Biting back

For Myrio, the concept is simple: Use full-rate ADSL to fortify a telephone company's service portfolio with entertainment video.

“We're a software company,” said Robert Manne, president and CEO. “Our partner is the telco. We help them become an entertainment company.”

Once that happens, Myrio shares the increased revenues the telco rakes in by adding television to its high-speed data and local and long-distance phone packages. Myrio's primary customers are incumbent local exchange carriers, Manne said, although the company now is “seeing a lot of action and interest with the CLECs who have been clobbered in the financial market and are looking to add to their business strategy.”

Myrio's sales pitch is simple: stop cable operators from siphoning off telco customers by making the telcos more than a one-trick pony of services, Manne said.

“The telco business case is what makes this all work out, since they already have the copper line and they already own the last mile and they already have the customer. We're taking advantage of that,” he said.

The payback for putting in the necessary gear—a video headend, including satellite dishes, video encoders, DSL access multiplexers and ATM gear—takes no more than three years because the carrier can leverage its lines, Manne said.

Curt Walzel, executive vice president and general manager of Texas-based Livingston Telephone, is a believer. His company initially was approached by city officials who asked if Livingston would buy out the existing cable TV company, Cox Communications.

“We didn't want to do that,” Walzel said. “We felt we could do something without having to do a rebuild. We started looking and we found Myrio at one of the trade shows.”

Other vendors proffered ways for Livingston get into the entertainment space “but Myrio fit our needs, which is what it boils down to,” Walzel said. Financially, he added, it's paying off.

“We took a $5.60 a month customer and turned it into $70-plus,” Walzel said. “We give them everything under one umbrella so they don't have to deal with five or six operations. We give them quality. They get a good picture; it's reliable, it's honest, it's straightforward. If your phone works, by God your TV works.”

Livingston puts full-rate asymmetrical DSL on a network it designed five years ago to carry bits from 12,000 to 18,000 feet from the central office, Walzel said. The company's ADSL service delivers up to 10 Mb/s of data—including video—as far as 13,000 feet from the central office.

That's why full-rate ADSL is so important to the mix, Manne said. It's less expensive than very high bit-rate DSL but has greater reach than other ADSL solutions. It also lets telcos leverage the personalization characteristics of telephone networks.

“We have a virtual private network connection between the central office and individual subscriber homes,” he said.

It's a selling point against cable's shared network, which has traffic and overload problems when too many subscribers are on the network, Manne said.

Myrio's system delivers two simultaneous streams of DVD-quality video for two TV sets, and customers can “surf the Web on your PC and talk on the phone all at the same time,” he added.

That kind of diversity lets the service provider package different layers of service at different prices. In Livingston, for example, “the customer has a choice of everything we have. If he wants plain old-fashioned phone service, that's what we offer him,” Walzel said.

That, of course, is not why Livingston upgraded its network. Using a stairstep approach, the telco added high-speed DSL data and enhanced phone services before tossing in video offerings, which range from standard cable television service to premium channels and interactive video such as movies-on-demand.

Each stairstep holds a pile of gold that the telco is more than happy to scoop up and toss into its coffers, said Walzel.

While Livingston provides the technology and the network, Myrio delivers the content. In Livingston, that includes 42 channels of video programming, which is about equal to the competition—Cox and Classic Cable—but hardly the limit of what Myrio could deliver if required, said Manne.

“We've worked directly with the major motion picture studios, with content aggregators, with TV networks and with TV network aggregators so we can deliver a total end-to-end solution for a telco,” he said. “We install it. We provide them a level of backup and we even provide them a level of marketing services to help market this against cable companies.”

ADSL technology, often maligned for its shortcomings, has been badly underestimated when it comes to delivering converged services, said Brook Longdon, Myrio's manager of network engineering.

“DSL was invented to move video,” Longdon said. “That's why interleaving and forward correction and those kinds of things were put into the DSL standard to start with.”

And things are only getting better, he added. “We're operating with standards-based modems and standards-based cards at 12,000 to 13,000 feet,” he said.

Continued testing at Myrio's integration labs has found that “the pairing between the DSLAM and the modem plays a large role in overall performance,” Longdon said. “Being an integrator, we spend a lot of time in our labs so when we go out and deploy this in the field, we make sure that we use the modem that gets the best performance with the piece of hardware that we're recommending to that particular customer for their application.”

After traveling through the telco's twisted pair network to the home, Myrio terminates its signal at a POTS splitter on the side of building where it is bandpass filtered for everything below 4 KHz for POTS and everything above for DSL.

Everything goes into the home via Category 5 cable, with future plans to consider wireless solutions. Once in the home, the DSL line terminates into the DSL modem where it is unmodulated and returned to pure ATM.

“From there we extract the Ethernet packets that were injected into the system, then we have an Ethernet network inside the person's home,” Longdon explained. “We thought Ethernet was a great medium, as opposed to going ATM right to the set-top. A lot of the appliances that we see coming into the home have Ethernet interfaces in them.”

The end user will never need to know all those details, but they are nice selling points when approaching telcos, which are “very awakened to the fact that AT&T did not pay $49 billion for [Tele-Communications Inc.] to sell cable modems,” Manne said. “[AT&T] has every intention of going in and clipping copper lines to the home.”

And Myrio has every intention of stopping them by presenting a solution that focuses on the subscriber experience, Manne said. “We're trying to take a chaotic, complex set of technologies that has a tendency to put fear into the typical consumer, and remove that technology from that experience.”

In doing so, Myrio puts the entertainment in the TV, not the PC.

“We don't see the typical homeowner saying, ‘OK kids, let's go gather round the PC now and watch a movie,’” he scoffed. “That's not going to happen in this country.”

What is going to happen, he predicted, is that telephone companies will bite back at the cable operators nipping at their heels.

“Our goal is to have the telephone industry kick butt back against the cable guys,” Manne said.

Briefly

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