A call to arms

Typically, movie sequels don't do quite as well as the original in terms of box office dollars or critical appeal. But telco video Part II, and its counterpart, cable telephony Part II, are bucking the trend with the help of an 800-pound King Kong named AT&T.

In the original, the former Tele-Communications Inc. and a supporting cast of a dozen or so cable companies threatened to get into the residential voice market via their own hybrid fiber/coax (HFC) networks and provide competition to incumbents. Telcos, in turn, cranked up plans to enter the cable business and teach the entire industry a lesson about brand power. The drama ended relatively quickly when the technology proved too expensive for most (with the notable exceptions of Cox Communications, MediaOne and Cablevision Systems), and telcos eased back on their video plans (also with the notable exceptions of Ameritech, BellSouth and GTE).

In the sequel, cable operators are getting a boost from the AT&T brand, and telcos are no longer quietly snickering over the thought of a cable operator selling local residential voice service. Based on several announcements from last month's Supercomm '99 show in Atlanta, many are picking up where they left off a few years back, installing fiber deep into their access networks in preparation for carrying video services.

Viagra for video

Perhaps the most telling news out of Atlanta was that a number of telcos not only are thinking about video but are prepared to roll out services to blunt the threat of an AT&T-led assault on the local loop. Ironically, those making the biggest announcements at the show appeared to rely on very high bit-rate digital subscriber line (VDSL) technology that is not even fully standardized yet.

Next Level Communications, the former General Instrument unit, announced that several Independent telcos would deploy its NLevel3 unified access platform to offer competitive cable service over their existing copper plants. Among the telcos throwing their support behind the technology were Wood County Telephone, a 15,000-line telco in Wisconsin Rapids, Wis.; Chibardun Telephone Cooperative of Dallas, Wis.; Paul Bunyan Telephone in Bemidji, Minn., which counts 19,000 subscribers; and Chickasaw Telephone in Stillwater, Okla., which will begin using the system for high-speed data. In addition, Bell Canada, which has completed applications and system integration testing, said it would run a trial over existing plant in its Montreal lab.

"AT&T acquiring TCI was a huge wake-up call for telcos," said Jeff Weber, director of technology assessment for Next Level.

In previous attempts at providing video via VDSL, distance limitations of the technology and the cost of digital set-top boxes restricted the reach of telco video. On the latter problem, prices still are high compared with analog boxes, though they perform more functions. In the NLevel3 architecture, a single set-top acts as a traffic cop for all digital traffic entering the home, splitting off up to three MPEG video channels, a high-speed data stream and voice.

"It's roughly three set-tops and a cable modem," said Weber. "If you consider set-tops at around $300 and a cable modem at about $250, you're over $1000 already. This is comfortably less than that."

Telcos pushing fiber closer to the home has helped solve the distance problem, according to several vendors. At its best, VDSL provides pure data streams up to 52 Mb/s downstream over 2000 feet of copper. "Typically, we're seeing in the 20 Mb/s to 25 Mb/s on the downstream and 3 Mb/s on the upstream," said Aidan O'Rourke, director of DSL marketing with Broadcom Technologies, a chip vendor that supplies a number of DSL vendors, including Next Level.

In addition, some vendors are marketing their systems' ability to supply high-speed data and video only if and when telcos are faced with a competitive threat.

Next Level, for instance, doesn't even use the term "video" in any network component, instead preferring more generic terms such as "broadband digital terminal" and "universal service access multiplexer" for CO-based boxes and "broadband network unit" for pedestal-level equipment. In the company's scheme, broadband network units can support any combination of 16 cards for different types of service.

"You also can set different bit-rates depending on the type of channels you're providing," said Weber.

Others at the show were taking a similar tactic. ViaGate Technologies used Supercomm to position its ViaGate 4000 system as a step beyond asymmetrical DSL. Under its latest release, the company can push 26 Mb/s downstream and 3 Mb/s upstream.

"Certainly, ADSL will win the first years, but VDSL will come on as ADSL runs out of bandwidth," said Michael VanPatten, senior vice president of ViaGate. In Atlanta, the company demonstrated a system using Lucent Digital Video's codecs that could run high-definition TV over twisted copper pairs.

Still, a number of vendors insisted that while DSL data strategies were good in the short term, telcos must begin to consider all three services - voice, data and video - as the era of free voice begins to dawn.

"You need three services to have a 24-month business case. Internet and voice over DSL is not going to be enough," said Marc Pfeiffer, director of internetworking marketing for Newbridge Networks, which used the Atlanta show to unveil its Digital Media Distribution Service group of products.

DMDS, which incorporates some of the company's MainStreet asynchronous transfer mode switch product group, lets carriers provide broadcast media services including Internet protocol (IP) multicasting over existing copper.

Canadian telco NBTel also said at the show that it would use Newbridge's DMDS 350 to provide competitive cable service in several markets. The first products from the line, the 300 and the 350, which are part of the Versatile IP group, also can be integrated with the company's MainStreetXpress 36170 switches, something a number of competitive local exchange carriers are looking at, Pfeiffer said.

"DMDS is really a mechanism to offer a new range of services," he said. "Broadcast Internet, for instance, isn't far off. In a multicast environment, that offers a whole new concept in Web hosting."

PixStream Inc. and iMagic also threw their support behind DMDS by announcing they would combine their systems with Newbridge's.

The old HFC push

While DSL gains momentum and copper-based video certainly is making a comeback, not all vendors are sold on using existing copper to provide multiple services. Scientific-Atlantic Inc., with a significantly larger presence at the show than in previous years, is rededicating its efforts to push traditional HFC architectures in the telco environment.

"If you look at VDSL as a mass-deployed service, it's a pretty difficult proposition," said Paul Connolly, vice president of marketing and network architectures for SA's transmission network systems. "VDSL is not modular. It's an all-or-nothing proposition."

Indeed, fiber being pushed closer to home is making the architecture decision easier, said O'Rourke.

"The [regional Bell operating companies] are actually looking at passive optical networks as a key to increasing their revenue. They believe they can justify the deployment of fiber, even for narrowband services, because of what they save on maintenance," he said.

ADC Telecommunications, an HFC stalwart, announced at Supercomm '99 that it has expanded its video product line by acquisition. The vendor announced at the show that it had acquired Pathway, gaining that company's AccessPoint Universal Media Access System.

The platform is designed for MPEG 2 compression, multiplexing and transmission over a variety of networks. As an adjunct to ADC's Cellworx Service Transport Node, AccessPoint can better equip networks for video services, such as distance learning and telemedicine, where compression is required.

"It spawns a whole new generation of video applications," said Bill Cadogan, CEO of ADC.

Regardless of architecture, though, most agree the specter of AT&T competing for local residential voice service is forcing telcos to re-evaluate their strategies. "The table stakes have been raised," said Connolly.