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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 (2061)12/8/1998 8:41:00 PM
From: Stephen B. Temple  Read Replies (1) of 3178
 
Cable net services need work

December 8, 1998

Network World:
Anaheim, Calif.

The cable TV industry has a long way to go
before it can deliver broadband data services
as widely and reliably as traditional data
carriers do.

A standard for cable modems is helping, but
other issues, such as the inability of most
current cable networks to support two-way
da ta, are slowing the deployment of what
could be an economical way to support
telecommuters, according to experts at the
Western Cabl e Show.

Cable modems have the potential to carry
data at multimegabit speeds from homes to
cable switching centers where the traffic can
be dropped onto the Internet. Using
encryption, the remote user can create a
secure Internet link to a corporate Web site
to gain acces s to the company LAN.

Technology demonstrated at the show
supports IP telephony over cable networks,
and that could be used to extend the
functions of cor porate PBXs from company
headquarters to phones in employees' homes.

Because many cable providers are trying to
sell the service to residential Internet users,
the price of cable modem Internet access is
low, about $40 per month.

But the recently adopted cable standard,
known as data over cable service interface
specification (DOCSIS), is still being
implement ed by modem makers. Certified
interoperability among vendors' DOCSIS
modems is expected by year-end.

Standard modems

DOCSIS will make it possible for customers to
buy standard modems themselves rather
than relying on the service provider to supply
a proprietary modem. Shifting ownership of
the customer modem reduces costs for cable
providers and makes offering the service
more attractive, according to Tom Hagopian,
vice president of service provider
Cablevision.

DOCSIS has been a long time coming. "Seven
years ago, I first got involved in discussions
about cable modems, and we still haven't r
eached a million customers," says Avram
Miller, director of business development for
Intel. "We need to spend some time
wondering wh ether we could do better."

In addition, cable networks are plagued by
other problems. Most of the existing
networks still do not support two-way traffic
on the cable, a requirement for broadband
data exchange that could support Internet
access and Internet virtual private networks
between t elecommuters and corporate sites.
Two-way cable networks require expensive
upgrades to the cable as well as hardware to
transmit the data.

IP telephony over cable is also attractive to
corporate users, but it is in its infancy.
Potentially, IP telephony represents a way to
extend corporate PBXs to remote users. At
the Western Cable Show, major network
vendors, including Cisco, 3Com and Lucent,
showe d IP telephony capability using some
of their gear in conjunction with other
vendors' equipment. But they were generally
kluged conf igurations, not carrier-class
systems.

Adding to the problem is the fact that cable
operators are focused on providing television,
not on providing data and telephony serv
ices. Therefore, they are more reluctant to
sink money into those areas. "Telephony and
Internet access were incremental
businesses, and, quite frankly, are still not
core businesses of the cable industry," says
Mario Vecchi, vice president of broadband
developmen t for America Online.

As a result, many cable providers that are
dabbling in data over their networks use
dial-up modems as the return path for
high-speed Internet access over the cable
network. "That has limited WebTV so far,"
says Alan Yates, director of digital television
platformin g marketing for Microsoft. WebTV,
which brings Internet access over cable TV
sets, could benefit from that path to support
interacti ve television shows and advertising,
he says.

A panel of Silicon Valley executives told a Western Show audience that cable providers
face competition from digital subscriber line
(DSL) and satellite technologies, both of
which can support broadband Internet
access to the home. But the battle has not
been as fierce as it could be, according to
Miller. "The phone companies aren't investing
heavily in DSL," Miller says.

Unfortunately for corporate users, critical
cable network upgrades may rely on the
popularity of cable Internet access among
general consumers. Their demand for
services will drive network improvements,
Vecchi says.

<<Network World -- 12-07-98, p. 12>>

[Copyright 1998, Network World]
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