Next Steps for Cable: Inter-Operator Networking and DOCSIS 3.0

Carl Weinschenk

The cable television industry, for all the deserved and underserved heat it takes in the media and among customers (and ex-customers), does a good job of exploiting its opportunities. In the old days, it recognized and exploited the opportunity to deliver television broadcasting. Years later, it did the same thing in relation to faster Internet connectivity. Most recently, it took on one of the few groups less popular than it is, the telephone companies, and carved out a growing voice business.


For most of this time, the multiple system operators keenly eyed another great opportunity: the commercial segment. While individual companies have done well, such as Cablevision's Optimum Lightpath and Comcast Business Class, the overall impact has not been overwhelming.


The Holy Grail is an industrywide consumer and business network that crosses operator lines while bypassing the phone network entirely. Thus, a VoIP call made in one company's region to a phone in another company's footprint -- which today generally hops on and off the public switched telephone network (PSTN) -- would be exclusively handled by the cable collective. While consumers will be able to use such a network, it clearly is intimately linked with the success of the industry in the small and medium-sized business sector.


A small step toward success was taken this week as Charter Business and Time Warner announced that they are interconnecting their Ethernet-based networks. The connectivity is aimed at business customers. It's a bit unclear about if and when the service will extend to consumer customers of the two companies.


Interconnectivity is one piece of the puzzle. A parallel development to the advent of Ethernet connectivity and drives to interconnect networks -- and one that also bodes well for the general attractiveness of the cable industry to businesses -- is the arrival of version 3.0 of the Data Over Cable Service Interface Specification (DOCSIS 3.0). Light Reading's Cable Industry Insider looks at DOCSIS 3.0. The main takeaway is that it is a major play in the unending war between the cable and telephone industries, and that major rollouts of the technology will begin this year.


DOCSIS 3.0 is a potent platform. It offers enough capacity (160 Mbps upstream and 120 Mbps downstream) and has the quality of service features necessary for IP video and other highly interactive convergence applications. The massive amount of bandwidth -- particularly the great increase in upstream capacity -- will make DOCSIS 3.0 a tool that will attract small and medium-sized businesses, the story says.


Communications Technology suggests that the cable industry has made significant strides in serving the business market. The piece begins by tracing some of that progress. For instance, in November, Cox Communications launched Cox Business Voice Manager, a system that integrates desktop phones, PCs and wireless devices. Also in November, Comcast and Microsoft announced services for SMBs that formerly were appropriate only for businesses with IT staffs.


A third announcement was aimed at Time Warner Cable customers in New York and New Jersey. NYXPO is a business phone service with features specifically aimed at the SMB market. In general, the piece suggests an industry that is confident that it can serve the business market efficiently and less expensively than its telco competitors.


While the cable operators have an opportunity in the business sector, the path will not be easy. This analysis from the Gerson Lehrman Group says the big operators recognize that delivering Ethernet services to commercial customers is a good opportunity, but suggests that important structural steps must be taken to achieve success.


The most important is that separate corporate entities must be created. The writer points to Cablevision's Lightpath, which is well insulated from Cablevision's consumer cable operation, as a good example of the type of organization that is necessary. He says these organizations must be allowed to evolve at their own pace while having access to operators' fiber backbones. This simultaneous infrastructure sharing and corporate autonomy is tricky, the writer says, and internal turf wars must be avoided.

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