco that had switches and had acquired some cable networks. A few existing customers also expanded their circuit-switched voice networks through either acquisition or new market rollouts.
Cornerstone also gained a boost last month, when Cox Communications Inc. signed a deal with ARRIS to extend its exclusive supply deal for switched telephony customer devices. Under the deal, Cox will buy "a substantial amount" of Cornerstone voice ports in 2005 for its switched telephony markets. Cox does plan to eventually transition those markets to VoIP, and under the deal, it gives ARRIS an 18-month exclusive contract to supply Touchstone VoIP ports for that transition.Migration hassles
Even if circuit-switched telephony has seen its zenith, it isn't time to send condolence cards just yet. Given the obstacles, cable operators offering circuit-switched telephony don't appear to be in a hurry to move existing systems over to VoIP.
Making such a transition not only strands equipment capital, but also requires reprovisioning lines, altering billing systems and retraining customer service and support. "That means you've got to migrate slowly," Barber says. "So that means that your provisioning systems are going to have to deal with two different technologies in the same node."
The backoffice conversion is one of the thornier issues that dissuades cable operators from letting go of circuit-switched service. Tellabs' O'Malley notes that while most of its cable customers see an eventual VoIP destination, the migration will be a long trip.
He points out that many cable operators are getting established backoffice systems via their agreements with telco switch owners, "but none of that exists for voice-over-IP today."Services are equal, for now
Another strong argument for circuit-switched technology is that it is far from broken and is able to supply the same lineup of services, when compared to VoIP.
"Right now, there is no service that I can do in VoIP that I can't do with constant-bitrate," Charter's Barber notes. "Even when I look at some of the SIP-based services that are coming down the line that maybe give you video calling capability, remote access or presence awareness, caller ID on a set-top box and those kinds of things—bottom line is I can overlay that SIP architecture on a constant-bitrate architecture and achieve the exact same thing."
But others suggest the new services are coming fast. For CedarPoint Communications Executive VP of Strategy and Market Development Dave Spear, "The legacy gear is not going to be able to make those changes for new applications as fast as they need to" for looming applications that can tie in mobile and video phone functions. CedarPoint has developed a multimedia switch that can be configured for constant-bitrate or IP traffic, and the trend among its clients favors the latter.
"As more consumers adopt these new applications and these new applications come to the marketplace, then I think there will be a time when somebody will say, 'OK, is this the time to cut over those Class 5 switches'?," Spear adds.
Indeed, during the next 24 to 36 months, Sunflower will start rolling out a VoIP service to field applications that tie the phone to cell phones, video phones and set-top boxes. But that doesn't mean it's abandoning circuit-switched offerings, notes general manager Patrick Knorr.
Instead, the new IP services will have more of a residential focus, while enterprise services continue to be powered by circuit-switched systems for some time.
Except for big businesses that will be provisioned with more encompassing IP applications, "for just your regular two-, four- or even eight-line business, I think the reliability of circuit switched and the simplicity is far more important to a business than gadgets," Knorr says.CBR gear pricier
On the downside, the laws of market economics are starting to weigh against circuit-switched technology. Already, VoIP subscriber devices and network gear are undercutting older constant-bitrate gear. Charter's Barber says that depending on volume, new constant-bitrate equipment costs between $250 and $300, plus $90 to $100 per switch port per line. In contrast, VoIP media terminal adapters cost $90 to $125, with switch port costs coming in at $40 to $50.
The Tellabs 2300
Telephone Distribution System
The higher circuit-switched equipment cost is one reason that ARRIS doesn't see the market developing for smaller operators the way rival Tellabs does.
"The startup cost for voice-over-IP is actually lower than constant-bitrate, so the smaller accounts are actually almost more likely to look at voice-over-IP initially," Brovont says. "Customers that have existing switch assets that have not yet deployed constant-bitrate telephony over HFC are using gateways where they can deploy voice-over-IP in the access network, and still absorb capacity on their circuit switch."
With more cable operators opting for VoIP in their first foray into voice service, does that mean manufacturers will scale back production of circuit-switched gear? Perhaps eventually, but Tellabs doesn't see an immediate volume decline.
"At least in the case of most of the major Tier 1 suppliers, they've got relatively large, multi-year contracts that lock a lot of the pricing in place," O'Malley says. "So given that, I would say that is certainly not a short-term issue, and only possibly a long-term issue."
Still, the reality is that circuit-switched gear will be harder to come by in the future, Sunflower's Woodard notes. So far, Sunflower has been able to acquire gear from resellers—in one case picking up a brand-new HDT from a cable operator that went under. But Woodard expects that will get harder over time.
"IP is the sexy thing in the game and that is what everyone wants to be doing and that is what they want to install," he says. "And we may just run into a point where product availability means we have to make a transition."Eventually IP
While he notes that in the distant future everything may end up on an IP platform, Woodard isn't as eager to put the last nail in the constant-bitrate coffin.
"I don't know if circuit switched should be dead," he notes. "I think there are a lot of reliability issues. There are a lot of technical management issues, and there also seem to be some capacity issues on how many calls you can actually get over a voice-over-IP network before you start running out of room for your data and you need more CMTSs, or you are going to eat up more return path with voice-over-IP and things like that."
For now, suppliers including Tellabs and ARRIS continue to support their circuit-switched lines. Although most see this eventual transition to IP-based voice, they also argue that it won't happen any time soon.
"It will be a long tailoff—several years," Brovont says. "Nobody is going to do a hard stop on the constant bitrate and then move to voice-over-IP overnight."