During CMTO's cc they asked about T's Lightwire and CMTO said it was the next wave and that they would be ready for it.......
zdnet.com
AT&T And Cable: Smells Like Team Spirit
By Fred Dawson, Contributing Editor, Inter@ctive Week
February 14, 2000 7:56 AM ET
The announced merger of America Online and Time Warner raises questions about Time Warner's role in AT&T's plans to build its broadband access empire over the nation's cable networks. But even as its ultimate relationship with Time Warner remains uncertain, AT&T appears to have made big strides in defining its own cable agenda and its place within the cable industry.
The AOL-Time Warner deal has done nothing to alter AT&T's strategy to build as broad a base as possible in cable through acquisitions and partnerships with other operators, says AT&T spokesman Mark Siegel. While the company might pursue the use of Digital Subscriber Line or broadband wireless in markets where it doesn't have cable affiliations, it is likely to use DSL only on a "selective basis" and for delivery of high-speed data as opposed to packet voice or television services, Siegel says.
Instead, AT&T's focus remains on securing more deals in cable, including the now year-old agreement in principle with Time Warner to use its cable network to deliver a branded AT&T voice service. "We'll continue to talk with other cable companies about partnerships," Siegel says.
Whether those partnerships can include the kind of deal that AT&T and Time Warner mapped out last February for voice service is a big question. Time Warner's prospective new owner, AOL, is committed to making broadband access to its services available to virtually every household in the U.S. That agenda makes it likely that AT&T's cable arm, AT&T Broadband and Internet Services, will face competition from AOL Time Warner in all its markets via access alternatives such as DSL. That competition will include not only delivery of "broadband-enhanced" services to the PC, but also to the TV, via the AOL TV initiative scheduled to be rolled out this spring.
Once it completes its acquisition of cable company MediaOne Group, AT&T will own cable networks covering about 25 percent of U.S. households. If it is able to come to terms with Time Warner on details of the February 1999 voice services agreement, its voice-over-cable reach would extend to more than 40 million households.
But that's a big if, as officials at Time Warner make clear. "The first order of business is to unravel the ownership question, and from that everything else will flow, including the voice deal," says a Time Warner official, speaking on background.
That question centers on MediaOne's current ownership of a 25.5 percent stake in Time Warner Entertainment, which includes cable properties, programming networks and other assets. The two sides must come to terms on how AT&T's share of that ownership is to be structured, as well as what to do about the 32 percent stake MediaOne has in the Road Runner high-speed cable data service. For AT&T, ownership of Road Runner could pose regulatory problems, given AT&T's 58 percent stake in the other leading cable data provider, Excite@Home.
It's All In The Timing
The timing for working out these issues was originally expected to be tied to the closing of the AT&T-MediaOne deal over the next few months, possibly leading to a rearrangement in the proportions so that AT&T would end up with a reduced share of Time Warner content properties in exchange for a greater share of the cable unit and completion of the voice deal. Now, with AOL poised to be the new owner of Time Warner, such decisions will have to await conclusion of the AOL-Time Warner merger, which will take the rest of the year, if not longer.
Further complicating matters on the cable telephony side is the fact that Time Warner is now preparing to enter the voice business on its own via the Internet Protocol (IP) platform that has been developed for the cable industry under the PacketCable banner. During the second quarter of this year, Time Warner plans to begin testing a second-line service over its cable system in Portland, Maine.
Some cable operators have long seen second-line service as a good entry point for their telephony plans because it doesn't require them to meet the more stringent technical requirements for primary-line service, the biggest of which is to ensure a fail-safe electrical supply to keep service running. By starting with second-line service, Time Warner hopes to take advantage of the new PacketCable platform by offering a more flexible, multiline option at lower prices than the local exchange carrier offers, without incurring the infrastructure costs of supporting first-line service, says Michael Luftman, vice president of communications at Time Warner Cable.
"The jury's still out on where we're going with first-line service," Luftman says, noting that the question of AT&T's role as provider of voice services over Time Warner's infrastructure remains unsettled.
But that issue isn't likely to stand in Time Warner's way when it comes to rolling out the IP voice service on a wide scale, assuming the test results are positive, Luftman notes. "Our usual strategy is to conduct a full market trial on a new service and, if it performs up to our expectations, to go on and introduce it elsewhere," he says. "I don't see any reason why that wouldn't hold in this case."
Packets Without IP
Although PacketCable is picking up support from Time Warner and Comcast, which started testing the technology in Union, N.J., last fall, AT&T is putting greater emphasis on non-IP packet technology supplied by Arris Interactive. AT&T has been using the Arris technology since it began testing voice services in Fremont, Calif., last year. Originally viewed as a stopgap while the firm awaited maturation of the PacketCable platform, the proprietary voice systems supplied by Arris and others have not only performed extremely well, but their costs have dropped much faster than anticipated.
"We're getting really good results in the marketplace, and the cost model is improving significantly," says Tony Werner, chief technology officer at AT&T Broadband and Internet Services. "We're seeing more vendors, including Lucent [Technologies] and Motorola, coming into this space, which will have an impact on the costs."
While the total per-customer cost of provisioning voice using the Arris approach had been about $890 at the outset of the company's first deployment in Fremont, Calif., Werner expects that cost to fall to roughly $590 by the third quarter, putting the four-line proprietary packet systems at close to cost parity with the IP option.
Werner notes that over the long haul, use of an IP voice platform such as PacketCable represents "one more bite out of the apple" in terms of cost, because the network interface units supporting IP voice also support high-speed data, thereby eliminating the cost of a separate modem for the latter. But the performance and cost trends on the proprietary system side are prompting AT&T to stick with the Arris approach on an aggressive rollout schedule affecting a large share of its systems this year, rather than jumping to the IP platform.
None of this is to say that AT&T can't move forward with telephony deals with Time Warner, Comcast or other cable companies, but the farther potential partners go without AT&T's participation, the harder and more costly it will be to put deals together.
Meanwhile, AT&T appears to be clicking on all cylinders regarding its internal cable agenda, including its efforts to improve its underlying cable architecture as well as its move into other advanced service categories, such as interactive TV, high-speed data and Web-to-the-TV applications. If work on the new LightWire architecture continues to progress along the lines recently outlined by senior engineers, AT&T could end up revolutionizing the industry's approach to delivering services.
The prospects for dramatic improvements are reflected in AT&T's plans for a third phase of LightWire, its upgraded version of the cable Hybrid Fiber-Coax network. AT&T has been testing the first phase of LightWire in its Salt Lake City cable network with strong results, prompting it to begin using LightWire for upgrade projects that were already slated for this year under the old HFC approach.
As currently deployed, LightWire extends fiber to "minifiber nodes" at interface points on the existing coaxial cable plant. That extension eliminates the need for in-line amplifiers between the node and end users. By pushing fiber deeper into the network, LightWire not only does away with maintenance and performance hassles re-lated to those amps, but also reduces the number of people contending for bandwidth over any coaxial serving area, says Oleh Sniezko, vice president of engineering at AT&T Broadband and Internet Services.
But the long-term benefits of LightWire could be much greater, as reflected in the company's thinking about the project's second and third phases. Rather than keep all the cable modem termination system functions that control distribution of data services in the headend, as is now the case, AT&T could use LightWire to put most CMTS functions in the minifiber nodes. This limits the tasks performed at the primary hubs to bundling and routing while moving other functions to the minifiber nodes, which will serve about 70 homes each.
"I'd guess that in five years, distributed CMTSes will be used in 80 percent of our systems," Sniezko says.
The key to this step is to use Time Division Multiplexing technology to distribute all traffic to and from the headend over the fiber portion of the cable network. Today's cable networks use the more processing-intensive and costly amplitude modulation scheme to carry traffic. By using TDM to deliver interactive, dedicated signals, AT&T will be able to use off-the-shelf components common to local area networks (LANs) in its minifiber nodes, Sniezko says.
Already, chip suppliers such as Broadcom are offering 100-megabit-per-second and Gigabit Ethernet integrated circuits that would make it possible to interact with end users on the coax portion of the network as if they were service nodes on a LAN. "We want to push the HFC network to look exactly like a passive optical network [PON] while still using the coax," Sniezko says. In the second phase, AT&T will use digital baseband for dedicated signals both upstream and downstream. This enables AT&T to "daisy-chain" its minifiber nodes using a two-fiber strand, in which one fiber carries conventional video programming and the other operates as an OC-48 (2.5-gigabit-per-second) bus, allowing the use of TDM devices to add and drop signals from the bus at each minifiber node.
The third phase of LightWire will involve the use of Dense Wavelength Division Multiplexing to deliver dedicated baseband signals to secondary hubs and then use DWDM at the secondary hubs to partition those signals across multiple wavelengths, so that each wavelength would carry signals for a specific minifiber hub, Sniezko says.
The key is a new generation of optical devices that can be integrated onto electronic circuits.
No other cable company has moved this far into the future. The advanced phases of LightWire address the need to not only efficiently manage such traffic across a streamlined optical infrastructure, but also to simplify provisioning of an elaborate array of services to subscribers using straightforward digital telecommunications protocols instead of the more complex ones defined in current cable data and packet voice standards.
AT&T has also taken the lead in creating an architecture for delivering advanced video services. This architecture includes a wide range of application programming interfaces designed to connect the set-top terminal operating system (OS) with server-based services via "middleware" that greatly expands the range of services.
All of this dovetails with AT&T's deal with Microsoft to introduce a set-top platform commercially this year that employs Microsoft's Windows CE Plus OS for interactive entertainment applications.
Comcast is already in this camp, thanks to a $1 billion investment from Microsoft. It could be well positioned to emerge as a close ally of AT&T, especially since it also owns a stake in Excite@Home. Industry sources also say AT&T is actively pursuing expanding its 33 percent ownership stake in Cablevision Systems.
Should these and other deals come to fruition, AT&T would be in a position to promote its new LightWire architecture on a much wider scale, giving it a long-term migration strategy toward lower costs for delivering all types of broadband services in what would, ultimately, be a realization of the long-held PON vision of what was once AT&T Bell Laboratories. Roping in enough cable allies on the voice, data, interactive TV and network architecture components of its strategy to make its cable play really pay off may look like a long shot at this point, but if it succeeds, AT&T will have pulled off the evolution to the virtually unlimited bandwidth potential of fiber-based broadband technology at a fraction of the costs its competitors would incur to match it.
No S-CDMA here, but fibre and maybe some DWDM....CMTO seemed to like this architecture in the cc.
Can anyone say what this might mean for companies like CMTO?
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