Some cable companies want to provide voice communications for their customers, but they dont want to get into the telephone business.
How is that possible?
Through voice-over-Internet Protocol (VoIP), theres no need to tap into the public switched telephone network (PSTN) and, thus, no need to become a phone company. The problem is that quality of voice communications via the Internet — with packets of data streaming erratically through the pipeline — was initially so poor that customers were loathe to endure the jumbled conversations.
Work toward unscrambling the packet problem is an early step down the path toward a powerful package of products called PacketCable, an Internet-based communications system now in development at Cable Television Laboratories in Louisville, Colo.
Major telephone carriers are working feverishly to overcome voice-quality hurdles, knowing that the prize will be the lions share of a new market. For the phone companies, the key is allowing Internet voice communications to flow over DSL. Voice is one application for DSL, a technology that turns common copper phone lines into high-speed data pipes.
In the competing world of cable, the major operators are already selling high-speed Internet service over digital cable along with video and voice.
But companies like AT&T Broadband and Cox Communications still must use the PSTN to provide reliable voice communications. That is, they had to become telephone companies facing a barrage of regulatory reliability and competitive demands. They also had to guarantee adequate power supplies for their telephone networks so that customers could be sure of getting a response to 911 emergency calls.
"Telephone is a tough business because the only difference between one provider and another is price," says Mark Coblitz, senior vice president of strategic planning at Comcast.
Instead of becoming a phone company, Comcast and several others, including Time Warner Cable, envision selling second-line service that would not face the stringent demands of "lifeline" service. But theyre also looking far beyond simple voice communications to services that could turn a home or office into an interactive Nirvana.
"For example, kids may want to be able to talk to each other while playing a networked fighter pilot game, like in the movie Top Gun," Coblitz says. "Thats not setting up a telephone call. Its integrating voice into a game."
For managers of interactive corporate services, such broadband capabilities will allow remarkably cheap teleconferencing, data transmission, long-distance calling and multiple phone lines over a single cable outlet.
"Convergence — this is the real promise here: voice, video and data all being carried over the same network," says Glenn Russell, project director for multimedia architecture at CableLabs.
As a research consortium funded by the cable operators, CableLabs helps develop technologies designed to advance the industry. From a simple substitute for the television antenna, cable has become a complex network that could be the first to produce true convergence promised by the Internet revolution. While phone companies struggle to roll out DSL and make tentative efforts to use copper for delivery of video, AT&T has made major incursions into the regional Bells turf with cable telephone and Internet service packaged with digital video.
According to Kinetic Strategies, a Phoenix research firm, 7.8 million households in the U.S. and Canada now subscribe to broadband Internet services. Of that total, 5.5 million homes use cable modems, compared to 2.3 million residential DSL customers, yielding cable operators a 70-percent share of the residential broadband Internet market.
With PacketCable, AT&T could offer not only traditional telephone service but VoIP and even communications through set-top TV boxes and other appliances (Just speak into the toaster). The bundle of services could be irresistible at prices that PacketCable will make possible. Furthermore, PacketCable could deliver a painful blow to pesky satellite broadcasting rivals, who are hampered by the lag time in communications through space.
"I think it will change everyones life, just as voice-over-DSL will," says Cynthia Brumfield, president of Broadband Intelligence in Bethesda, Md. "If you can offer a consumer a package of services that delivers digital video, high-speed data and six phone lines for $80 to $100 per month, that is a compelling offer, and its probably going to be very successful."
How soon PacketCable will become a reality is uncertain, however. As CableLabs works out the technical issues, the cable companies have their hands full working on recently launched services. The rapid expansion of digital cable and the advent of interactive television are only some frontier for the recently upgraded infrastructure.
At the same time, the cable operators are wrestling with the technical and marketing challenges of opening their networks to competing Internet service providers — a costly and sometimes frustrating undertaking in an unforgiving financial environment.
But if CableLabs past is prologue, PacketCable should be coming around the mountain in the next two to three years. It was the work at CableLabs that allowed Internet connections through cable in the first place via a technology called Data Over Cable Service Interface Specification (DOCSIS).
Worldwide shipments of DOCSIS-based cable modem products surpassed 6 million units in 2000, a sixfold increase over 1999, Kinetic Strategies says. North American shipments accounted for 68 percent of the 2000 total, or about 4 million units, up from 718,000 units in 1999. Motorola led the DOCSIS modem market with a 38.1 percent share in 2000, followed by 3Com with 17.2 percent, Toshiba with 13.2 percent, and Thomson Multimedia with 11.4 percent.
As CableLabs rolls out the second-generation DOCSIS 1.1, the consortium is already into the second phase of PacketCable with interim specifications and technical reports.
The specifications describe call signaling, quality-of-service and event messaging extensions to the PacketCable architecture that will allow cable operators to directly exchange multimedia traffic over managed-IP backbone networks.
"We believe that these specifications provide the foundation to deploy cost-effective technologies that will enable the industry to migrate from circuit to packet solutions in an evolutionary way," says Xiaolin Lu, chairman of the PacketCable Technical Committee and AT&T Broadband vice president of strategic engineering and IP networks.