A Breed Apart
Welcome to the 5th edition of the CED Broadband 50, a list of the companies, technologies and people that played a big role in 2005, or are positioned to do so in the coming year.
Inside, you'll get to look at how we stacked up the field. Who won, who placed and who showed? Also returning this year is Area 51, where we mention a few we gave serious consideration to, but which didn't make the cut for various reasons.The list: How it was built; how it was ranked
Hot and hype...all in one!
For a technology that specializes in all of the mundane gruntwork of setting up, authenticating, tracking and delivering IP data, many are nevertheless pegging IP Multimedia Subsystem (IMS) as the next big "it" technology in telecommunications.
Born in the cellular GSM world, IMS has emerged as a bridging technology for wired and wireless, potentially providing a signaling architecture that can reach out across multiple IP networks, allowing any kind of traffic to flow across any IP network to any device.
In some future world, that could allow Joe Customer to use his wireless phone to ping his home DVR and have it send him a video stream of last night's episode of "Desperate Housewives" so he can watch it on his handset. In the nearer future, it could lead to presence-aware phonebooks, allowing users to not only look up friends' phone numbers and e-mail, but also see in real time if these friends are active on a network.
The implications for new services that could flow to any customer, anywhere, have got more than a few broadband brains excited. It will take some time for wireless and wireline operators to add IMS intelligence, but in the next decade, the technology could indeed make all of those heretofore over-inflated claims of "convergence" a reality. —Karen Brown02. Bandwidth
Doing more with what you got
That's certainly true (as always) for cable operators, which are increasingly vigilant about their bandwidth situation. They've got around 200 MHz for digital services (between 550–750 MHz), until they start reclaiming analog spectrum, and some of that (around eight 6 MHz channels, or around 48 MHz) got chewed up with digital simulcast.
Then there's the anticipated onslaught of HDTV material, projected by some (including Comcast CEO Brian Roberts) to go as high as 80 streams. And don't forget broadband Internet (including the channel bonding capabilities of DOCSIS 3.0, which require channels to bond), and voice.
No worries, the cable side says (especially to Wall Street). Then they tick off a laundry list of bandwidth conservation options that goes something like this:
- Shift to 256 QAM.
- Switch out amplifier housings to 860 MHz, or maybe even 1 GHz.
- Move all premiums and pay-per-views to digital.
- Apply advanced statistical multiplexing.
- Apply switched broadcast.
- Start reclaiming analog bandwidth, maybe at a rate of 10 percent a year.
According to them, they've got the bandwidth question under control, reasoning that spectrum is what you're born with—and bandwidth is what you make of it. Or, as Time Warner CTO Mike LaJoie recently quipped: "Cable is like the Federal Reserve of bandwidth...we can practically print the stuff!" —Leslie Ellis03. Commercial services
Getting down to business
Sure, 2005 was about the third year in a row that was declared by someone or other to be the year cable operators got serious about commercial services. But there does seem to be more movement in the past year or so. New, IP-based cable technologies that can provide a T-1 connection—which is table stakes in reaching much of the enterprise market—have finally come onto the market, and there are also better options for fiber and even last-mile wireless connections as well.
Among cable operators, Cox still has a leading position in enterprise services, but Time Warner has also beefed up its Road Runner Enterprise offerings, and there are signs Comcast also is going to start a commercial services push soon.
So while 2005 may be the year MSOs got serious about commercial services, it may be that 2006 is when they finally get going. —KB04. DOCSIS 3.0
Bond. Channel Bond.
With Verizon busily stringing fiber right to the side of the house, and SBC pressing forward with plans of 25 Mbps of downstream bandwidth, it's good to be the guy with DOCSIS 3.0 in the back pocket.
The sexiest part of DOCSIS 3.0 is "channel bonding," which topped technology headlines earlier this year for its ability to leapfrog the fiber dreams of the telcos. How it works: Glue four channels (minimum) together, get 152 Mbps (38 Mbps × 4) of downstream throughput to an "individual" cable modem.
And that selection of four channels is just a placeholder to get things going, involved technologists say. In practice, operators will be able to bond together as many digital channels as they have available—and the channels don't need to be spectrally contiguous. Stitch together 10 channels; squirt nearly 400 Megabits of data per second into that one cable modem.
As downstream speeds go, that's two orders of magnitude above what most consumers get right now. It's smokin' hot.
But there are many other parts of DOCSIS 3.0, including a map to IPv6—less sexy, but just as necessary. It's a fact (Jack) that the IP address space is starting to get tight; IPv6 corrects that conundrum.
Then there's the whole bit about modular cable modem termination systems, useful in bringing down the costs associated with hauling video over IP.
Of course, DOCSIS 3.0 as an official specification isn't out yet. Look for it to emerge in February. After that, it's the usual sequence to market: Chip guys first, then the larger vendor community. Interop tests at CableLabs, then field trials, then deployments. If nothing goes wrong, 2007 is looking like a fairly realistic target for deployable DOCSIS 3.0 products. —LE05. Downloadable conditional access (DCAS)
Like it. Love it.
If there was one surprise in the Federal Communications Commission's 37-page ruling, on St. Patrick's Day, about "navigational devices," it was the liberal mention of an advanced technology that, until then, had been tucked inside cable's cone of silence.
The mention: Downloadable Conditional Access, which also goes by "software-based security," "downloadable security," and "downloadable CA."
With the three-year anniversary of the original plug-and-play agreement hitting later this month, it seems painfully clear that finding unanimity amongst behemoths isn't easy.
Except when it comes to DCAS, which seems to have elements that make everyone happy.
Downloadable CAS is, in essence, signal protection without CableCARDs.
Retailers love it, because it makes for more fully-featured digital and HDTVs, without CableCARD-related complaints later. The FCC cautiously likes it, because it removes cost and creates a common security environment. Even consumer electronics companies seem to favor DCAS—again, cautiously.
And, of course, cable operators love it, because it slices off a big cost chunk (the card), and cuts down on truck rolls.
Now, it's "just" a matter of making it work. At press time, a meaty report on the feasibility of DCAS was in the works from the cable side, to meet an FCC deadline of Dec. 1. Hope springs eternal. —LE06. Google
What are they up to?
Back when we first started this list in 2001, little did we know that Google would someday become a Broadband 50 fixture. Back then, we used something called the "Google Factor" to generate the list ranking. For grins, I just "Googled" the word "Google," half expecting my computer to simply explode. Instead, I got 864 million results. In 2001, Intel Corp. topped our list with a Google Factor of 541,000.
Anyway, where was I going with all of this?
Oh, yeah. Google. They're buying up dark fiber. They're investing in broadband over powerline (BPL). They're hooking up cities with free Wi-Fi. They're reportedly joining Comcast on an investment in AOL. They're doing IM. They have a video app in beta form.
My, God! They're going to take over the world!
Well, maybe not. But they are going to have a lot to say in how the Internet evolves from here, that's for sure.
And let's not forget Google's incredible search engine. With cable VOD on the way to 10,000 hours of content, operators could sure use it. —Jeff Baumgartner07. Sprint/Nextel
Plotting cable's portability plan
Why create a joint venture with Sprint/Nextel? If you're a gaggle of cable operators seeking to buy yourself some wireless spigots for your various services, and you're shopping around for a partner, chances are you're not interested in anyone already linked to a telephone company.
That left Sprint (who had already swallowed equally unaffiliated Nextel), or T-Mobile.
What's the deal? The MSOs put in a collective $100 million, and so did Sprint. The first three years of the 20-year deal are exclusive.
The first thing consumers could see is co-branded services sold at retail. Over the next few months, watch for involved MSOs to cut individual deals with the joint venture, to build the retail details. (Not to mention the back office "goo" that makes one bill possible.)
It's after that, that the fun stuff begins, probably starting with "roam to home" services, handy for homes with less than optimal cell phone coverage. The idea: Use your combination WiFi/cell phone to talk over the cable voice-over-IP (VoIP) connection when you're in your house; seamlessly cut to the cell network once you're in the car and pulling out of the driveway.
Or, farther out, use your mobile phone to program your digital video recorder, or receive (and send!) streaming mobile video. Those applications will use Sprint's 2.5 GHz spectrum, handily stockpiled but not yet built out for broadband wireless.
If nothing else, the deal tags 2006 as a year for untethering. Cynics cite that cable's history of cross-MSO joint ventures is sketchy—recall @Home, and before that, Primestar. But then again, wireless is way more "do-or-die" then either of those efforts. —LE08. PacketCable Multimedia
Ready for takeoff?
Applications aside, PCMM also will give the cable industry a differentiator to exploit in a rapidly growing world of "over-the-top" voice and video services.
Although QoS has not hindered the relative success of services like Vonage's (yet), as more and more IP services enter the network, it's likely only a matter of time before QoS will become a necessity, rather than a luxury.
Multiple deployments and trials of PCMM are expected this year. Cox Communications, as one example, is testing the technology in the lab right now, and plans to extend that into field trials in the first half of 2006, and commercial deployment by year-end.
Although PCMM is relatively young, its emergence should prove a boon for vendors of policy servers and application servers—two important network elements that make up the PCMM architecture. —JB09. Rogers Communications
Telco competition? Been there, done that
Oh, so you're worried about your broadband rivals? Try competing in Canada. Trust us on this one: Bell Canada isn't the kind of telco you want looking at you through the cross-hairs. They're the phone company, the satellite video company, the high-speed broadband/DSL company, and the wireless company. All in one.
But, Rogers holds the #1 position (measured in subscribers) in video, broadband Internet, and wireless voice, in the territories it serves.
Inside Rogers, being competitive is a mindset. Talk to any Rogers engineer, about any topic, and you'll notice how quickly the conversation turns to competitive technology reasoning. They'll compare Bell Canada's satellite TV offering to its IPTV plans, and wonder how the two will impact each other, cannibalistically. Or they'll describe the work that went on to unify order entry, customer care, and one-bill billing—for what is already a quad-play.
It makes you wonder if people at Bell Canada sorta wish they weren't in Rogers' cross-hairs. —LE10. Time Warner Cable
Pushing the nDVR envelope
"Start Over," a product spawned from the MystroTV division, enables Start Over-enabled shows (read: shows with the requisite copyright clearance) to be available on-demand just seconds after their original broadcast.
Taking rapid ingest to a whole new level, the system uses real-time catchers and real-time encoding. An internally-developed component called "Sectamus" handles the business rules of the Start Over services and, serving as a scheduler, hands off the content with copyright clearance for Start Over to the VOD system.
Of course, VOD is just one area in which Time Warner Cable continues to innovate. It was also early to the game with VoIP, a strategy that has netted 854,000 telephony subscribers (as of Sept. 30, 2005), equating to about 5 percent of "eligible" homes passed, and making the operator one of the fastest-growing VoIP service providers on the planet.
Time Warner Cable was also early off the blocks with IPTV via a highly publicized trial in San Diego that pipes the operator's expanded basic tier (about 75 channels) to customer PCs. —JB11. WiMAX
Ready to make the connection?
Why WiMAX, when we are already hip-deep in wireless broadband schemes? Well, given a newly gelled standard and a boatload of backers including Intel Corp. Sprint Nextel and Cisco Systems, WiMAX could actually deliver the broadband goods after decades of proprietary wide-area broadband wireless failures.
Based on the 802.16 family of standards, WiMAX theoretically can deliver as much as 40 Megabits per second at a distance of 10 kilometers. That trumps 802.11x cousin Wi-Fi's capabilities and could therefore be used for wider metro consumer deployments and backhaul services.
The first consumer WiMAX network is already up and running in South Korea, and stateside, Sprint Nextel has announced trials of the technology.
That said, WiMAX does face more than a few challenges, most notably pressure to get out of the gate in time to compete with emerging cellular wide-area broadband technologies EV-DO and HSDPA. —KB12. Comcast Corp.
Wielding its kingly might
With its position as the largest MSO in the United States, Comcast Corp. wields kingly clout in the cable kingdom. The Philadelphia MSO now claims north of 8 million cable modem subscribers, and it is adding to the broadband goodness by recently boosting its tentpole high-speed Internet service speed to 6 Mbps. On the cable telephony front, its voice-over-IP service is now getting off the ground, and, despite some hitches, it could reach a quarter-million digital phone subs by the end of the year.
To complete the service play, Comcast recently joined fellow MSOs Time Warner Cable, Advance/Newhouse and Cox Communications Inc. in partnering up with Sprint Nextel to add cellular wireless to the service mix in 2006.
Other signs of creativity include a deal forged recently with CBS Corp. to offer several popular television series—including CSI: Crime Scene Investigation, NCIS, Survivor and The Amazing Race—on-demand just hours after their initial broadcast for 99 cents a pop.
For Comcast, it is good to be king. —KB13. Portable video
Is that 'Lost' in your pocket?
Apple added content fuel to that fire when it struck a deal in October with The Walt Disney Corp. to offer iPod customers $1.99 downloads of hit television shows including "Lost" and "Desperate Housewives" via the iTunes site.
Looming on the horizon still are efforts such as mobile chip giant Qualcomm's MediaFlo project and a DVB-H based effort fielded by cell tower provider Crown Castle. Both would use licensed wireless spectrum to beam video to wireless devices in either unicast or TV-esque broadcast formats.
But handhelds aren't the only venue for the mobile video crowd. Another prime target is the backseat of Joe Consumer's minivan, and Comcast Corp. and DirecTV are both fiddling with products aimed for that ride. —KB14. 'Over-the-top' video
Put that in your pipe...and watch it!
The sudden spikes in speeds offered by cable and DSL connections coupled with the consumer desire to watch what they want, when they want, have proven to be a perfect storm for so-called "over-the-top" video services, which deliver content over the Internet to consumers without much direct involvement with the company providing the connection.
Last year at this time, much of that discussion involved companies like Akimbo, which is using specialized players and specially-outfitted PCs to deliver a massive video library. Now, others are getting into the act, with new announcements coming by the week. Disney/ABC, for example, is offering prime, portable fare through Apple's new iTunes service. AOL, meanwhile, hopes to give TV Land a run for its money with "In2TV," a service that will feature full-length episodes from series such as Welcome Back Kotter and Growing Pains.
These "over-the-top" moves, combined with traditional VOD, are transitioning television from a "browse" to a "search" model, a popular observation from Sanford C. Bernstein Analyst Craig Moffett. —JB15. Verizon Inc.
Angling to become an even bigger broadband player, Verizon Inc. is moving near the speed of light in its deployment of the FiOS fiber-to-the-premises platform, which now stretches into 15 states and is reaching north of 12 percent penetration on average in its 35-market base. It plans to reach 6 million homes passed nationwide by the end of 2006.
At the same time, the telco is unveiling a companion FiOS TV service, starting with the Keller, Texas market. The service sports more than 330 digital channels, with more channel additions planned in 2006.
Verizon also scored a significant win when the Federal Communications Commission approved its acquisition of MCI, which will give it a major nationwide backbone to further its broadband services presence. —KB16. Broadcom Corp.
Elevating its silicon status
There is little question one of the biggest suppliers of the silicon hearts that beat inside a plethora of broadband devices is still a major player in the telecommunications ecosystem.
Broadcom chips power much of the cable gear deployed today, from cable modem termination systems to modems and set-tops. That includes a new reference design unveiled this fall aimed squarely at the white-hot voice-over-IP market.
And the company has been busy snacking on new technology acquisitions, the latest of which is Athena Semiconductors Inc., a fabless semiconductor outfit that specializes in mobile digital television tuners and Wi-Fi technology.
But the chip giant is not without enemies, and lately top on its list of sparring partners is mobile chip giant Qualcomm Corp. Broadcom has filed suit claiming Qualcomm has used unfair licensing practices in the mobile WCDMA technology market.
Given Broadcom's strong punch, it will be a match worth watching. —KB17. DirecTV
Turned on to hi-def
While the world waits to see whether DirecTV will replicate in the States the iTV success reaped by BSkyB abroad, the largest U.S. provider of DBS services will certainly apply pressure with its aggressive HDTV plans—four satellites capable of expanding its HD slate to 1,500 local and national channels.
That strategy will line up DirecTV to win more business with high-end, high-paying customers, rather than spending time picking off the low-hanging (and high-risk) fruit and customers who churn at the drop of the hat. —JB18. In-house IPGs/navigation
There's no place like home
It used to be that integrating with the electronic program guide was one of the three gating items that prevented the quick deployment of new interactive applications. (The other two were the conditional access/encryption gear, and the billing system.)
Then something changed: Two of the big operators made moves to bring their guide activities fully in-house—in part, to streamline and quicken the pace for new application launches.
There's Comcast, with its "GuideWorks," an effort heavily populated by the former employees of TVGuide—which Comcast built through a joint venture with the former Gemstar.
Then there's Time Warner Cable, with its "Mystro Digital Navigator"—one of the more active remnants of what used to be the MSO's "everything-on-demand" platform. What's cool about the "MDN," among other things (guides are so hard to describe; you sort of have to see them) is the idea of a "mini guide," which can be invoked from within a TV program, to see what other shows are coming up on that channel.
What's cool about the GuideWorks activities is what appears to be a heavy focus on using video to promote Comcast's growing slate of on-demand fare—instead of text. Makes sense to us.
Neither platform has yet launched, but both continue to be efforts worth watching. Looks like 2006 will be "the year." —LE19. IPTV
It's just plumbing...with cachet
Puh-lease. Is not VOD a two-way experience? How about the electronic program guide?
Here's what's really happening: SBC is plumbing its network with VDSL, connected over 3,000-foot loops to fiber nodes using GigE, so that participating homes can get downstream speeds of 20–25 Mbps. With that bandwidth, SBC can deliver four streams of digital video, including one HD stream, plus broadband, plus voice.
The video portion of that plan is the IPTV. Simple as that.
Could cable deliver video-over-IP—meaning video over cable modems? One operator already is: Time Warner Cable, to 9,000 participating homes in San Diego. To those homes, TW's analog tier is digitized, compressed, and unicast to cable modems. Technically, it's IPTV, although it's branded "Broadband TV" in San Diego.
Ditto for Comcast, at least in the backbone. Dave Fellows, CTO of the number-one MSO, is fond of saying that he'll send over a billion streams of video-over-IP this year. He's referring to Comcast's big, honkin', 40 Gbps fiber backbones, connecting VOD titles to headend video servers.
And, sorry, blaming the marketers for not getting the message out won't do much to dampen the IPTV hype machine. Winning will require a grass roots mentality.
Repeat after us: IPTV is plumbing. IPTV is plumbing. IPTV is plumbing. Then figure out a way to say it to everyone in your neighborhood, especially if you live in geographies served by SBC. Grass roots. —LE20. Switched video broadcast
Giving only what you want
Way back in the days of the last telco video insurgence—circa 1995—cable technologists used to sniff at switched broadcast. "Gold plated!" they cried. "Only necessary for those with bandwidth issues!"
Uh-huh. And here we are, a decade later. Telephone companies are still thinking the switch is the way to go...and so are an increasing number of cable operators.
The fact that our MSO-side secret rankers helped to vote switched video broadcast into a number 20 position this year makes it all the more clear that bandwidth conservation is a big priority.
Plus, it just makes sense, on some levels: Only send down the channels people specifically ask for (with the remote), not everything. If nobody is watching the macramé show in Dutch, don't waste the bandwidth in getting it through the pipes.
So far, the switched video tests haven't gone much beyond tests. But as bandwidth becomes more and more pilfered by services with fat needs, like HDTV, technologies like switched broadcast are going to be more heavily scrutinized.
There's another way to look at it, too. Switching is most efficient on lightly-viewed fare, not heavily-viewed networks. This could lead to some programmer angst, down the road: "If I'm on the switch, does that mean my stuff stinks?" —LE21. Cisco Systems Inc.
IP here, there...everywhere
For years, Cisco Systems Inc. and its CEO, John Chambers, have been out evangelizing the all-IP religion—and with the boom in voice-over-IP, IPTV and IMS, it appears the rest of the telecommunications industry is coming to worship at that alter, too.
That could well put Cisco in a position to grab for the collection plate with its portfolio of IP-centric network products. In cable, Cisco still holds the lead in CMTS units, even as its softswitch and routers gain in popularity among network operators of many stripes.
And don't forget Cisco owns Linksys, the popular home networking products subsidiary that is active in wireless and wireline routers.
Then, just at our deadline, Cisco came forth as the winning suitor of Scientific-Atlanta, inking a $6.9 billion deal to acquire the second-largest supplier of digital cable set-tops. —KB and JB22. Cox Communications
Pretty good privacy
It's made Qwest look just plain bad in areas like Phoenix. Now, Verizon is trying to turn the tables on the now-private Cox with its fiber-fed FiOS platform. The industry is waiting to see how Cox will respond in kind.
Although Cox has been considered a fast follower among its MSO peers, that's not to say it can't take innovative steps on its own. It remains the prime example for how operators can find success with commercial services. On the consumer front, its championing of the "OnRamp to OCAP" platform also deserves praise. —JB23. Digital simulcast
No longer is Charter's Long Beach system the poster child of digital simulcast, a technique whereby the analog tier is replicated in the digital domain. It's a long-term strategy toward the all (or at least mostly) digital end-game that will give operators the ability to recapture valuable spectrum for other services.
MSOs of all shapes and sizes now have it in the field and plan to expand on it aggressively in 2006. —JB24. 'Bedrock'
Provisioning the future
The need for some kind of "bedrock" arose after Comcast began assimilating the former AT&T Broadband (and before that, Tele-Communications Inc./MediaOne) properties into its domain. On the surface, it was a no brainer: Find a way to hook up new data and voice customers in a consistent way, one system to the next.
Tactically, though, forklifting two working provisioning systems, in favor of a new, unified approach, was sort of like replacing your own central nervous system. Twice. Imagine being the poor soul whose job it is to tell a system manager—any system manager—that you're from corporate, and here's what's going to happen. Ouch.
Bedrock specifically did not touch the billing system, or the interfaces used by employees to add new voice and data customers. It did touch operational support systems and all related sub-systems. That meant around 100 different types of customer premise equipment (CPE), and 20 major systems and network elements, involved technologists say. It took two years, and a mind-numbing amount of planning and testing, but Bedrock's first two missions are accomplished. Right now, about 9 million Comcast customers are served by it, behind the scenes.
Video is next. Once that's done, Bedrock can join the ranks as a type of "cross-platform middleware," designed from scratch for the back office. —LE25. BigBand Networks
Strike up the bandwidth
Its Cuda CMTS line has proven popular, and with the addition of a modular CMTS, BigBand can offer DOCSIS and video service on the same QAM channels—and it can play nice with future channel-bonding schemes cable technology brains are now working on to further extend the bandwidth of the DOCSIS platform.
And then there is switched broadcast, BigBand's longtime technology baby that could eventually provide big bandwidth savings in the last mile for cable operators and telcos alike. —KB26. CHILA
Behind the acronym
All together now: CableCARD Host Interface Licensing Agreement. CHILA. It's an acronym pronounced as a word, as in, rhymes with "lila."
What the heck is it, besides a marvelously incomprehensible acronym? Short version: CHILA is a fast track for consumer electronics companies to produce two-way "digital-cable-ready" products. That means they're "cable-sanctioned" outside of the wider, and much more laborious, two-way plug-and-play negotiations—which hit a three-year anniversary at the end of this month.
So far, four companies are taking the CHILA fast track: Samsung, Panasonic, LG Electronics, and Digeo.
In August, Samsung became the first CE manufacturer to receive certification from CableLabs for its two-way, CHILA-based HDTV. Although the news release didn't seem to score very much coverage, it will likely be remembered as a big deal of the "digital milestone" variety. It's a first, and a fairly big first: A two-way HDTV, with security (albeit not "downloadable" security), that includes OCAP middleware.
CHILA-based TVs and HDTVs are expected to hit retail in a noticeable way next year. The consumer angle on this is much sweeter than the existing, unidirectional HDTVs already in the market. Why? Because they can innately support cable's two-way product suite—including VOD and the guide—without the need for a set-top box. Hallelujah! —LE27. SBC Communications
Moving ahead...at 'Lightspeed'
The $4 billion Project Lightspeed is in fact starting to accelerate, with plans to deploy fiber-to-the-home or fiber-to-the-node connections reaching 18 million homes in SBC's 13-state territory by 2007. This fall, it tapped Scientific-Atlanta, Motorola and Microsoft Corp. to supply IP video gear and software respectively for the companion "U-verse" IPTV service, which will start transmitting probably in early 2006.
And if all of that wasn't enough, SBC also managed this year to gobble up its parent, receiving approval to acquire AT&T Corp. While a shadow of its former self, AT&T will further extend SBC's reach with significant nationwide and global backbone network assets and a strong enterprise customer base.
Then there is a little subsidiary called Cingular Wireless, which SBC jointly owns with BellSouth. Recently, all three tapped Lucent Technologies to supply IP Multimedia Subsystem (IMS) gear, moves that could signal more converged wireless-wireline products on the horizon.
With all of that, SBC may come to stand for Super Bell Competitor. —KB28. BellSouth Corp.
Stirring up speed now, video soon
It may not have as clear of a fiber play as telco big brothers SBC and Verizon, but BellSouth still figures as a major broadband player.
Hurricane season may not have been kind to operators in the Southeast, but BellSouth Corp. still managed to whip up a storm of broadband business in 2005. The Bell streamlined its digital subscriber line offerings and pricing, and that drove strong new customer growth, with more than 205,000 customers added in the third quarter—this despite the blow dealt by Hurricane Katrina.
In October, BellSouth announced a partnership deal with Yahoo! Inc. to create a co-branded digital subscriber line-based service to its nine-state region. Plans are to roll that out to new subscribers in early 2006. And BellSouth also offered industry watchers a peek at its plans for television service, announcing it will launch an IPTV service in mid-2006 following field trials this year. —KB29. Preparing for the All-Digital Deadline
Over-the-air television broadcasters got their marching orders in October: Get off your analog spectrum by April 7, 2009. What does it mean for the home team? Digital must-carry and retransmission consent squabbles, to be sure.
But as the larger, governmental "digital transition" goes, cable is arguably in a somewhat angelic position. Witness the across-the-board digital simulcasting deployments that are already well underway, across the industry. That's all-digital.
Still, the mention of "all-digital" necessarily elicits the question of whether that means "no analog." On the one hand, reclaiming as much analog spectrum as possible is high on the "good idea" list, because of the never-ending need for more bandwidth, coupled with the increasingly fat nature of digital services (think 80 channels of HDTV here).
On the other hand, what if you're the only guy in town who can say this: "You want analog? I got it. Oh, you want digital? Got that, too. HD? No problem." The mind reels. Post-deadline, it's hugely possible that the cable industry will indeed be the only multichannel video provider that can serve all TVs in a home (including the analog ones) without any extra gear (like the digital-to-analog converters the government wants to subsidize at $3 billion or so).
Engineering need, meet marketing wish. Let the strategizing begin.
How will it turn out? Our best guess is that operators will hang on to a handful of analog channels—call it a "lifeline" tier—while pushing that spectral starting point for digital traffic lower and lower below 550 MHz.
Bust our chops for this in 10 or 20 years, but we're going to take a stand here and say that "all-digital" as equivalent to "no analog" won't happen in our lifetime. —LE30. TiVo Inc.
Will Comcast save its bacon?
2005 was a classic good news/bad news year for TiVo. The bad news: DirecTV said it would stop marketing receivers with the TiVo service in favor of one from corporate cousin NDS. The good news: TiVo struck a deal with Comcast that should begin to bear fruit in 2006, if customers can be persuaded to fork over a few more dollars for those extra bells and whistles.
Despite its ups and downs, it's tough to dis' a company that is more than a brand, but a verb. Its "cool quotient" still gives it significant mileage. Plus, it was also early to see the importance of portable video with the Tivo2Go service. —JB31. EchoStar Communications Corp.
Rebels with a cause
This fall, the Englewood, Colo.—based EchoStar unveiled PocketDISH, one of the first industry forays into portable video. A portable handheld device, PocketDISH can plug directly into DISHNetwork digital video recorders via a USB connection and download stored programs for viewing on the go.
In August, EchoStar gave new meaning to the concept of TV multitasking when it unveiled a new mosaic channel feature on OpenTV-based set-tops that allows customers to choose and view six mainstream TV channels simultaneously.
Plus, you gotta love any company that fields a promotional stunt offering any town in America 10 years of free programming if it changes its name to DISH. Now that's some major dish. —KB32. Motorola Inc.
For years, Motorola Inc. has been half of the great cable gear duopoly, and now it stands to dial in even more clout as the industry edges toward a union with cellular telephone service.
That's because Motorola also happens to be the number-two wireless handset maker in the world, and it recently boosted its handset design presence with the wildly popular RAZR handsets. Seeing the converging vectors of its cable and wireless business, Motorola has created its Seamless Mobility initiative to wed wireline and wireless technologies into merged product offerings. It has already partnered with Avaya and Proxim to field one of the first Wi-Fi-cellular roaming systems, which could eventually offer cable operators a way to directly link their networks to cellular service.
Oh, and it isn't exactly a slouch in the traditional cable gear department, either.
It also scored a major win on the IPTV side, landing a contract with SBC Communications. —KB33. Advanced codecs
Doing more with less
They, however, will make more of a short-term impact with DBS service providers and the telcos.
One couldn't swing a cat at the recent TelcoTV conference in San Diego without hitting something that had MPEG-4 printed on it. In fact, many manufacturers that make equipment for the cable industry were on hand with product "optimized" for IPTV, which simply meant it supported advanced codecs. —KB and JB34. C-COR
Geared up for the next 50 years
As it enters its 53rd year, C-COR appears to be an industrial example of the one about how life just keeps getting better in your 50s. Maybe that massive acquisition spree, between 1999 and now, wasn't a mid-life crisis after all.
Or maybe it was that "suh-weet" Global IP Summit in Barcelona, Spain in June. (Heads up, the next one is in Athens next June. And they don't mean Athens, Ohio.)
Either way, it's kind of hard, anymore, to think of C-COR as that amplifier company in Happy Valley. (That's Pennsylvania code for State College, home to Penn State.)
Who all became part of the C-COR machine? A baker's dozen of fully digested companies. A brief review: nCUBE. Optinel. Stargus. Lantern Communications. Alopa Networks. Philips Broadband Networks. ADC. Aerotech Communications. MobileForce Technologies Inc. Worldbridge Broadband Services. ACSI. Silicon Valley Communications. Convergence.com . Whew.
According to David Woodle, C-COR's plain-talkin' CEO, the plan now is to put the augmented machine to work, helping cable operators to integrate and launch advanced services. With rebuilds and upgrades waning, and capital budgets predictably strained, it seems a plausible time to be plumbed to sell more than plant electronics. —LE35. Liberty Global
Keeping the world going
Plus, in Japan and in Europe, Liberty faces anywhere from two to six broadband competitors, all selling DSL, and all with different pricing. Some go low—256 kbps—some go as high as 50 Mbps.
Nonetheless, churn rates continue to decline, said Liberty Global CTO Tony Werner earlier this year. In Europe, broadband churn is roughly half that of the U.S.; in Japan, even triple-play churn hovers at a half a percent per month. —LE36. Scientific-Atlanta
Get me rewrite!
Okay, I had this lengthy love letter penned for S-A, giving them big kudos for their recent successes entering the telco TV arena with SBC and their general leadership with cable set-tops, set-top applications, digital video recording, and broadband transport.
Then this monkey wrench that goes by the name of Cisco came along and agreed to buy S-A for $6.9 million. The big fish is being eaten by the whale.
Well, we could've taken them off the list all together, but the deal's not closed yet, so I'm keeping them in their spot for old time's sake.
In my experience, S-A and the people who work there have always been a class act. We don't expect that to change as it's annexed to the house that John Chambers built. —JB37. Microsoft
An important 'OCUR'-rence
Add this one to the vocabulary list of your cable secret decoder ring: OCUR, which stands for Open-Cable Unidirectional Receiver. (And yes, Microsoft Word stands at the ready to "help" you, by immediately changing it to "occur,"—just as it helpfully changes "HSI" into "HIS." Gee thanks.)
The OCUR development, announced by Microsoft and CableLabs, hit the news wires just as the Broadband 50 was going to press. But here are the basics: Watch for Microsoft Home Media PCs to be sold next year with the capability to descramble and display premium video content. How it works: Plug the cable wire into an OCUR device, then connect it to the PC. Slide in a CableCARD. Once the card is authorized, sign up for HBO, or Showtime, or other premium content. Watch it on the PC.
The deal was long in the works, but severely addled by very real concerns about the very real fact that a PC isn't a TV. PCs are much beefier, and much more "open," and have many more digital things, like with hard drives, hanging off of them.
Yet, in order to make multichannel video to the PC a sustainable business reality, content delivered to a PC had to perform in the same way as it did on a TV. Tricky. Yet, OCUR appears as big a first step as we've seen yet. —LE38. Digeo Inc.
Rooms with a view
Although there are other products out there, Digeo has become the gold standard for intuitive navigation and the multi-room digital video recorder.
Perhaps that shouldn't come as a big surprise to anyone, considering that's exactly what the company's primary focus is.
The company made a key decision several years ago, back when it was known as Rearden Steel, and before it became part of Digeo. Rather than securing conditional access licenses and building boxes on its own, it carved out direct deals with the cable CA duopoly providers—Motorola and Scientific-Atlanta. That removed a monster hurdle from its path and helped to speed Digeo into the marketplace.
Those decisions are now paying dividends. At press time, more than 225,000 Moxi Media Centers were deployed by operators such as Charter, Adelphia, BendBroadband, NewWave Communications, Sunflower Broadband, Service Electric Cablevision, and Eagle Communications. It also has a relationship with cable's big dog, Comcast.
It's also an Emmy winner. And Digeo is also positioning itself to be a force at retail, and has hired two former Sony execs (CEO Mike Fidler, and President and COO Greg Gudorf) to spur that strategy. —JB39. Harmonic Inc.
Boldly doing the smart thing
You just gotta love a known cable technology provider that steps boldly into suppliership of a telephone company—then has the guts to say they're backing off, because the margins are crap. That's what came out of Harmonic Inc.'s most recent earnings call, when the "V" word came up—Verizon.
The background: Harmonic had been supplying optics to Verizon, through Tellabs. Then, Verizon went into action to find multiple suppliers. To quote CEO Anthony Ley: "The forward pricing on this is such that we don't find it very attractive...that's just life." Considering that the Verizon relationship produced 13 percent of overall sales for the quarter, it seems a notably bold choice.
Plus, Harmonic's ongoing R&D is producing some fairly nifty-sounding stuff: A coarse WDM device, targeted at helping the skinny reverse path, and a multi-format advanced video encoder. —LE40. Networking over coax
Hook me up!
Home networking is evolving from simple device sharing to whole-house multimedia storage and playback systems, and that means bandwidth in front of the modem is getting a whole new focus. To provide the throughput needed to ship around video, a crop of companies have emerged offering high-bandwidth Ethernet over coaxial cable networking technology, including Coaxsys Inc. and Entropic Inc.
Early market player Coaxsys, which has up until this year focused on IPTV network players, expanded into the cable and satellite TV space this spring with products sporting 100 Mbps throughput over coax.
But Coaxsys isn't alone. Chipmaker Entropic also is starting to ramp up its Ethernet over coax product line, and it is one of the driving forces behind the Multimedia over Coax Alliance (MoCA), which is targeting PHY rate throughputs of 270 Mbps. —KB41. HomePlug vs. BPL
High on voltage
In other words, it sure seems to us that the whole idea of "Access BPL," where the "BPL" stands for "Broadband over Power Lines," is intertwined with "HomePlug" in such a way as to be slightly deceiving, at least on the surface.
HomePlug is a handy way to offer whole-house broadband, just by plugging into a power outlet on a wall. Access BPL is different—it's how utilities want to offer broadband, over their physical plant, to homes.
If you're Consumer Jane, and all you really want is a fast, reliable connection, for a reasonable price, and someone tells you that you can connect to broadband just by plugging into any power outlet in your house—using a HomePlug device—do you really care where that broadband speed came from? Probably not.
Hence, we're putting a stake in the ground on this one, too: HomePlug trumps Access BPL, at the consumer level. —LE42. OpenTV
Chiddix in charge
There are three reasons why it's hard not to keep a trained eye on OpenTV. One is the presence of industry technology statesman Jim Chiddix, at the helm.
Two is that hard-to-ignore deployed base of OpenTV middleware on 61 million digital set-tops, worldwide.
Three is all those interactive patents—which seem, on the surface, to be so darned similar to some of the key attributes of the North American cable industry's "ETV" (Enhanced Television) and OCAP (OpenCable Applications Platform) initiatives.
If history is any guide, Chiddix is just too inherently classy to let patent scuffles crush the potential to work closely with North American cable operators. Plus, with Chiddix as the former CTO of Time Warner Cable for so many years, he can probably see both sides of the situation far more clearly than the rest of us.
That same logic can be applied to the little (ahem) dispute OpenTV was working to resolve with Liberate...before Comcast bought Liberate.
In comments to financial analysts on Nov. 7, Chiddix expressed refreshed enthusiasm about the overall interactive TV sector. "It's a psychological shift...interest levels have gone beyond 'nice to have' to real needs." Plus, he said OPTV received more than 20 requests for proposals since the summer, "which is a pace we haven't seen in years."
He also hinted at fresh cable deals in the works, here in the States—but he refrained from imparting any details. Our best guess points to some of the Motorola boxes in some of the Adelphia properties that Time Warner Cable subsumes. But that's just a guess.... —LE43. Tandberg Television
Urrrp! I can't believe I ate the whole thing!
Tandberg also has continued to score well with its bread-and-butter encoding business, landing the initial phases of a contract to deliver MPEG-4 compression systems to DirecTV Inc. in support of the DBS provider's ambitious HDTV plans. —KB44. Texas Instruments
Don't mess with them
Its latest salvo into the eMTA arena is the Puma IV, an architecture that combines its traditional DOCSIS stuff, digital signal processor technology and Telogy VoIP software all on one chip.
It then followed with enhancements that incorporate cellular codecs and a "Wideband" reference design based on the forthcoming DOCSIS 3.0 spec, which was important enough to get the No. 3 spot on this year's Broadband 50.
The addition of cellular codecs is important, too, as cable operators noodle the use of new dual-mode cellular/WiFi phones. TI insists the embedding of cellular codecs alongside voice codecs specified by PacketCable (Broadcom's BroadVoice 16 codec, and Global IP Sound's iLBC platform) will help to avoid transcoding drops. —JB45. The VOD squad
Armed and ready
All three still belong here, but several others also belong in the conversation, as well. Broadbus Technologies, for example, definitely belongs in the mix. If you take a look at this month's VOD deployment wallchart, you'll notice it has many more feathers in its cap.
Arroyo Video Solutions is also making some progress, as well, and we expect to hear much more about its wins with cable operators and telcos in 2006. Entone, meanwhile, is making some serious hay on the telco side. Its new Armada system, which places VOD assets on the system based on their "popularity profile" seems like a winner as on-demand grows the so-called "long tail" of content. Kasenna, after staking its claims on the telco market, is also making some moves in the cable sector (again, check out the new chart).
Still, these "newer" players still have an uphill battle to fight, especially in the cable sector. Some of their success will hinge on what Comcast does with its Next Generation On Demand (NGOD) initiative. Although the MSO has deployed it in South Bend, Ind., we're interested to find out whether Comcast will also use it in legacy VOD markets, or reserve it just for greenfields. —JB46. AgileTV
Open up and say 'ESPN'
Ok, ok, so maybe we were a little skeptical about a remote control that understands the human voice. Until we tried it. At this year's Consumer Electronics show, we engaged it in a Stump the Chump attempt—but the Agile remote (branded "Promptu") turned out to be no chump at all.
In a live demo, with dozens of MSO-side witnesses, we asked for what we thought was a show too arcane for retrieval: PBS' "Victory Garden." And waddaya know. Amid the clangs and chatter that is a mobbed show floor, the remote plucked several instances of "Victory Garden" from the electronic program guide. Just like that (insert finger snap here). No big deal.
How it works: You talk. The Agile remote grabs your words, digitizes them, squeezes them down, and zings them up to an Intel-based server, at the headend. Your words are compared against a database for matches, then applied against the electronic program guide. The results show up on your TV screen.
And it all happens in less than a second. Pretty neat.
On the integration side, the Promptu remote and nav system was tested this summer to work with VOD servers from SeaChange, tied to Motorola digital set-tops.
2006 could be a big year for Agile, if its early trials hold up. Sunflower Broadband is a tester, and wants to execute a commercial launch to its 30,000 subs in Lawrence, Kan. next summer. Having Comcast in its corner doesn't hurt, either.
Recognizable faces on Agile's board of directors: Cable venture capital smartypants Gary Lauder, as well as Guy Sucharczuk, the unassuming leader of Aurora Networks. —LE47. GCI
One cool operator
While cable operators are just now starting to talk about extending to cellular wireless, GCI already has it, with a GSM-based service offered through cellular provider Dobson Communications Corp.
Similarly, GCI also has gone all-digital—not just simulcast—in Anchorage and Fairbanks, with plans to add Juneau by the end of this year. It also rolled out a video mail product this year, offering broadband customers a way to send video clip messages to friends and loved ones.
The company is going through reorganization this year, but so far, its projections put GCI on a continued growth curve. So in a place renowned for being cold, GCI remains a cool operator. —KB48. Pace Micro Technology
Where's the 'Chattanooga'?
To its credit, Pace entered 2005 with what appears to be the right ingredients and products that MSOs need today, rather than three years down the road.
Realizing the growth of digital simulcast and cable's plans for an all-digital (or mostly-digital) future, Pace unleashed "Chicago," a bare-bones, digital-only set-top. It then followed with "Tahoe," a box with high-definition and digital video recording capabilities. In September, it also became just the second set-top maker to win certification for a model (the TDC775D) that supports the all-important DOCSIS Set-top Gateway (DSG) platform, which will give operators a standards-based pipe to deliver messages and program guide data to the set-top. Later on, the DSG likely will support the industry's downloadable conditional access system (DCAS) project (for more, see #5 of this year's list).
Pace then spread its wings a bit by going after the multimedia terminal adapter (MTA) market.
Of course, how Pace finishes in the long-run will be determined by purchases and deployments of this new equipment. But we can't help but point out that we inadvertently heard a high-ranking executive at a top 10 MSO remark at the Pace booth at the 2005 National Show that it appeared to him, after seeing the new gear on display, that the Pace folks "have really got their act together now." Guess we can't argue with that. —JB49. Real Networks
Yes, in San Diego, Real's advanced compression codec squeezes 80 formerly-analog streams down to 770 kbps, then winds its "Helix" DRM around them, to keep copyright owners happy. Involved technologists say they like how multichannel Real is with its solution. Plus they like that most PCs already have a Real player—or at least people are pretty well conditioned to go get it.
Whether or not Real's "Helix" DRM advances to the cable masses has everything to do with whether multichannel, digital video, delivered over the IP path to the cable modem, becomes a budget item for cable providers in 2006. So far, it doesn't seem to carry quite as much oomph, as, say, IMS (IP Multimedia Subsystems), or DCAS (Downloadable Conditional Access).
But that's just one piece of Real's cable strategy. The others—think Rhapsody and games here—could help to carry the effort until the video timing is more...ahem..."real." —LE50. Sunflower Broadband
The most recent example of this was its "pre-deployment" deal with AgileTV, which will voice-enable Sunflower's navigation system.
The Lawrence, Kan.-based MSO was also among the first U.S. cable operators to resell mobile voice services (through Sprint). Later on, of course, we learned of Time Warner Cable's similar test in Kansas City. Then there's that huge consortium of Sprint, Time Warner, Comcast, Cox and Advance/Newhouse to think about. Guess we're just trying to say that Sunflower tends to be an aggressive creature of broadband.
Sunflower was also one of the early MSOs not called Charter Communications to put Digeo Inc.'s technology into the field, which has earned big raves for its DVR, navigation and interactive television applications. —JB