Plenty of stuff to do on multiple screens.
Call it “anytime-anywhere,” or “four-screen” or something else – the technical feasibility of delivering multiple services across multiple platforms is here and evolving rapidly. But service providers still have to take care of the fundamentals.
This year, the MSO chief technology officers joining us are Chris Bowick of Cox Communications, Marwan Fawaz of Charter Communications and Mike LaJoie of Time Warner Cable. The interview was assembled from live interviews and written comments and edited for length (mostly the long-winded questions).
CED: What are your priorities for the coming year? Has the economy changed anything?
Chris Bowick: I can’t say the recession, per se, has affected our plans. There are two big ones. We’ve got the digital transition, partially met on 2/17, but we’ve still got that to go. And we have the tru2way deadline in July that we’re all working toward to meet our agreed deadline with our partners in the consumer electronics industry.
We’re working on the deployment of a new guide across our platform. We’ll do that coincident with a lot of our tru2way work. We’ll make it available first on our tru2way boxes and our multi-room DVR tru2way set-top boxes. We'll have an enhanced guide for HD capability.
We’ve also deployed MyPrimetime in six markets, and we’re working on deploying that nationally, and we’d like to improve on the availability in phase two of that.
Doing a lot of work around caller ID on the television set in most of our markets this year and through 2010.
Some miscellaneous stuff, some switched digital video markets launching, and expanding more capacity on our national backbone to make 100 or so HD channels available to all of our systems by the end of the year.
We’re going to have DOCSIS 3.0 in a lot of our markets, but not all. We’ll be doing that into 2010.
On the telephone front, we’re starting our circuit-switched to packet-switched migration. That will also help us free up spectrum on the upstream. And we’ll continue driving fiber deeper and upgrading our plant to one gigahertz. And, of course, we’ve got the launch of wireless later this year.
So you can see we haven’t got a lot going on this year. It’s slowed down a bit.
Mike LaJoie: We’re adding a lot more HD across the footprint. We’re adding more VOD channels. We’re launching 3.0 in some markets. We continue to enhance and improve the current product set, so Start Over continues to roll out. Look Back and Catch Up you’re going to see more of. Switched digital continues to roll; we’ve pretty much got that everywhere, but we’ll go to more channels in some markets.
The recession? We didn’t change our capital improvement schedule. We’re right on track with where we expected to be. I guess there will be some slowdown – we may not grow so fast, but we’re going to grow.
We’re looking at commercial services. We’re introducing a lot of Ethernet products of varying speeds, trunking, PRI – a lot of new products and features.
Marwan Fawaz: The strategies have not changed. Our investments might be more targeted in this environment. I would not characterize this as a “slowing down,” but as a focusing on priorities.
Our top-three priorities are launching DOCSIS 3.0. We’ve launched it in our flagship market – St. Louis. Others will be announced later in the year. A second priority is scaling our switched digital video deployments. We’ll be enabling more markets this year. The third priority is tru2way, and that’s driven by two factors. It’s important to open the platform to become an open standard so that we can get into some non-traditional applications. We’ve also made a commitment to the CE industry.
All that, and we’re still focusing on bandwidth management. That’s not just SDV, but also reclaiming analog channels.
That’s 2009. Beyond 2009, you’ll see more of the same for 2010 and beyond.
As an industry, we have to work on product entitlement, and we need to expand our peering arrangements with regard to voice over IP. IMS is also important for the industry.
We need to work on the service delivery platform – the back office. We need cross-platform enablement and cross-platform transactions. We need to create more of a universal resource management platform, rather than have one for VOD, one for SDV, others for other products. Unifying those systems is a key.
CED: What’s happening with DOCSIS 3.0?
CB: We’ll start to deploy it on a market-by-market basis. We might need it in some markets for the speed for competitive reasons; sometimes we might need it for efficiency because of the stat muxing capability.
ML: It is a competitive market, but it’s less that than responding to what customers want.
CED: Much is made of the U.S. lagging in broadband by some measures. Now that DOCSIS 3.0 technology is available, some consumer groups would like to see the country blanketed.
ML: It’s all free, right?
CB: A “build it and they will come” scenario. Sure.
ML: Sure, just unplug all the stuff you put in last year, throw it in the ocean, make a nice little habitat for the fish and put in the new stuff. You have to manage the introduction of a new technology in a sane, reasonable way, and every industry has capital restraints.
There are some advantages. The potential for cost per bit – the potential to drive it down is certainly there, but it’s not realized at today’s pricing levels. It will get there.
CB: We’ve actually sat down, tried to look out to the next 10 years, tried to figure out what our customers’ needs and wants are going to be, and try to predict what engineering needs to make available, and some markets simply don’t require DOCSIS 3.0. And yet we might deploy it for other efficiencies.
CED: Is consumer behavior having any effect on the network?
MF: We have seen the profile of network traffic changing. It had been dominated by peer-to-peer. Now it’s streaming. I don’t know if two years ago we could have anticipated streaming overtaking peer-to-peer.
To respond, we can deliver faster speed. Over-the-top is not easy to get up and running. We’re in a unique position to provide the access.
The issue is capacity management. We’re seeing a 50 percent increase in traffic. We have to provide the best experience, without latencies, and minimizing annoying buffering.
It’s very important, and DOCSIS 3.0 is the foundation of that. But we still have a lot of legacy DOCSIS – there’s still a lot of 1.0, 2.0 out there. We just have to remain vigilant to provide enough capacity for the traffic.
CED: Cable seems to be spending a lot of time contemplating home networks. What’s going on there?
MF: It’s one of the most popular services for our customers.
What we need to do is quickly identify the devices in the home and provision them. That’s an issue of management, and of content management. Whether you talk to cable or CE or content providers, we’re all trying to coalesce on one type of enablement.
CB: We might have almost as many miles in-home as we do outside. I think you’ve got to consider the in-home part of the network part of your plant. Our customers have always wanted the capability to network their various devices.
We’ve got MoCA in our set-tops. Our intent is to deploy home networking and do it coincident with our tru2way rollout.
ML: We’ve got quite a large number of customers who buy home networking from us. We intend to expand that product. You’re going to see more and more effective, managed networks in people’s homes. That’s a key opportunity for us.
CED: Is there a consensus way to build a home network in the cable environment?
ML: It depends to some extent on the transport layer to the home. We’re going to be deploying a number of different solutions depending on need. For example, multi-room DVR. We have a product we’re working on now that will be available soon, that will connect multiple set-top boxes with one DVR. In that case, the answer will probably be MoCA.
If it’s a hardwired device, probably Ethernet over MoCA. If wireless, probably 802.11.
CB: The intent is to deploy with MoCA, especially in multi-room DVR applications. But we’re going to be working with and managing quite a number of home networks, whether its 802.11n, powerline or HPNA – they’re all out there, and we’re going to have to deal with them in some form, shape or fashion.
The bottom line is that customers are interested in multi-room DVR, and we intend to roll it out using advanced set-tops.
CED: Glenn Britt said TWC is finally beginning to see the effects of wireless substitution, and there has been some media buzz about video subscribers cutting the cable in favor of getting content through a broadband connection. Is substitution an issue yet?
MF: For voice, there’s definitely a difference in behaviors. People are moving to wireless. That said, cable still has a significant opportunity for gaining market share.
We haven’t seen any evidence in video of cutting the wire.
People can use a game console to download movies. That’s fine; that’s still our connection.
ML: Consumers are getting their stuff over broadband – maybe all of it? There’s nothing wrong with that. We love our broadband product. People want to consume products over our wire? That’s what we want.
CB: Changing consumer behavior – that actually creates an opportunity if you can get out in front of it. We did it with our high-speed broadband, and we’re doing it on the wireless front as our customers change their behavior and want to take their products with them.
We’ve also got an opportunity to get out in front with our VOD platform. We can leverage video-on-demand to provide the same kind of on-demand capabilities that customers are looking for in over-the-top scenarios.
CED: Tru2way is being opened up. Apple has been very successful with downloadable apps. Does the iTunes store model make any sense for cable?
ML: We launched the OCAP stack in all new boxes in ’07. We’re close to a couple million boxes that run the OCAP stack. CableLabs has taken an important step of publishing a reference implementation of the OCAP stack. And we’re working with Sun and the Java community to encourage that kind of environment.
CB: CableLabs has done a great job getting together the tru2way developers conference. You ask a good question. If we could get tru2way to get developers as interested in tru2way as they’ve been in the iPhone, that would be a wonderful thing.
The question then would be how best to manage that applications environment so that we don’t have boxes dying in peoples’ homes as a result of bad apps.
CED: Any technology that has to be developed to support that?
ML: We have two classes of applications – bound and unbound. Bound apps are relatively straightforward. Certifying those applications is something to work through.
Unbound – just some widget you can download – those might be a little more wide open, and a little less vetted. I’ve seen an app that someone developed that utilizes SMS that allows someone to take a picture on their cell phone and send it directly to their television set. They said it took them three-and-a-half weeks to build it. The environment to actually introduce an app like that and make it readily available simply doesn’t exist yet. We’ll get there.
CED: Cell phone to TV? That brings up the anything-anywhere trend. Where is the cable industry with that?
CB: The need to take our products and services and put them on mobile devices and other devices in the home is going to be very critical for us over the long term.
The question is how best to do that? How do we manage content rights and security? What does the application environment look like so that we can develop applications and deploy our services cross-platform? Is there a multicast or unicast model we have to worry about long term? CableLabs is giving that a lot of significant thought.
CED: What else are you investigating?
ML: One thing to look at is having a certain speed tier and certain usage that goes along with it. That’s an opportunity to put them in a package that mirrors their usage.
CB: We’ve been looking at what Time Warner has been doing, and what Rogers has been doing in Canada on consumption-based billing. It’s very intriguing. But we have no plans this year to go to a usage model.
CED: Any reason to craft a package for people watching a lot of video online?
ML: Bits are bits. We’re a bit agnostic; we don’t really care. The type of traffic doesn’t matter. If usage patterns change, we’ll change the package. We’ve been doing that – we keep increasing the speeds available.
CED: How about commercial services?
ML: A lot of opportunity. We do about just north of $800 million, and we think it’s going to grow.
CB: We’re a smaller company than you are, and we think it will be a billion-dollar business in a very short time. It’s just growing gangbusters.
|The view from the U-verse|
In the final quarter of 2008, AT&T U-verse added more than a quarter-million subscribers to exceed the 1 million mark. If you grant that Verizon, with 1.9 million FiOS video subscribers, is the seventh-largest cable operator, then AT&T would rank 10th.
As vice president of video products for AT&T, Jeff Weber is in charge of U-verse.
CED: What are AT&T’s priorities for the coming year?
Jeff Weber: In ’09 we’re very much more focused on applications. Part of what we’ve been building with an all-IP infrastructure is capability around apps that is very robust. We’re now turning our attention to the reason we built the platform in the first place, why we took the technological risk. It will pay off.
CED: … Such as the EBIF application Verizon tried out during the Olympics?
JW: We offered an interactive Olympics app on U-verse TV. I’m not sure if the one you saw was similar, but that notion is exactly right. With our app, you were able to get medal counts, or get information on the sport or the athlete – just go deeper.
The Olympics is instructive, in that it was a meaningful content event.
We did one with fantasy football last fall. Almost any content, specific event or genre that is of interest, we’ll start to enhance through apps. You’ll see some more in March and April. We worked with Yahoo on the football app – they built that for us.
It worked very well because of our portal relationship. One thing we’ve seen clearly is the fact that customers can customize their portal and it just shows up in their TV experience – that is significant and positive. The customer doesn’t have to do anything. It just shows up, and that makes a difference in terms of the usage we see.
CED: Does the iTunes store model make sense for a service?
JW: The general notion is right. We definitely want to broaden the apps experience and make more available to them. Every customer isn’t going to be interested in every app. Picking, choosing, customizing makes sense. Is it literally the same implementation like Apple’s? I don’t know. There are differences between the wireless phone and the set-top.
CED: What’s AT&T’s approach to satisfying growing consumer desire for the convergence of services?
JW: We made an organizational change last year, and we’re implementing it now. Wireless and broadband and video have been brought together under Ralph de la Vega, who was in charge of wireless, and now is the CEO of the combination.
Sometimes organizational changes don’t matter. We think this one does. The change is significant. Product teams now report to one marketing manager. More conversations are now happening in the normal course of business on how to bring all this together, conversations that may not have happened before. It’s a competitive advantage for us if we continue to execute on it.
CED: Home networking seems to be growing as a competitive issue. …
JW: We’ve been focused on home networking from the beginning. It was driven by the product, probably by a desire to have Total Home DVR. Getting content around the home to whatever device, that’s been top of mind for us. Total Home DVR is the first implementation of it. All of that needs a robust, managed home network to move content, especially HD. That’s absolutely been part of the design from the beginning. Total Home DVR really showed it.