Advances in all facets of data-based communications are combining to create a huge advantage over traditional carriers for anyone in a position to build a nationwide network infrastructure, including the cable industry.
This is the dawning realization that has brought cable MSOs together on a plan to cooperate in creating such an infrastructure and is the development that is central to GTE's recently-unveiled plan to develop its own nationwide network with special emphasis on the data side. While key technical issues remain to be resolved and the full potential of many advances, especially in the IP (Internet protocol) domain, remain to be realized, the picture is now complete enough to suggest that high-speed data connections offered end-to-end to small and large customers alike are the ticket into providing everything from telephony to interactive video.
"Having the opportunity to use state-of-the-art equipment from the start allows us to exploit the latest standards for things like IP telephony and IP broadcasting," said Richard Green, president of Cable Television Laboratories. "It's too big an opportunity to pass up, which is why the CEOs on our executive committee have decided to work together to create a national infrastructure."
This initiative was so new that, at press time, most of the senior technical strategists who will be charged with working out the details were in the dark about the development. But they made clear the benefits could be vast if the issues that have divided them can be overcome.
"There are tremendous economies of scale to be achieved through sharing of a national infrastructure within the cable industry," noted Milo Medin, senior vice president of technology for @Home. "But you need a single point of operation as opposed to simply coordinating efforts among a variety of backbone suppliers."
@Home acted on several fronts this spring to strengthen its position as the leading source of industry backbone support. Most significantly, it gained support from Canadian MSOs Rogers Cablesystems Ltd. and Shaw Communications Inc., both of which took five percent stakes and signed on for backbone and content distribution services from the U.S. firm. With this deal, @Home's partners' cable networks now pass close to half the cable households in North America, officials said. As this agreement was coming together, @Home also completed a deal with Teleport Communications Group, which is controlled by the same cable partners that are involved in @Home. The agreement calls for use of TCG links to open a path to corporate customers that could significantly expand the early revenue base for the data company.
"As our cable partners continue with the rebuilding of their networks to support delivery of residential services, the access to the business community over TCG's facilities gives us a chance to generate a significant revenue return on our infrastructure investment right away," said Matt Wolfrom, spokesman for @Home, which also completed a new round of financing.
"An example of what the TCG agreement means for our business can be seen in Santa Clara, where we currently have an RDC (regional data center) that can use existing (network) facilities to provide services over a 5-to-10 mile radius," Wolfrom said. "With this partnership, we can extend our reach from San Jose in the south to Napa Valley in the North almost overnight."
TCG provides a wide range of switched telecommunications services over wireline facilities in 57 metropolitan markets with connections to some 7,700 buildings and also has access to customers in 103 more markets via 38 GHz wireless links supplied by newly-acquired BizTel, which also holds 38 GHz licenses in all 57 of TCG's markets. "TCG's wireless capabilities give us access to customers anywhere within two to three miles of its fiber routes, as well as to customers outside its primary service areas," Wolfrom noted.
@Home is in the process of completing RDCs in Hartford, Detroit, Union City (northern), New Jersey, Phoenix and Philadelphia, and will soon launch @Work services in those markets, with New York, Boston, Los Angeles and Washington to follow by mid-summer, Wolfrom said. All these markets are served by TCG.
Another MSO moving forward on the CLEC front to establish regional infrastructures is Time Warner Cable, which recently launched switched business services in Austin, the third market it has equipped with its own 5ESS switch, following installations in Manhattan and Rochester, N.Y., where the MSO is offering residential as well as business telephony services. Over the next year or so, the company plans to install switches in all 15 of its other major markets, where it has been offering non-switched competitive access services.
The regional infrastructure envisioned by Time Warner also includes ATM (asynchronous transfer mode) switches, which would serve to handle high-speed data and digital video traffic. While the company is not ready to discuss specific plans, the installation and operation of the ATM units will fall under Time Warner Communications, the telecommunications unit, said Bob Meldrum, spokesman for the group.
Such regional, fiber-rich infrastructures, along with providing support for all locally distributed services, can serve as the data links between an industry wide national data backbone and the local cable distribution plants. The key to making it all hang together is the extent to which the data layer within the regional and local distribution network components is compatible with the architecture of the backbone. For example, where packet telephony is concerned, having a set of regional points of presence that use the same protocols to process packet calls would provide fast connections between callers on disparate cable networks while providing local interfaces to circuit switches that would allow for interconnection between cable-based calls and all other telephony networks with minimal latency.
"We could use a shadow backbone to get much higher performance than we can get over the Internet backbone," said Jerry Bennington, senior vice president for Internet Technology at CableLabs. "We've gone through a watershed over the past two years in terms of our ability to cooperate on strategic issues, so I'm optimistic we can agree on the points necessary to ensure interconnection and interoperability."
Major steps in that direction have already been taken, especially with regard to agreement on protocols for delivering data services over cable networks. But issues remain, including the methods to be used in handling traffic within regional backbones and between the regional edges and the national backbone.
"Successful implementation of a national backbone for the industry as a whole would require agreement on how quality of service is managed at the edge of the local system," Medin said. This is the point at which policy governing handling of various classes of service across the backbone is dictated for managing traffic within the region, which means everyone must employ the same management protocols at the edge and subscribe to the same policies within the local operating cloud, Medin said.
"Depending on how people have built their networks, uniformity could require some major changes in local design," he added.
Given the role of the backbone provider in setting policy for how IP telephony, streamed and cached multimedia services, multicasting and many other classes of services are handled, it will be difficult for cable interests to settle on a cooperative framework, Medin suggested. "It's pretty hard to run what we're doing by committee," he said. "It will be interesting to see how the role of setting policy on the backbone will be handled."
But parties to the discussion among industry leaders said the opportunities were so large that they were determined to overcome the barriers as well as the anticipated resistance from various technical camps within the industry. "Five percent of this is technical, and the rest is a combination of business and egos," said a senior engineering executive who was instrumental in bringing the industry to consensus.
Asking not to be named, he added, "@Home kind of thought they were going to run with the ball themselves, but now they'll have to accommodate a larger perspective and purpose."
One touchstone for achieving wider cooperation on a national high-speed cable data infrastructure is the possibility of linkage between a new national backbone created by US West's Continental Cablevision and the backbone built by @Home Networks for its cable partners, which along with new additions Rogers Cablesystems and Shaw Communications includes Tele-Communications Inc., Comcast Corp. and Cox Communications. "We're talking, which is about all I can say at this point," said Paul Bosco, director of broadband infrastructure and service development for the MSO.
Continental's new national backbone, linking high-speed data service territories in New England, Atlanta, Jacksonville, Fla., Detroit and Los Angeles, uses leased fiber lines in combination with regional production centers to provide a distributed architecture for delivering various categories of high-speed data services at guaranteed levels of quality that are hard to achieve using direct regional tie-ins to the Internet backbone. This is the same principle on which @Home has built its backbone.
While MSOs that don't have their own national backbones, such as Time Warner, can turn to other suppliers, as Time Warner is in using MCI's links, it would be hard to get such outside suppliers to cooperate on all the issues that need to be resolved in order to support a cable-specific set of service tiers, Medin said. "The MCIs and BBNs of the world have a lot of other priorities to deal with besides cable, so you don't have any assurance that you'll get what you need without doing it yourself," he said.
The biggest factor in the sudden top-level push for a universal cable data infrastructure is the potential of IP telephony to open a quick path into a highly-featured second-line business for cable operators that avoids the headaches and costs of implementing circuit switched voice over hybrid fiber/coax networks. For example, no one has gone further than Time Warner in preparing for delivery of voice services over HFC, but, despite stronger than expected take rates for its residential voice service in Rochester, N.Y., the internal focus has swung to IP telephony, said Michael Luftman, vice president of public affairs for Time Warner Cable.
"There's a lot of discussion here focusing on IP telephony," Luftman said. "We're studying it very closely, but we haven't reached any decisions yet."
Recent demonstrations of advances in packet telephony have persuaded many industry leaders that their high-speed data pipes will be able to deliver a commercially viable package of enhanced voice services at costs far below those previously calculated for provision of circuit-switched telephony over hybrid fiber/coaxial lines. But, to make such services viable on a widescale basis, there must be points of entry based on commonly used protocols at all the regional levels, allowing servers to hand off calls destined for circuit service customers, while sending along calls in data formats to customers that are using cable's data-based voice services.
"We think IP (Internet protocol) telephony has the potential to be a very appealing business, but you've got to have standards if you're going to have an effective nationwide service," said an executive at one of the top MSOs, asking not to be named. "This is at a very embryonic level, but that's the plan."
Cable has been behind the "power curve" in packet telephony development, but that's about to change, Bennington said. "We're trying to move up on the list of priorities for the vendors so that they focus on developing products more suited to our needs," he added.
"IP telephony is sort of the CB of the Internet, acting like it's half duplex with a lot of latency," Bennington continued. "But in offering packet telephony over cable systems, you wouldn't have that kind of latency if you used high-speed backbone interconnections between Time Warner, TCI and the other cable companies."
The cable industry is looking for a low-latency service that can interconnect packet line users with circuit switched service users. Moreover, Bennington said, it must have a directory system that makes it as easy to dial someone at a computer as it is to dial a phone number.
Lucent Technologies' packet telephony system, based on the Internet standard H.323, has been especially influential in fostering the strategic shift now underway in cable. But the phone-to-phone version of its Internet Telephony Server SP that it will be supplying this summer for tests by ICG Communications, MCI and France Telecom is meant for a more limited set of applications.
In the initial iteration, users' calls will go out over local telephone lines to the central office switch. The switch will hand off calls designated for a specific distant number to the IT server for conversion to IP format, and transmission over data links to the IT server of the receiving entity in another city. There, the call will be converted back to the switched circuit protocol and handed off to the local central office for switching to the final destination.
"The choice of phone-to-phone capabilities for our initial server product is a matter of priorities dictated by the marketplace," said Brian Allain, director of future Internet initiatives at Lucent's Network Systems Division. "PC-to-phone connectivity will come a little bit later this year."
Avoiding long distance carriers' local access costs, the business PBX-to-PBX connections represent a strong revenue source for Lucent's technology right out of the chute. But cable operators want to be able to offer their second-line service in data format, enabling them to add a variety of features, including video telephony, that are supported by the H.323 protocol. At the same time, operators want to ensure that callers using the high-speed data links can easily reach or be reached by people who are on standard phone lines.
"We have a very long list of the types of services cable could offer along these lines," Bennington said, noting that the opportunities for a second-line service are strong on the residential and business sides alike. For example, he said, in a situation where someone with a large company is working at home, a customer calling the office PBX number could be automatically routed through the server to the worker at home, avoiding any confusion or need to talk with an intermediary.
The important thing, Bennington added, is that IP telephony in systems equipped for high-speed data is largely a "freebie" that avoids the need to equip the network with telephony hardware.
Phone-to-PC connectivity is readily doable, including provision of a directory solution, Allain said, but Lucent is waiting for more work to be done on the H.323 standard before rolling out these capabilities. As for videophone features, "that's something we want to have, but it's not a priority at this moment," he said.
While Lucent's (and other) recent releases of packet telephony, including proprietary versions from VocalTec Ltd. and others, have made full duplex IP a viable concept by eliminating much of the latency inherent to packet communications, they necessarily must add a new, albeit less significant, latency element in providing for call interconnection between circuit and packet networks.
"There's a slightly greater delay caused by the conversion process, which is noticeable," Allain said. Moreover, he added, "Voice quality is very close to standard telephony, though once in a while there are little impairments that you can detect."
Lucent doesn't believe the quality gap will stop widescale use of its initial product, because the software gives carriers the option of offering a different, lower cost class of service that is still high quality and robust. Over time, Allain said, the ongoing gains in processor speeds will serve to overcome both the delays and the voice quality limitations imposed in the digital compression process, which now runs voice data at 7.3 kilobits per second.
The quality issue isn't a show-stopper where cable is concerned either, Bennington said. "The fact that, at this point, packet telephony isn't ready for prime time doesn't bother me," he said, noting that, in whatever interim it takes for processors to overcome the gap, the question of whether a second line packet telephony service needs to be as good as lifeline service "may or may not be an issue."
Cable's drive to create a national backbone comes as the means for creating a low-cost distributed architecture built around the Ethernet protocol are reaching the marketplace. Where, previously, the only way to ensure end-to-end connectivity for a highly flexible backbone such as cable seeks was to convert all the data packets to ATM (asynchronous transfer mode) cells once they moved out of the local distribution environment, it is now possible to think about using Ethernet switches instead, including the new gigabit Ethernet gear now making its way into the marketplace.
As previously reported (see CED, April 1997, page 76), the business market has proven to be a tough nut for ATM, given the size of the installed base of Ethernet nodes and the costs and inefficiencies surrounding protocol conversion at the wide area edge. Some vendors and their customers are pushing for IP over ATM solutions, where the trafficking information contained in the IP header is preserved, while ATM is used as the transport format, while others are focusing on an all-Ethernet approach where gigabit switches become the backbone workhorses instead of ATM.
Today, routers are designed to handle protocol conversions between Ethernet and FDDI (fiber data distribution interface), which is the primary local backbone technology used in linking LANs or, in cable's case, linking routers at distribution hubs. But the ability to deploy an all-Ethernet network without resorting to FDDI or other non-native formats changes the picture, said Gordon Stitt, president and CEO of Extreme Networks, a supplier of gigabit Ethernet switches.
"You'll see a new generation of switches and routers very focused on Ethernet and high-performance routing that don't do frame translation," Stitt said. Today, there are 100 million Ethernet nodes in place, and by 2000, the rate of deployment will be at about 35 million per year, he noted.
The ability to operate without frame translation opens a wide range of capabilities to Ethernet across the backbone that have been hindered by the frame conversion requirement, Stitt said. "Ethernet has not offered the quality of service capabilities available over ATM and some other technologies, but that's going to change very quickly," he added.
Extreme and other parties to the new Gigabit Ethernet Alliance have settled on a common architecture but have a way to go before all aspects of the technology are standardized. But, as Stitt noted, ATM backers are still wrestling over standards for advanced capabilities as well, including the crucial issue of how to maximize IP potential for multimedia and telephony applications.
Making a choice between ATM and gigabit Ethernet in the backbone is very difficult at this point, noted Kingston Duffie, assistant vice president of technology at Ascend Communications, a supplier of remote networking solutions for corporations and service suppliers. "It's hard to look five years out and know which approaches are going to evolve to keep up with your needs," Duffie said.
But, he added, ATM could be hurt if its advantage as a technology that can mix circuit switched voice with data is neutralized by IP telephony. "My guess is you're looking at IP as the critical technology," he said, adding, "voice over IP is something to watch very closely."
For many cable operators, ATM will be the workhorse in the regional backbone, serving to map all types of services into a fabric that supports sharing of switching resources across all facilities. Cox, for example, while partnered in @Home, which presently uses ATM only as a transport mode for IP, is using ATM switches to handle its multi-service needs at the regional level, noted Jay Rolls, director of multimedia technology at Cox.
But this doesn't prevent Cox from being compatible with @Home, Rolls said. "We use a (private virtual channel) ATM link that provides the connection between our hubs and @Home's regional data centers," he noted. "At the center, the signal is converted to the native IP and sent out as IP over ATM on the backbone."
This suggests there is room for agreement between those who see ATM as vital to efficient operations in the multi-service regional environment and those who want to maximize IP efficiency by operating in an all-Ethernet environment end to end. But, given the strong divisions among technical people, getting them to agree on the distributed architecture approach taken by @Home, and now, Continental, may be harder than it looks.
"It's going to take real leadership, because a lot of egos are involved," said a senior cable executive, asking not to be named. "We can't assume that the benefits from cooperating on this will carry us through the debate to a successful resolution without some serious head-knocking."