A full meal, Cable industry tucks in its bib for the Western show >BY SHIRA McCARTHY, Associate Editor-News

'Serving up Tomorrow"-the Western Cable Show's theme-promises a full menu of services and issues. But infrastructure and network quality are likely to be among the main courses at the show, which kicks off this week in Anaheim, Calif.

Despite several high-profile cable modem contract announcements at last year's Western Show-including orders placed by Time Warner, Tele-Communications Inc. and Comcast-none of the service rollouts quite met the expectations set at the 1995 National or Western shows.

Announcements and promises made at this year's show are likely to be far more realistic, as cable operators begin to recognize the importance of building a strong network to facilitate enhanced services delivery, industry experts say.

"When you look at global multimedia networks and the sexy stuff like telephony and high-speed cable modems, infrastructure can be the Achilles' heel of those networks," said Jack Field, program manager for the broadband connectivity group of ADC Telecommunications.

Multimedia network operators need to build reliable, flexible infrastructures before deploying enhanced services, Field said.

The past year has proved to be a learning experience for the cable industry, as operators came face to face with thorny issues such as expense, upstream noise, users' expectations and bandwidth usage rates, said Jacob Tanz, vice president of marketing at Terayon Corp.

"Last year, they didn't have a lot of knowledge about those issues, but they've gained the equipment and the knowledge for the delivery of high-speed two-way communications over the last year, and they're taking a more serious, realistic approach.

Part of this more realistic attitude is reflected in many MSOs' decisions to slow down their cable telephony plans, said John Aronsohn, senior analyst at The Yankee Group, Boston.

"Cable operators have realized that the cost inherent in doing telephony over a hybrid fiber/coax architecture today is too great," Aronsohn said. "Cable modem service is a lot more forgiving than telephony. [With cable,] if you're doing data and you lose a few packets of information or have a noise problem, the headend or modem can just resend those packets. With telephony, there's a noticeable drop from the transmission, which means breaks in the conversation.

However, major telephony-over-cable vendors deny that MSOs have put the kibosh on their voice plans.

"The industry is in the process of upgrading the HFC infrastructure, and high-speed data is a natural early deployment technology because of less stringent requirements for plant upgrade," said Jack Bryant, president of the digital systems division at Antec. "This does not mean that cable operators are not deploying telephony. HFC telephony is alive and well.

In fact, telephony-over-cable is thriving overseas, said Terayon's Tanz, adding that delays in the United States are largely caused by the glut of competitors in the local telephony market, making data a better value proposition in high-speed data services.

And with the future of the Federal Communications Commission's interconnection order still up in the air, MSOs are particularly reluctant to jump into the local market, Tanz added.

But industry members see no such hesitation about digital cable now that TCI has blazed the way with its allTV service in Hartford, Conn. The TCI service may have been later and less extensive than anticipated, but it may be the light at the end of the tunnel for cable operators feeling the pinch from direct broadcast satellite (DBS) competition.

"The cable industry has been investing over the last couple of years in preparation for new competitors, but DBS' price points have spurred many [cable operators] to take the final step to action," said David Levitan, vice president of group strategic planning of the broadband communications group at Scientific-Atlanta.

The timeline to deliver digital video has been stretched by high cost, complexity and lack of content, Levitan said. But with the industry beginning to set standards and component costs starting to come down, Levitan expects to see many working digital cable products on the show floor and many more commercial deployments in 1997.

Despite criticism over last year's slower-than-expected cable modem rollouts, particularly TCI's much-vaunted and much-delayed launch of the @Home network, industry members are optimistic about the potential of cable modems.

And one-way cable modems that use the telephone line for the return path-characterized by many in the industry as a short-term transitional technology-could get a new lease on life over the next year, particularly because of TCI's recent announcement of a slowdown in its network upgrades.

"If TCI's announcement starts a trend in the industry, one-way cable modems have a large chance at succeeding," Aronsohn said.

BAY BREAKS CABLE MODEM PRICE Bay Networks' LANcity cable modem division has reduced the list price of its LANcity Personal cable modem from $595 to $495 and dropped the price to $395 for high-volume customers. The company has also added a number of features to the latest version of the modem, including Internet protocol addressing, port and protocol filtering, and data link encryption. FORE ADDS VIDEO TO PORTFOLIO Fore Systems has acquired Nemesys Research Ltd., a manufacturer of synchronous transfer mode-based video distribution and videoconferencing products. The deal will let Fore add video networking products to its asynchronous transfer mode products.