Video dreams get real

As telcos increasingly enter the video realm, vendors are ready with all the latest apps

The killer bundle has been on everyone's mind for the past couple of years. A handful of companies have managed to pull one together, and everyone who hasn't yet is trying to - including telcos. As the threat of cable companies incorporating voice into their service offerings goes from myth to reality, carriers are on the prowl for the pieces that will help them create their own killer packages - preparing to fight to stay competitive.

This hunt is pushing video technology - specifically interactive and two-way TV, very high bit-rate DSL (VDSL) and residential gateways - onto the front burner.

"Video is becoming more and more a main baseline telecommunications requirement," says Paul Connolly, vice president of marketing and network architecture for Scientific-Atlanta. "People think of television or video as separate from computing or data or voice activity. As we start building the three together, you get some very powerful combinations."

As the value of enhancing communication and entertainment is realized, various mediums will begin to interact. "The Internet is becoming video," says Connolly, explaining that it already has evolved from text to images to limited video. And now there is a demand for more video, he says.

As more of today's major multiple systems operators - including AT&T and Time Warner - begin using cable modems to bundle cable telephony, high-quality video and high-speed Internet, it is becoming critical for telcos to get into the video game, says Aidan O'Rourke, marketing director of DSL products for Broadcom.

Telcos that can offer only high-speed Internet access and a phone line are running into customer retention issues. "To retain their customers, they really have to have a long-term competitive weapon against the bundled services of the cable operators," O'Rourke adds.

Bringing out the big guns

Video vendors are continually working to prepare the secret weapons carriers are seeking to get into the package game. Several companies are preparing to roll out new offerings at Supercomm.

Scientific-Atlantic will unveil advances in optical electronics that make it possible for carriers to drive fiber closer to customers at a lower cost. The company will demonstrate a cladding pump optical amplifier, which allows it to boost the optical signal more efficiently, Connolly says. The device enables long-haul carriers to increase the capacity of networks at a lower cost and allows access operators - which deliver service to end users - to drive the fiber deeper at a lower cost. It makes the network more efficient in the backbone, he says.

For the past couple of years, Broadcom has used Supercomm to showcase its VDSL technology, demonstrating its ability to deliver services such as multiple channels of streaming high-quality MPEG-2 video, switched-delivered video content, high-speed data and voice service through a set-top box to the home over existing telephone wires (Figure 1).

Despite a standards schism in the VDSL realm (see sidebar on page 124), Broadcom continues to deliver VDSL solutions. This year it plans to display how content can be distributed throughout the home. "We're bringing together the whole element of home networking and VDSL access," O'Rourke says.

The company will demo chipsets within the gateways that redistribute broadband traffic over home wiring, converting it into Broadcom's HomePNA technology and allowing any telephone jack in the home to provide 10 Mb/s of bandwidth, O'Rourke says.

mPhase Technologies will show version 1.1 of its Traverser product at Supercomm, which will allow customers to offer 192 channels of digital broadcast TV, high-speed Internet and voice over a single twisted pair (Figure 2). Once version 1.1 is complete - it is expected to be ready the first quarter of 2001 - production will begin on version 2.0, a proprietary real-time transport using rate-adaptive DSL. The company plans to deliver MPEG-2 digital TV programming and Internet traffic over a DSL line. Version 2.0 will support 400 video programming channels. "It's a true broadcast system, not to be confused with IP multicasting," says Ronald Durando, president and CEO for mPhase.

ADC Telecommunications will demo its new AccessPoint product, which allows carriers to deliver MPEG-2 compressed video over ATM networks, or "push video over telephone facilities at lower speeds that weren't really acceptable before," says Bob Sullinger, senior marketing manager at ADC. The company recently announced GTE as its first carrier customer for the product and said it is working closely with RBOCs and large carriers that have expressed a renewed interest in video.

"The interest right now is due by and large to the [fact that the] cost point to deliver video has just dropped dramatically," Sullinger says.

iMagicTV plans to display managed digital TV service, featuring interactive program guides and video-on-demand capabilities. The company also will fuse television and video, giving consumers active control over video, says Marcel LeBrun, iMagic's president and CEO. "[It's a] channel within a channel concept," he says, explaining that consumers will be able to order a pizza and a movie from a single channel.

iMagic also will showcase timeless TV, which will allow consumers to record TV programs and access them later with VCR functionality. All services will be delivered over a variety of infrastructure from broadband equipment manufacturers to prove they aren't tied to proprietary solutions, LeBrun says.

"The theme is managing the end-to-end consumer buying process for live TV and merchandising," he adds. iMagic will demonstrate from start to finish how consumers become aware of services, pay for them and get them delivered.

ViaGate will showcase its ViaGate 4000 platform at the show, from which carriers can launch converged service for video, VDSL and voice (Figure 3). The platform takes VDSL links into customer homes over ATM on the same copper pair as the telephone and streams video to TVs. ViaGate can produce multiple, simultaneous streams of TV into the home through its residential gateway, the ViaWay, delivering video for TV and high-speed data up to 10 Mb/s, plus derived voice over DSL.

The company plans to pair its VG4160, a multimedia broadband access switch capable of supporting 160 subscribers, with the ViaWay to demonstrate multiple streams of video to television.

"You could have five different televisions around the house," says Ray Young, senior vice president of marketing and new business development at ViaGate. "Each person could be watching a different movie or different broadcast channel all simultaneously."

Putting it all to good use

With the necessary equipment becoming more accessible and affordable, carriers stand to reap significant profits by entering the video arena.

"The single telephone line today, at say $20 per month, is capable of providing huge revenue opportunity for the [incumbent local exchange carriers]," Young says. With bundles, carriers have an opportunity to turn $20-per-month telephony subscribers into $120-per-month customers, using the same transport mechanism and copper pair to get there, he adds. "We ride in on top of that voice circuit."

"The point of no return has been crossed around the full-service bundle in the market," iMagic's LeBrun says. "With bundles, your revenue can double and churn goes right down."

iMagic's goal is to show its telco customers how they can own the top 20% of the market - not the guy who wants just cable or just telephone but the customer who will watch TV, use high-speed Internet and watch a few movies, LeBrun adds. "It's not about positioning; it's about revenue and it's about defenses."

Interactive TV got a bad name in the early 1990s when those that attempted the technology spent a lot of money without knowing which customers would take to which services, LeBrun says. But two things have happened since then to change the technology's fate. A pay-as-you go infrastructure was developed, making the technology more affordable, and new developments have allowed interactive TV to be built on Internet technology, making it possible for companies to bring applications to market at almost no cost.

In the past, the only people willing to pay top dollar to create video networks were broadcasters, said ADC's Sullinger. Now, MPEG-2 and ATM working together allow video to be pushed across the network without dedicating facilities, he says.

But today, carriers are grabbing new initiatives as they are created.

BellSouth Entertainment, for one, already has reached more than 1 million customers with its mixed approach to video. Refusing to tie itself to a single technology, the carrier instead uses a "mosaic strategy," says Don Granger, vice president of operations for BellSouth Entertainment.

The carrier started with hybrid fiber/coax (HFC) when that was the standard, then moved into digital multichannel multipoint distribution service (MMDS) as that technology evolved. It then decided it could deploy fiber deeper using an integrated fiber-in-the-loop approach to deliver voice, video and data, Granger says.

"The basic philosophy is however we can get to customers in the most effective way that will provide a quality service," he says. "At the end of the day, it's the customer needs we're trying to deliver."

U S West also offers video via a mixture of technologies. The carrier has a HFC system in Omaha and a VDSL platform in Phoenix. The Phoenix system operates using residential gateways or set-top boxes. The gateway captures the digital signal and moves it around a home, enabling video on up to five TVs and sending the IP signal to the main computer in the home, says Vickey Callen, vice president and general manager of broadband services for U S West. Today, U S West has 30,000 customers in Phoenix and is testing VDSL in Denver.

The RBOC also is working with digital broadcast satellite in some of its multiple dwelling unit locations, Callen says. "For us, it's going to be about speed to market."

Keeping with the times

Such new developments reflect the blood, sweat and tears of industry vendors that work closely with carriers and end users to gauge interest in new technologies and map out the direction they should take.

Broadcom, for example, has mutual relationships with the key telcos that deploy its next generation chipset, O'Rourke says. The vendor has access to field trial data, customer satisfaction reports and other information that ensure its technology is meeting carriers' needs.

Scientific-Atlanta does network modeling, running what-if scenarios to test the uses of various technologies and traffic levels and straining networks to see where they break down, Connolly says. "A key conclusion we've made [is that] there's no one dominant, right architecture for everyone," he says. The starting point of the operator, their geography, the amount of flexibility they want built in and many other factors must be considered when choosing technology. "The value we provide is letting our customers see some of those so we can jointly arrive at optimal architecture," he adds.

And ViaGate remains in touch with potential users of its technology through a direct sales force and marketing employees. The company also relies on industry analysts to get feedback on requirements in the space and what potential ILECs are looking for, Young says.

ViaGate works closely with the full service access network, an initiative established more than three years ago to work on a standard for VDSL, Young adds. The group comprises major carriers worldwide, including GTE, Bell Canada, BellSouth, BT, France Telecom, Deutsche Telekom, U S West and NTT, among others.

"The VDSL technology is being tested and validated and standardized on by the [full service access network] companies. They have a VDSL committee [that is] the world's leading authority on VDSL, and we're working with those people," Young says. "If somebody draws a map to the gold mine and you follow that map, you should get there. They are providing the map, and we're trying to follow it."

When arguing over two technologies that, according to some experts, have no measurable difference in real-world performance, a war of Lilliputian proportions can ensue. Presently, a battle over a standard line coding technology for very high bit-rate DSL is being waged by several interested parties.

The VDSL Coalition, led by companies such as Lucent Technologies, Broadcom and Infineon Technologies, have rallied around the single-carrier modulation techniques of quadrature amplitude modulation (QAM) and carrierless amplitude phase (CAP) modulation.

"We have people designing and building both kinds of systems but who believe that single-carrier CAP or QAM have distinct advantages," says Ron McConnell, a technical staff member for Bell Labs' advanced technology division.

The VDSL Alliance, on the other hand, supports the multi-carrier modulation technique, discrete multi-tone (DMT), which currently is used in asymmetrical DSL (ADSL) technology. The VDSL Alliance includes companies such as Texas Instruments, Alcatel and a host of other international and domestic companies, which scoff at claims by the CAP/QAM supporters that the single-carrier scheme is less expensive and less power-hungry.

A demilitarized zone was created at the Alliance for Telecommunications Industry Solutions T1E1 meeting in February. The T1E1.4 sub-committee agreed to develop a three-part trial-use VDSL standard. The trial-use standard will have three documents: a multi-carrier part, a single-carrier part and a common part. The standard will last for two years from the date of approval, which could be as soon as August, McConnell says. It then will come up for renewal.

"During those two years, people can manufacture, sell and deploy their [preferred technologies], and at the end, we can look back and see how it has developed. Maybe we can make a decision then," McConnell says.

Companies already are shipping pre-standard solutions.

Broadcom, a member of the VDSL coalition, has already shipped 250,000 VDSL transceiver chips and has contracted with Next Level Communications to co-build VDSL set-top boxes based on that chipset.

Texas Instruments, a VDSL Alliance member, has developed a digital signal processor-based DMT VDSL chipset, the TNETD8000, that consumes less than 1 W of power.

As manufacturers build to their preferred specifications, the market will help determine the ultimate configuration. "It won't take a standard for this market to take off," McConnell says. "Everyone would be much happier with a single standard, but it never quite seems to happen."

DMT is market-ready and in use for ADSL technology. It will have the market advantage of interoperability with existing ADSL equipment once applied to VDSL. But the race still is on to meet the more stringent environmental requirements for VDSL.

"Single-carrier VDSL systems that meet the national and international requirements will be available before the equivalent alternative systems can be," McConnell says.

Companies have two years to decide which end to open their systems on, the big end or the small end. ATIS and other standards bodies can assume the role of Gulliver.