IP Capsule E-newsletter, July 13, 2006

Thu, 07/13/2006 - 9:37am

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July 13, 2006

IPso Facto...

Shooting from the hIP

I've covered technology one way or another for over 20 years, and despite some contrary evidence, I have actually learned a few things. One of them is that if there's a technology bandwagon to jump on, jump on it.

It doesn't matter if that wagon has a cracked axle, or if what you really need is a canoe. If you attract enough smart people to hop on board, they'll figure out a way to shore up the wheels and jerry-rig some pontoons. You'll make it to land's end, and you probably won't need that canoe after all.

IP is one of the biggest bandwagons rolling around, with much of the electronics industry already in the process of converging on it. The technology has so revolutionized voice communications that incumbent telephone companies are preparing to scrap their old circuit-switched networks.

But like most bandwagons, IP most definitely isn't the best vehicle to fulfill every need for which it is being used. IP, and its companion technology, Ethernet, were built for best-effort services, and many applications (e.g., video, business services) require guaranteed minimum levels of service quality. Ethernet does not differentiate among packets, a bit of a drawback when service prioritization is a priority.

But if IP is not the best technology available for all the services now converging, it is shaping up as the best single option for the price. And even as we speak, smart people are figuring out ways to get around that best-effort drawback, and address other technological concerns. By the time you have to have IP for everything, it'll be able to do just about everything well enough.

That's the other thing about bandwagons; as vehicles go, they tend to lumber. Take HDTV as a case in point. Even though HDTV was, and is, a great idea, it took well over a decade before anybody other than attendees of industry conferences ever saw it. Since the Grand Alliance established the HDTV spec, two members were swallowed whole (General Instrument and Sarnoff Labs), one is a radically different organization (AT&T), and another is a shade of its former self (Zenith). [Pop quiz: who were the other members? Answer (*) at bottom of this week's edition.]

The transition to IP is a process in progress, and progress will be rapid, though still measured in years. And of course there will be impediments. For example, I submit for your consideration the story below on the legal rocks that VoIP pioneer Vonage has to navigate.

Meanwhile, make room on the IP bandwagon; I'm jumping on. What with IP being the common element in convergence and competition and communications and computing and consumer electronics I expect there'll be plenty to keep track of and write about.

And I invite you to send me information that, should it be published in my new column, IPso Facto, it might be of interest to the industry. Or contact me if you've got a question a disinterested third party might best be able to find an answer to. Or if, in being a little too ambitious, I write something that suggests I may have my head up my aspirations, feel free to let me know. Contact me at

China Telecom gives Cisco the lead on building IP network
China Telecom decided to base its 2006 ChinaNet network expansion on Cisco Systems' Internet Protocol Next-Generation Network (IP NGN) architecture, and has designated Cisco as the primary equipment provider for the project.

ChinaNet has 25 million broadband subscribers, and is expecting continued explosive growth with increasing bandwidth demands associated with applications such as video phones, online games and video on demand. China Telecom is already one of Cisco's biggest IP equipment customers. Its 2006 expansion of its ChinaNet network will involve the migration to an all-IP backbone.

The expansion will keep Cisco's CRS-1 Carrier Routing System at the core, and will involve significant upgrades to its existing Cisco 12000 Series Routers. The upgrades will expand the ChinaNet core network's capabilities, reliability and scalability.

Entone, Minerva take a trip Down Under
FTTx/IPTV network integrator CEOS has selected Entone's StreamLiner network video recorders (NVRs) and Minerva Network's iTVManager for IPTV deployments it is contracted to build in Victoria and Tasmania, Australia, and throughout Thailand.

The deployments will support more than 100,000 subscribers, and will be built under the auspices of the Collaborative Optical Leading Testbed (COLT) organization, which provides broadband services to universities, homes, student dormitories and business and is fully supported by local government entities.

Minerva's iTVManager middleware platform will help network operators manage their systems. Entone's StreamLiner NVR is based on standard server hardware from vendors such as HP and IBM.

Siemens supplies turnkey IPTV solution to KPN
KPN, the largest carrier in the Netherlands, has launched an IPTV service based on Surpass equipment supplied by Siemens Communications.

The service features video on demand and the ability to record up to 100 hours on network storage (a la Cablevision in the U.S.). In addition to physical equipment, Siemens has provided KPN with management systems for all applications, digital rights management, and uniform subscriber management. The middleware providing the communication between the network and the set-top box comes from Siemens subsidiary Myrio Corp.

VoIP patent storm swirling around Vonage intensifies
Vonage Holdings acquired ownership of three patents that automatically make it the plaintiff in patent infringement lawsuits against Sprint Communications and Verizon Communications.

At the exact same time, Vonage was hit with yet another charge of infringing someone else's patents.

Vonage recently purchased three patents from Digital Packet Licensing Inc. (DLP) that concern the compression of packetized digital signals commonly used in voice over Internet Protocol technology (VoIP) technology. Several companies, including Motorola, Time Warner, and Qwest Communications, have licensed DLP's technology, essentially validating them. Among the companies who did not cut a deal with DLP were Verizon and Sprint.

That made the acquisition of the DLP patents incredibly convenient for Vonage. It just so happens that Sprint filed a VoIP patent suit against Vonage last year, and Verizon filed a separate VoIP patent suit against Vonage in June.

So to avoid mutually assured litigation hell, Sprint and Verizon have entered cross-licensing negotiations with Vonage, which were ongoing before Vonage's deal with DLP was closed.

So everyone is making nice, except for Klausner Technologies Inc., which last week filed suit against Vonage for infringing its patent that concerns the retrieval of VoIP voicemail on a cell phone or handheld device. Klausner is claiming damages and royalties estimated at $180 million.

Just as Motorola, Time Warner and Qwest strengthened DLP's negotiating position by licensing DLP's patents, Time Warner recently encouraged Klausner by settling with Klausner after Klausner sued AOL for $200 million for infringing the VoIP voicemail patent.

According to Klausner, Vonage failed to respond to a request that it too license the VoIP voicemail patent. Filing a lawsuit can of course be an effective means of catching someone's attention.

Vonage appears to have little leverage against Klausner. Klausner is unlikely to be interested in a cross-licensing deal—it seems motivated purely to protect its intellectual property (IP). Time Warner can afford to pay to make a nuisance like Klausner go away, but only Vonage knows if it can afford the amount Klausner might settle for—certainly far less than $180 million.

ITC jumps into Qualcomm-Nokia war
Then again, Vonage, Sprint and Verizon could end up like Qualcomm and Nokia,—biting and scratching over patents. Qualcomm said the U.S. International Trade Commission (ITC) has opened an investigation into Qualcomm's complaint, filed with the ITC in June, that Nokia is engaging in unfair trading practices by importing and selling mobile phones that infringe on Qualcomm's CDMA patents.

Qualcomm said it expects a judgment in the first half of next year. A Nokia spokesman was quoted saying the company will cooperate with the ITC and believes Qualcomm's claims are without merit.

Qualcomm and Nokia have a history of friction, including patent infringement claims against each other and squabbles about what is actually covered by cross-licensing agreements they have between them. The two are negotiating an extension of their technology license agreements, due to expire next April.

Nokia has already announced it would stop making CDMA (code division multiple access) phones, a technology for which Qualcomm holds most patents. Nonetheless, Qualcomm insists Nokia is infringing patents it owns that are applicable to CDMA alternative GSM, a standard popular in Europe.

i2Telecom adds Hewitt to Advisory Board
Communications industry vet Mark Hewitt has joined the advisory board of i2Telecom International, a provider of VoIP products and services. Hewitt was at Motorola Communications, where he first worked on the design of the trunk radio system, the Ardis Network (which supports the Blackberry), and the space-based Iridium system.

He later joined Frontier Communications as senior director, engineering and product development, where he was responsible for IP technology (Frontier was acquired by Global Crossing). At I-Link, as SVP of business development and product marketing, Hewitt launched the softswitch/IAD subsequently licensed to Net2Phone and Brooktrout.

i2Telecom's VoiceStick Internet appliance is a device that can be plugged into a USB port to enable a device for VoIP. The company has applied for a patent.

Since we're on the subject of patents and infringement and Vonage…Vonage introduced a similar device which it claimed to be unique. Skype also announced a similar product.

BandTel finding multiple ways to enterprise customers' hearts
BandTel and AudioCodes have entered a partnership in which they will market and sell a combination of the former's voice over IP to PSTN (public switched telephone network) termination services with the latter's gateways.

BandTel will offer AudioCodes' voice infrastructure equipment at no cost to qualified customers who are under contract for a minimum of 100,000 usage minutes per month or who qualify based on other contractual terms.

There is a dual aim for the arrangement. The first is to provide a solution attractive to business users based on the ability of Audiocodes' equipment to perform the functions of a PBX or an enterprise gateway. That should create a commission opportunity for BandTel resellers. Ideally, that will result in greater sales of minutes in increments of 100,000.

BandTel last week announced a similar partnership with Zultys, a provider of enterprise VoIP equipment, including an IP PBX. As with AudioCodes, Zultys resellers will be able to sell packages of minutes on BandTel's network infrastructure. >>http://www.zultys.comd to build in Victoria a½

ntl:Telewest chooses Ericsson to help transition to IPx
ntl:Telewest signed a 5-year contract with Ericsson for VoIP technology and services.

The initial phase of the agreement is to help build a residential voice-over-broadband service based on Ericsson's IMS platform, which has already been installed and is undergoing testing ahead of launch.

Ericsson will also help ntl:Telewest transition from a circuit-switched voice network to IP using Ericsson's IP-based Telephony Softswitch solution. The company's IP softswitch and IMS architecture products will allow NTL to create new IP-based services for its wide range of business and residential customers.



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Study: Mexican SMB market primed for IP solutions
Frost & Sullivan said the Mexican data communications services market earned revenues of $1.20 billion in 2005 and estimates that will expand to $1.82 billion by 2010.

The large enterprise and multinational segment is saturated, F&S determined, making small and medium enterprises (SMEs) the next target segment for the data communications services market in Mexico. The introduction of IP-based services, which are more affordable, is increasing the penetration in this segment.

Currently, market participants are offering various services such as X.25, Internet protocol virtual private network (IP VPNs), frame relay, VPN and dedicated lines. Larger companies are increasingly shifting to IP-based services that provide vast bandwidth capacity for a variety of services including Internet access and Web-based services.

* Pop Quiz answer: The other members of the Grand Alliance were Philips, Thomson, and MIT.

Company: Cisco Systems
Headquarters: San Jose, Calif.
CEO: John Chambers

Claim to Fame: It's big. It's really, really big. Might as well start with the 800 pound gorilla, then, right? Almost everyone at Cisco lives, breathes, and eats IP. So certain is CEO Chambers that convergence on IP is a foregone conclusion that he usually refers to IP's takeover of world communications in the present - rather than the future -- tense. Cisco dominates the CMTS market, contends in cable modems and other CPE, just bought a commanding presence in both cable and telco/IPTV headends with its purchase of Scientific-Atlanta, and is working tirelessly to migrate the cable industry to IP transport.

Recent news of note: Announced it is the primary vendor migrating the backbone of China Telecom's ChinaNet data service to an IP Next Generation Network architecture; cut a deal to have its Linksys routers and VoIP adapters sold at Target department stores.

CTAM Summit
July 17-19, 2006
Boston, Mass.
More information: Click Here

Cross Platform Summit 2006
Aug. 8-9, 2006
West Hollywood, Calif.
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CTAM Blue Ribbon Breakfast
Sept. 13, 2006
Grand Hyatt
New York, N.Y.
More information: Click Here

IPComm 2006
Sept. 25-27, 2006
Nashville, Tenn.
More information: Click Here

2006 FTTH Conference & Expo
Oct. 2-5, 2006
Las Vegas, Nev.
The Venetial Resort
More information: Click Here

The Cable Center Key Issue Series
"Confronting Cable's Technological Frontier"
Oct. 10, 2006
The Cable Center
Denver, Colo.
More information: Click Here

9th Annual Cable Television Hall of Fame Celebration
Oct. 11, 2006
Denver, Colo.
The Cable Center
More information: Click Here

CTHRA Fall Symposium
Oct. 18, 2006
Philadelphia, Pa.
Park Hyatt Hotel
More information: Click Here

TelcoTV 2006
Nov. 6-8, 2006
Dallas, Texas
More information: Click Here

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Copyright © 2006 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.


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