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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony

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To: Stephen B. Temple who wrote (2069)12/8/1998 8:35:00 PM
From: Stephen B. Temple  Read Replies (2) of 3178
 
AT&T's IP Telephony Cable Plan/ No Done Deal

December 8, 1998

AT&T Corp.'s grand plan to
create a national Internet Protocol
telephony network linked to cable outlets
may take longer to fulfill than recent
pronouncements suggest.

Although the cable industry's PacketCable
task force at press time was close to
issuing its first set of specifications for
such services, key cable players within
and outside the AT&T camp are skeptical
that the industry will be able to roll out
commercial voice-over-Internet Protocol
(IP) service by the middle of 2000, a time
frame targeted by some operators.

Issues standing in the way have to do
with the state of IP voice technology
itself, the time it will take to produce
components optimized to the new cable
specs and the business difficulties
associated with linking disparate networks
to a common management control regime.

"There are a lot of hoops you have to
jump through to overcome the latency
and other issues," says Jim Chiddix, senior
vice president of engineering at Time
Warner Cable
(www.timewarnercable.com). "IP is
fundamentally a bad transport structure
for video, voice or any isochronous
communication."

Time Warner Cable is a founding member
of the PacketCable initiative. But if and
when the company decides to offer voice
services beyond its initial service base in
Rochester, N.Y., that decision won't hinge
on the availability of the IP voice option,
Chiddix says.

"Holding back on taking advantage of a
business opportunity so you can take
advantage of a new technology is usually
a disappointing process," he says.

Although AT&T (www.att.com) and its
prospective new cable property, Tele-
Communications Inc. (www.tci.com), are
heavily touting the integrated service
potential of IP voice mixed with other
forms of IP data over broadband links,
plans for telephony service launches over
TCI networks in the year ahead are
focused on proprietary systems, such as
TCI's use of cable phone technology from
Arris Interactive Inc. in Hartford, Conn.

When asked whether TCI will move to the
IP platform within the next 18 months,
one senior TCI executive rolled his eyes
and said, "No comment."

Calls Waiting

Senior engineers at some of the key cable
company backers of the PacketCable
initiative suggest true first-line quality
service over IP channels might take much
longer to achieve, despite considerable
progress on several fronts within the
vendor and operating spheres outside
cable.

Last month's agreement among Bell
Communications Research Inc.
(www.bellcore.com), Cisco Systems Inc.
(www.cisco.com) and Level 3
Communications Inc. (www.l3.com) to
resolve their differences by proposing a
new version of a key IP telephony
protocol under consideration by the
Internet Engineering Task Force
(www.ietf.org) dovetails nicely with
PacketCable's direction, but it doesn't
mean the product base for interoperable
systems under that protocol will
materialize anytime soon.

"You can say that this is progress," says
one engineering executive, who insisted
on anonymity. "But when you consider
that the IETF is having to go in and rip
out some of the existing [H.323] standard
to accommodate the new one, you're
forced to recognize things are moving
slower than some of the optimists would
have had us believe a few months ago."

The compromise protocol, known as the
Media Gateway Control Protocol, specifies
a means to deliver Signaling System 7 and
other Intelligent Network functions over
IP networks. The new protocol contains
elements of the Internet Device Control
Protocol announced last summer by Level
3 and the Single Gateway Control Protocol
(SGCP) developed by Bellcore and Cisco.

PacketCable already was moving toward
endorsing SGCP and now can expect to
see wider vendor support for its choice,
officials say. The integration of the call
control mechanisms of the public switched
telephone network and IP telephony
networks will enable customers to access
services, including voice and fax, without
modifying telephone and fax equipment or
dialing access codes, says Christian
Huitema, chief scientist for Internet
architecture at Bellcore.

"The industry was faced with either
picking one protocol or implementing
both," Huitema says. "By merging the two
proposals, we resolve the dilemma,
provide a safer environment for the
manufacture of telephony gateways and
ensure the development of the call agent
architecture."

The Bellcore/Level 3 agreement marked an
important step in the right direction, but
it's only one of many that must be made
before cable can expect all participating
networks to be linked via the same call
management, network operations, billing
and other protocols, says Scott St. Clair,
director of corporate communications for
8x8 Inc., a member of the PacketCable
royalty-free licensing pool. While St. Clair
expects to see testing of
PacketCable-compliant systems by the
end of next year, he doesn't anticipate
wide-scale commercial deployments until
late 2000 or 2001.

The first set of PacketCable specs,
targeted for issuance this month, will
focus on a consumer-oriented, first-line
service, with business-level and video
telephony specs to follow next year.

The consumer service will use multimedia
terminal adapters (MTAs) pegged to
architecture proposed by 8x8 and others
to pass signals back and forth between
the cable data network and standard
Touch-Tone telephones, serving up to
four separate phone links per household.
These MTAs can be integrated
components of stand-alone Data Over
Cable System Interface Specification
(DOCSIS) modems or "whole house" line
management devices that connect to all
the phones in the home.

Under the PacketCable service model,
each local calling area cluster within the
PacketCable "cloud" must be
interconnected with other clusters
through standardized interfaces that
ensure seamless operations for " on-net"
calls, or calls from one PacketCable
customer to another, no matter where
they are located around the country. This
means participating companies must agree
on how to handle back-office
administration, such as billing,
provisioning, network monitoring and
management, as well as how to pass
signals through gateways to the public
switched telephone network or to
adjacent PacketCable networks.

All of this represents a very tall order
when it comes to setting specs prior to
accumulating considerable field
experience, says Don Burt, president of
Probita Inc., an engineering E H consulting
and systems integration company that is
working on the cable industry's DOCSIS,
PacketCable and OpenCable initiatives.

"Getting fully interoperable, scalable
systems is going to take longer than many
people realize," Burt says. In fact, trying
to derive the whole set of specs before
going to early commercial deployments
could be a mistake, Burt says, given the
surprises that could lurk in the field
experiences to come and the freedom
vendors will need to adjust their systems
to accommodate those issues.

"Since a lot of these issues can be
mediated in software, it might make sense
to allow more flexibility early on to
accomplish interoperability quicker in the
long run," Burt says.

Fused Backbones

Beyond the question of how fast an IP
telephony platform can be developed, the
cable industry has yet to resolve the
issue of how to interconnect its high-
speed data backbone networks. In
addition, the proposed plan by AT&T and
TCI to extend the reach of voice services
by forging partnerships with other cable
operators raises the question of how
cable systems that decide to deliver voice
service via circuit switching will do so.
Regarding cable partnerships with AT&T,
John Malone, TCI's chief executive officer,
says that, strategically, it makes no
difference whether a particular cable
system provides the voice service in IP
format or via circuit switching. "Whether
they do IP telephony or whether they do
switched circuit, that's sort of irrelevant,"
Malone says. "But it all has to be
integrated technologically, or it won't
work."

The demarcation between the voice bits
and other signals -- whether they're all in
IP or in mixed formats -- has been a
sticking point in negotiations between
AT&T and such prospective partners as
Time Warner Cable and MediaOne,
according to some insiders. "It's proving
hard to agree on who controls the bits,"
says an executive close to the
negotiations.

Malone makes it clear he would prefer
"integrating the data streams and routing
them rather than switching them." With
data integration, " telephony could be
very cheap," he says, pointing to the
possibility of integrating voice service
within the broadband service offered by
At Home Corp. (www.home.net).
"Presumably, the voice telephony traffic
could be a tiny component within the
@Home [Network] data stream and on the
@Home data network, " he says.

Malone suggests that accomplishing such
efficiencies over data beyond the @Home
clusters would minimally require
contractual agreements with other data
providers, such as Road Runner
(www.rdrun.com), the cable data venture
of Time Warner Cable and MediaOne. "You
have to have consistent routing," he
says. "All the infrastructure has to be
consistent."

So far, efforts to achieve this level of
integration, with agreement on how bit
streams are managed, prioritized and paid
for, have not gotten very far -- despite
the existence of a task force, under the
guidance of Time Warner Cable CEO Joe
Collins, that is dedicated to creating such
an integrated national cable data
backbone. Leo Hindery, TCI's chief
operating officer, said last summer that
he hoped to reignite merger talks between
@Home and Road Runner in the interest of
accomplishing such integration, but Road
Runner officials indicate they are no
longer interested in pursuing this course.

Says one executive in the Road Runner
camp: "There's nothing in play on that
front."
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