Reports of cable telephony's demise may have been greatly exaggerated, especially outside of the U.S., where different dynamics are at work, making the service an attractive offering in cable operators' multi-service arsenal.

One case in point is cable operator A2000 Cable Television and Telecommunications, a Netherlands-based joint venture between United & Philips Communications (UPC) B.V. and US West International formed back in July of 1995. Making news for contracting with equipment supplier Tellabs for $100 million worth of telephony gear and associated equipment and services over the course of five years, A2000 is offering an unspecified number of subscribers not only telephony, but also a full package of basic services, impulse pay-per-view, and Internet access service, all riding on the same hybrid fiber/coax network.

Though the MSO declines to reveal how many telephony subscribers it has, all totaled, the company has 550,000 cable TV customers in the greater Amsterdam area, of which 120,000 are currently capable of receiving the full menu of services. A2000 is currently offering telephony in the Purmerend, Zaandam and Hilversum franchise areas, and plans to launch commercial service in Amsterdam proper early in 1998. For telephony only, the published rate for a one-party, residential service is about $12.25 U.S. per month.

Upgrading for reliability

The HFC network providing these services is a three-layer cake, says A2000's Managing Director, Jack Methven. The first layer is a backbone, self-healing, 14-hub SDH (synchronous data hierarchy) and analog supertrunk ring structure; below that is a fiber ring structure that connects 16 fiber nodes, each of which passes 800 homes. As for the RF portion of the network, the forward path is a full 860 MHz; the reverse is 5 to 65 MHz.

Methven estimates that the cost of upgrading the network to prepare for telephony comes in at less than $100 per home passed. "We replaced a dual 450 MHz trunk with fiber; the coaxial plant was left fundamentally intact. And then there was an amplifier platform replacement — we replaced all of the active elements in the network with Philips Broadband Networks' Diamond Net product."

While Tellabs was not on A2000's original "short list" of cablephone equipment suppliers, according to Methven, after conducting a technical trial of the manufacturer's Cablespan 2300 Universal Telephony Distribution System, the MSO was impressed enough to purchase the hardware, as well as Tellabs' Cablespan EMS element management system.

Some tweaking was necessary to customize the equipment to a European market. Because of the unique nature of the subscriber environment in the Amsterdam area, Tellabs and A2000 worked together to modify the manufacturer's RSU (remote service unit) into a unit more suited to the planned service environment. To an uninformed observer, the market in Amsterdam looks as if it's composed of dense, three- and four-story apartment blocks. But unlike in the U.S., where there is often a common terminal in the basement that connects all the residents in a building to phone service, in Amsterdam, each apartment is more like a free-standing home, in that each has its own television, its own telephony, and its own power services fed from a location out on the street. Because of that, the RSUs, designed to be mounted on the outside of the dwelling, needed to be mounted in each home. Now called an RiSU (or remote in-home service unit), the box underwent a series of modifications in size, aesthetics and functionality, and facilitates the now-integrated delivery of cable TV, FM radio and telephony.

The RiSUs also have battery backup capability, so that if there's a failure in commercial AC power, the unit can run off the battery inside the unit. Because of regulatory and cost issues, A2000 decided to go with local powering off of the AC mains, which capitalized on inexpensive battery backup, as well as the high reliability of the local power grid.

And by next summer, Tellabs will be adding a data port capability to the RiSU so that in-home access to the Internet and other on-line services will be available through the unit, making it an integrated approach for data, voice, video and multimedia applications.

One-step provisioning on horizon

One of the biggest challenges cable operators face when deploying a service like telephony from scratch is managing the network and the service itself. A2000 is using a single network operations center to provision, monitor and control all of the active network elements for all of its services, as well as to perform "change management," or to manage any activity in the network to ensure that service is not interrupted. The NOC also performs the scheduling and completion of all preventive maintenance, and is responsible for the analysis of all service, technology and customer issues, says Methven.

One of the operator's challenges was to tie its operational support of the cable plant in with that of the telephony service, says Tellabs' Wayne Partington, group manager of product marketing and customer management. "A2000 was able to effectively define what its operational procedures were going to be, from the standpoint of, how do they take a service order, how does that translate into provisioning of the switch, the Cablespan equipment, and then the actual installation of the RiSU in the home," he says.

"I think the process going forward will be to try to integrate their higher order OSS with our Cablespan element management system to provide one-step provisioning and maintenance of the en-tire telephony service," adds Partington.

Being able to key in one command to handle complete one-step provisioning of the service is a model other MSOs should strive for, he notes, in that the number of personnel required to operate the network can be significantly reduced, thus lowering overall service costs.

Telephony-friendly climate

So, what makes cablephone work in the Netherlands, when results in the U.S. have been less than hoped for? There are a number of factors that make the market there more friendly to cable telephony, says Partington, including a high penetration rate for cable (A2000 has about a 95 percent penetration rate), and perhaps even more important, a regulatory climate which encourages competition.

Methven cites some additional factors. "The business fundamentals are strong, the capital costs and the demographics of the market, and subscribers' willingness to switch. And therefore, the revenue that is generated made it an attractive business opportunity. Also, there was a focus on the part of A2000's management to truly be an MSO."

Encouraged by its success thus far, A2000's cablephone momentum is not slowing down. "We are aggressively expanding the number of homes passed by a thousand a day," says Methven, "and we have plans in 1998 and '99 to increase our product offering breadth. We went into the market in July of '97 with a (telephony) product defined to attract the high-end user and the early adopter, to establish our name in the marketplace, and now, we'll come back into the market next year with products that are attractive to a broader range of the marketplace."