GIG-E BOLSTERS CABLE'S VIDEO-ON-DEMAND ARSENAL

Charter Communications' decision last week to employ a gigabit Ethernet network architecture that improves flexibility and cuts the cost of video-on-demand (VOD) deployments is a sign the cable industry is taking aim at the nascent video-over-DSL business.

The gig-E architecture neutralizes telcos' narrowcast interactive advantages and improves the flexibility of cable's broadcast networks. In addition, it helps cable get to the market first with narrowcast video offerings, said Don Loheide, Charter's vice president of engineering and technology.

“Our overall infrastructure is much simpler because most of our channels are still broadcast channels,” said Loheide. “We're talking about a minimum number of switched channels, whereas DSL would have to provide an entire switched infrastructure.”

Charter delivers IP video to hubs and then translates it to RF-modulated MPEG 2 for delivery over its coax plant. This architecture makes cable VOD credible and “gives cable a much better video-on-demand solution than they would have by trying to integrate VOD as a service that's injected at a central office,” said Bill Weeks, chief technical officer with video-over-VDSL vendor Next Level Communications.

While it surpasses traditional data-centric, DSLAM-based ADSL services, gig-E does put cable on a more level playing field with VDSL providers like Next Level, Weeks added.

Next Level's on-again, off-again video-over-VDSL relationship with Qwest Communications is currently being evaluated, said a spokeswoman for the RBOC, and cable's resurgent VOD business doesn't affect that.

Craig Fisher, a Qwest staff engineer, acknowledged that the gig-E architecture could save cable some money, but he didn't see anything that would change Qwest's approach to video-over-DSL services.

“It's hard for me to see where it's going to change anything around the flexibility that would be detrimental to us. I don't see there's any added sense of urgency,” said Fisher. “I don't see where it changes much of anything.”

However, others believe the architecture enhances cable's ability to deliver the interactive services the industry is relying on for future revenues, and it heightens the perception that video over DSL on conventional telephone networks is unworkable.

“I never believed that the telephone companies or DSL was going to work for delivering video,” said Ron Durando, president and CEO of DSL equipment provider mPhase Technologies. “If it gets traction, it only gets traction in the rural telephone companies. I've always believed that if the telephone companies want to compete for TV, they have to go fiber right to the home.”

That's what BellSouth is doing for “about 80,000 customers via fiber to the curb in Miami and South Florida,” and in a fiber to the home trial to about 400 homes in Dunwoody, Ga., said a BellSouth spokesman.

But that's expensive, and gig-E actually saves money.

“We no longer have to dedicate a server for a group of customers that have access to VOD. We can now put a standard line ring Ethernet switch in the middle and have fewer servers by doing that,” said Loheide.

A year ago, a 3.75 Mb/s video stream cost about $150. That's now “more on the order of $30 or $40 a stream,” said Greg Thompson, chief technical officer of nCUBE, which is providing Charter's VOD servers. Thompson said telcos can also use gig-E because “the fiber ring we're delivering this video over is really just an IP-based metropolitan fiber ring that the telco providers either have or would likely need to install. There's a lot of commonality in transport technology.”

Cable's quick VOD deployment, combined with its inherent broadcast advantages, shoves the slow-to-develop video-over-telco business behind the eight-ball, said Yvette Gordon-Kanouff, vice president of corporate strategy for SeaChange International.

“How much penetration can [telcos] get into the basic video market?” she asked. “You can't just offer one [VOD] service. The payback is really offering the complete set-top box-based package, excluding data for now, because on that side DSL has been advancing.”

DSL video, though, is a speck in cable's exhaust cloud.

“There are millions of subscribers connected to the cable HFC network. [Telcos] have to invest a lot in high-capacity DSL, which is not available today,” said Nimrod Ben-Natan, director of cable solutions for Harmonic, which provides the IP-to-MPEG switching technology.

The competition, if ever there was any, is over, said cable-watcher Michael Harris, president of Kinetic Strategies.

“Video and DSL ain't going nowhere, no-how, anyway. I see that as a joke,” Harris said. “[Gig-E's] competitive advantage vs. DSL is that you're offering MPEG high-quality dedicated video streams and you can offer a shipload more of them.”

And sledgehammer video over DSL in the process.