While debate over the technical viability and relative merits of cable modems and telco xDSL rages on, the real question regarding long-term strength of these competing technologies concerns their chances for becoming off-the-shelf components in the retail computer hardware market.
The cable industry scored a major success in this direction in early December with preliminary agreement among parties to the Data Over Cable Service Interface Specifications (DOCSIS) on key interfaces that had been the subject of intense contention within the operating community and among vendors. At the same time, telcos registered a somewhat lesser success by punting in their long-running dispute over digital subscriber line formats, choosing as an industry to foster standardization of two competing DSL systems, rather than deciding on one over the other.
Cable interests clearly acted with the greater sense of urgency, setting a quick turnaround for vendor responses to the proposed specs and winning preliminary support from some who said that standards-compliant modems might be on display as early as the NCTA convention in March. Telcos, on the other hand, seemed to insure a slower pace for sorting out the divisions over DSL, with four RBOCs solidifying backing for one format, while the rest of the industry pushed forward with the competing format on a much faster track to deployment.
But, despite its early lead in deployments and resolution of internal conflicts on specs, cable has its work cut out for it when it comes to winning computer industry backing for cable modems as easy-to-use, pre-installed components of PCs. After all, to date, the computer industry's support for modem technology has revolved around gear designed for use over telephone lines, and people still have a hard time conceiving of cable companies as providers of on-line connectivity.
One measure of the credibility hurdle cable faces is the volume of naysaying that continues in the face of commercial rollouts that are demonstrating robust performance and drawing strong customer support wherever cable modems are introduced. A case in point was the January issue of Fortune magazine, where columnist and investor Stewart Alsop devoted two pages to arguing that, as he put it, "Cable modems are a fantasy."
In contrast to such perceptions, the January issue of the newsletter Broadband Commerce and Technology reports that cable companies are now offering services commercially, at monthly rates of anywhere from $30 to $55, to a base of about 1.5 million households that have access to the services in the U.S. and Canada. Many of these service areas are just getting underway, but there's a household base of about 600,000 homes for service offerings that have been in effect since September or earlier, with some cable data offerings hitting penetration rates in excess of five percent of homes passed.
With this headstart, the cable industry has enhanced the prospects for high-speed data services with preliminary agreement on standards that promise to drive cable modem costs down and, eventually, to support distribution of the devices through retail outlets. "You can credit Dick Green with at least a minor miracle on this," said a source close to the negotiations, in reference to the president of Cable Television Laboratories, Richard Green.
Indeed, even in the days just before the Western Show, which had long been the target venue for announcing agreement on specs, there was considerable doubt over whether the coalition could hold together. As it was, Motorola Corp., a leader in early deployments and one of the five vendors selected for the final round of protocol choices by the industry working group, appeared willing to gamble that it could take a larger market share by working outside the standards process, though executives continued to stress their willingness to conform to whatever standard is finally agreed to.
Just before the Show, Motorola declared it would make its own specifications available to other manufacturers on a royalty-free basis, apparently hoping to redirect the MCNS process with a cost-driven market shift to its system as the de facto first-generation standard. "Motorola is putting all its muscle behind this product," said James Phillips, corporate vice president for the company. "We are fully behind the cable industry's standards-setting effort," Phillips said. "But we believe that part of that process involves the give and take of competition in the marketplace."
Participants in the data specification working group said they had distributed proposed specifications for RF (radio frequency) interfaces to the 95 vendors who are parties to the standards effort. In addition, they released network security and operations support system interface specs, leaving for further consideration a set of specs on modems that use telephone return paths in one-way cable systems.
So far, Bay Networks' LANcity division, Hewlett-Packard, General Instrument Corp. and Com21 have indicated they are willing to build modems that comply with DOCSIS protocols, which are to be offered on a royalty-free basis to spec-compliant vendors through the Multimedia Cable Network System group consisting of TCI, Time Warner Cable, Cox Communications and Comcast Corp.
But it remained to be seen how quickly other vendors would be able to adjust their product lines to conform to the standards, and how successful they would be in absorbing the costs of doing so in order to compete with aggressively-priced modems that are not standards compliant.
"The key question now, obviously, is what kind of support we'll get from the manufacturing community," said Dick Green. "We're very optimistic that it will be broad and deep."
That support hinges in large degree on manufacturer confidence that MSOs will purchase spec-compliant modems in large quantities, which will depend, in part, on whether manufacturers can meet the aggressive price targets set for the MCNS modems. "We're convinced they can meet the price targets," Green said.
There is strong evidence that some manufacturers will be able to meet the MCNS group's most aggressive price target in 1997, which is $250 per unit in volume shipments, even though the group has set a level of under $400 as the first-year goal, said Michelle Kuska, data modem specification project manager for MCNS and director of network technology at TCI Technology Ventures. "We've gotten very encouraging feedback from multiple sources that they'll hit our second estimated cost within the timeframe we envisioned for the first estimate," she said.
MCNS officials said they expect to see limited quantities of MCNS-compliant modems on the market before the year is out, with volume shipments starting in '98.
"I wouldn't be surprised if you see a working modem that looks and acts like it's MCNS compliant by the time of the National Cable Show (in March)," said David Fellows, senior vice president for engineering and technology at Continental Cablevision. "But it will take time to develop a system that is fully compliant with all facets of the specification, including the operations support system and security specifications."
MCNS modems could be available through retail outlets by Christmas of '98, Fellows added.
Prior to the Western Show, LANcity officials asserted theirs would be the first company to build MCNS-compliant modems. However, at press time, none of the participants in the process had revealed their production and pricing plans.
Comments on the proposed specs were due back at CableLabs by January 2. "We're looking at releasing a document in March that incorporates the comments, though we're not sure it will be the interim specification document at that point," Kuska said. "But it will be detailed enough to build to."
Once the process of clarifying all the gray areas and addressing questions raised by vendors is completed, the cable group will submit the interim specifications to various standards bodies for official designation as a standard, Green said. With key areas of controversy on modulation techniques now resolved between cable and the IEEE's 802.14 cable modem subcommittee, officials don't expect their recommendations to run into roadblocks, but it will take well into '98 at least for the standards processes to be completed, even if there is no major opposition.
Officials said they had picked their specifications with an eye toward ensuring ready availability of the technologies based on already working hardware. The media access control protocol, for example, which had been one of the most serious points of contention in the decision-making process, was developed by the group as a "middle-of-the-road" version of the various MACs under consideration, they added (see diagram, page 80).
But the interfaces were chosen with an eye toward the future as well, with hooks built in to support migration to ATM (asynchronous transfer mode) and other capabilities without requiring redesign of the underlying architecture. "Practically all HFC protocols are based on synchronous frames, so we're not that far away from being ATM friendly," said Mario Vecchi, senior vice president for network engineering at Time Warner Cable's Excalibur Group.
But he stressed that ATM is viewed as a physical layer solution, not an end-to-end solution at the higher media control and trafficking levels. "It makes sense that we should be able to migrate to ATM if the world at large is going in that direction," he said.
Meanwhile, the telephone industry appears to have a much bigger task ahead of it if it hopes to see DSL modems showing up in computer stores anytime in this century. Two years ago, the T1E1.4 subcommittee of the American National Standards Institute settled on discrete multitone (DMT) as the standard for asynchronous DSL applications, with all but one RBOC Bell Atlantic signing on, largely because, at the time, it looked as though DMT had essential capabilities inherent to it that the more market-ready CAP (carrierless amplitude phase) modulation technology lacked.
But since then, CAP vendors, based on innovations from system designer GlobeSpan Technologies (formerly AT&T Paradyne), have closed the functionality gap to where the differences are minimal. This presents a confusing situation to potential users of the technology, including the Internet service providers who are looking to exploit it.
One such company, MFS Communications subsidiary UUNet Technologies Inc., is moving to deployment of systems this year, but sorting through the options is no picnic, said Mike O'Dell, vice president of research and development at UUNet. So far, UUNet has found that CAP-based DSL systems perform best in some situations, while DMT systems perform better in others. "Whether the variations occur on an area-by-area basis, from one central office to another or, God help us, from one circuit to another, we don't know," he said.
"The question of how the technology will perform over real plant has not been resolved," O'Dell added. "So far, the net result of network qualification studies is that the percentage of lines that meet DSL performance requirements is not as optimistic as Bellcore would have us believe."
"There's a lot of bad copper out there," concurred Jim Michaels, president of GlobeSpan. "I think you'd be shocked at how little the LECs (local exchange carriers) know about the condition of their lines."
Telcos, which are still trying to define real-plant performance parameters in a series of industry-wide trials, have chosen not to wait on choosing DSL sides in the interest of sorting through the narrow differences. On the CAP side, US West, Nynex and Bell Atlantic are pursuing aggressive rollout schedules with announcements of early deployments expected any day, while Ameritech, Pacific Telesis, BellSouth and SBC Communications are pinning their hopes on DMT systems supplied by Alcatel. GTE, too, appears to be leaning toward DMT with a newly-expanded trial in the Seattle area pegged to that technology.
In late December, the four RBOCs backing DMT said they had completed contract negotiations with Alcatel for gear that should be ready for initial market trials by the second half of the year. "We strongly believe that DMT represents the most logical and cost-effective approach to introduce ADSL (asymmetric DSL)-based services," the companies said in a joint statement. "Furthermore, the teaming of Alcatel and our four companies will help with the rapid deployment of ADSL-based services in general by efficiently resolving any operational or technical issues that may arise."
The companies said they expect to have "thousands" of customers connected to ADSL links within the next year to 18 months, with more than a million customers anticipated by 2001.
While Alcatel, like other vendors, is preparing to introduce ADSL products supporting downstream throughput at 8 megabits per second later this year, the four RBOCs have chosen to move into commercial deployments using an earlier iteration of the technology, which can deliver signals at anywhere from 6 Mbps over approximately 6,500 feet of copper wire to 1.5 Mbps at 18,000 feet. This is a variable rate system, which means the speed adjusts to reflect the length of the links and other line conditions.
"We'll be offering service commercially at 1.5 Mbps downstream, and at 64 to 384 kilobits per second upstream," said Scott Smith, spokesman for Pacific Telesis. The company also expects to offer a symmetrical service at 768 kbps each way using systems supplied by PairGain Technologies, Smith said.
The symmetrical service plans further complicate the picture insofar as the technology, dubbed "HDSL" for high-speed DSL long before ADSL was commercialized, is based on the 2B1Q modulation technique used in ISDN. US West is also moving forward with HDSL offerings, and other telcos are expected to follow suit, owing to the commercial availability of the product and its relatively low price. (One vendor, TUT Systems of Sacramento, Calif., is set to roll out a variable rate HDSL system priced at $500 for the modem pair needed for each end of the twisted pair line.)
Meanwhile, the CAP juggernaut is in full sway, with backers finally winning their long battle for standards recognition in a recent showdown at ANSI. After failing, once again, to win working group support within the T1E1.4 subscommittee for a CAP standard, they succeeded in persuading the full subcommittee to set up a new working group devoted to CAP at a plenary session in November.
GlobeSpan officials said the move not only would speed market acceptance of CAP; it would also overcome a major impediment to the overall embrace of DSL, insofar as the DMT standard was written too generally to accommodate high-speed data requirements. "Nobody is building to the (DMT) standard when they're building for data applications, because the modems wouldn't be useful for data applications if they did," said Clete Gardenhour, director of marketing at GlobeSpan.
With all the issues the telcos have to sort through before they get to retail distribution of DSL modems, the cable industry clearly has a window of opportunity to gain computer manufacturing and distribution support for cable modems. The success of the DOCSIS project in meeting its Western Show deadline could well prove to be one of historic proportions.