Video over DSL.......................................
multichannel.com
Broadband Week for December 6, 1999
More Telcos Are Doing Video Over DSL
By FRED DAWSON December 6, 1999
Telco delivery of cablelike video services over their voice networks is picking up, fueled by competitive concerns and the success of digital-subscriber-line technology.
Over the past several months, the number of incumbent local-exchange carriers pursuing a full slate of TV programming over copper wires via DSL multiplexers has jumped from a handful to well over one-dozen. They range from tiny independents like Hart Telephone Co. in Georgia to giants like U S West and GTE Corp.
And according to vendors supplying the gear, there are many more telcos looking at the possibilities that have not chosen to make their interests known.
None of this adds up to a revolution at this point. But it does suggest that failed efforts to use DSL to deliver video services in the early part of this decade are no longer the standard by which the potential of the new systems should be judged.
Just ask Ron Anderson, executive vice president of Hart in Hartwell, Ga., where a test of a digital-TV system supplied by mPhase Technologies Inc. has been under way for several months.
"Our plan is to roll this product out just as fast as the supplier can have it manufactured and we can get it installed," Anderson said. "The people here who have seen this system in operation are very excited about it."
Spun off from cable-system-components supplier Microphase Corp. three years ago, mPhase has just contracted with Flextronics International Ltd. to make customer-premises and central-office gear that incorporates the mPhase system, with full production slated to begin in April.
Anderson said he expects limited amounts of the equipment to be used in a market trial within 30 to 60 days, with commercial launch occurring in the April time frame.
The mPhase technology offers an efficient way to use adaptive-rate DSL to deliver a channel of MPEG-2 digital-TV, high-speed Internet-access and telephone service over a standard telephone line at distances up to 12,000 feet from a central-office switch, mPhase president and CEO Ronald Durando said.
The platform, which can operate in asymmetric or symmetric mode, uses technology developed by the Georgia Institute of Technology Research Institute to compile and format all incoming video feeds from satellite, broadcast stations, servers and other sources for delivery in MPEG transport frames to customer premises.
Kansas-based Pioneer Communications, wireless operator Sanswire.Net and Telmex of Mexico are mPhase test customers.
"We're delivering services in real time, avoiding the delays, costs and bandwidth-consuming steps of using ATM [asynchronous transfer mode] or MPEG over IP [Internet protocol]," Durando said. The system allows individual users to select from a lineup of up to 192 channels, which Durando said would be expanded to 400 channels when version two of the system ships sometime next year.
The mPhase set-top, which will use MPEG chips from IBM Corp., serves as an "Intelligent Network Interface" that also hands off the Ethernet-formatted high-speed-data signal to the PC and the POTS (plain old telephone service) signal to standard telephones. The system costs about $1,500 per port (customer), projected to drop to $1,200 by the beginning of 2001, Durando said.
"We calculate that it would cost our customers or their competitors about $2,200 per port to equip an HFC [hybrid fiber-coaxial cable system] to support the same group of services," Durando said. "That doesn't count the fiber upgrade if the plant isn't HFC."
Hart, like many small independents, runs a cable system that it must upgrade to remain competitive with the other local operator, Comcast Corp., or replace using the mPhase platform. "We'll offer the [mPhase-based] service everywhere, which means we'll be competing with ourselves, as well as with Comcast," Anderson said.
Anderson doesn't worry about the limitation of one TV being supported by a single telephone line using this version of the mPhase system because the telco can add another line to serve a second TV.
With version two, mPhase expects to support two channels -- one in packetized MPEG-1 format, allowing the service provider to support three or four TVs with two lines. "The model in the United States is that you need to be able to serve three televisions," Durando said. "With two lines, we'll be able to meet those requirements."
For now, mPhase is focusing on the 231 independent U.S. telcos with 5,000 to 20,000 lines each, aiming at 100,000-line operators as secondary targets. "We believe we have to establish ourselves at this level before we can really get the major carriers to pay attention," Durando said.
But larger carriers are paying attention to the video-over-DSL potential, largely in conjunction with the version of the technology known as "VDSL" (very high-speed DSL).
The primary beneficiary of this focus has been NextLevel Communications LP, supplying U S West's commercial TV and high-speed-data service in Phoenix and lining up several other telcos as customers, too.
NextLevel's recent initial public offering was a hit, partially because U S West's service performance in Phoenix is starting to turn heads, Durando acknowledged. "[NextLevel is] valued at $4 billion on Wall Street, which indicates that people are taking the telco-video potential seriously, especially when you consider that NextLevel's only revenue sources have been U S West and a few trial customers," he added.
Those trials include one in Toronto with Bell Canada and another in Clearwater, Fla., with GTE. Next Level's customer base also includes several independents that have moved into commercial rollouts, senior vice president of marketing Pat Pachynski said.
VDSL delivers a higher-speed, multiple-channel video service, typically operating at around 25 megabits per second over shorter lengths of line than those used for other forms of DSL -- usually in the range of 5,000 feet.
The costs of extending fiber deep enough to shorten line lengths for VDSL have been a major barrier to industry acceptance of the technology. But the tide may be turning.
"The independents are moving fast to provide integrated voice, data and video," Pachynski said. "They recognize that bundled voice, data and video services over a twisted pair can bring them four to five times as much revenue compared with voice-only service."
At Wood County Telephone Co. in Wisconsin Rapids, Wis., the VDSL-based TV service was driven by customers demanding cable, assistant general manager Doug Wenzlaff said, adding, "Now, we have 15,000 potential subscribers interested in the service."
Some independents using the technology have become competitive LECs, expanding into other telcos' and cable operators' territories with an aggressive offering of bundled VDSL services, Pachynski said. "I think this only helps to awaken the larger telcos to the need to look at this technology," he added.
As Multichannel News reported in September, telcos turning to DSL for video-service transport include NBTel, the Canadian telco serving New Brunswick, and U.K. telco Kingston Communications Group.
These companies and a number of others still in test mode that have not been identified are applying the ADSL-based (asymmetric DSL) system that uses hardware by PixStream Inc. in conjunction with a digital-TV operating system developed by iMagicTV Inc. that delivers programming in an MPEG-2-over-IP multicasting format.
Many observers remain skeptical over whether these various approaches to adapting the narrow-bandwidth copper lines of telcos to the bandwidth-hungry needs of digital TV will ever be able to deliver services that can compete with cable. But the issue of whether or not the DSL-based video quality measures up appears to be going away.
One reliably objective assessment of the comparative quality comes from Pioneer Communications engineering director Tom Vick. The company just finished building a state-of-the-art 750-megahertz HFC plant serving 17 towns in Kansas.
"We're very happy with what we've got here, but we still have a need to reach customers that are outside of the range of the cable system," Vick said. "We've been looking at the mPhase system and others, where we would use fiber to deliver the signals to remote locations, and then send the video out over the telephone wires."
Pioneer Communications has been running the prototype version of the mPhase system over a single 10,000-foot copper connection between one of its switches and the pilot's lounge room at Grant County Airport near Ulysses, Kan., Vick said.
"We're delivering all of our 85 channels -- one at a time, of course -- along with a 480-kilobit-per-second Internet connection and POTS over the line," he said.
"It's hard to explain how good this is until you see it," Vick added. "We've had some of our cable-construction people in here, and they've come away pretty disappointed that it works so well."
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