Meeting the Opportunity for Broadband Communications
By Ronald A. Durando, mPhase Technologies

As technologies continue to merge and customers increasingly demand a single source for their communications and entertainment, the lines of competition are starting to blur. Most recently, it has been the franchised cable companies who have aggressively offered high-speed Internet access via the cable wire that previously only brought television programming. But that’s starting to change as private carriers begin to extend their boundaries by offering digital television through the existing infrastructure, copper telephone wire.

Telecommunications service providers including independent telcos, ILECs, CLECs, IXCs and ISPs will soon be competing with cable TV and satellite providers moving into the traditional carrier’s service domain. With over 827 million copper phone lines installed worldwide, telecom carriers have the avenue to a massive customer base. But they need a way to provide additional services–particularly Internet access and high-margin cable television service–to gain additional revenues from this enormous asset.

The competitive threat to phone companies is very real. Franchised cable television providers have upgraded their facilities and introduced broadband, "always on" Internet service. In some areas, US cable providers have begun offering voice service over cable. Direct broadcast satellite providers offer rich television programming and narrowband Internet access. Over the next few years, satellites will improve the quality and speed of both services substantially. Private carriers with copper-based infrastructure have much to fear. However, by integrating the right equipment and expanding their product offering, a terrific opportunity awaits as well.

The stakes are high as the demand for faster Internet access is expected to increase. Broadband Internet access customers in the United States alone are expected to grow from 1.5 million today to 12.5 million by 2002. The competition is formidable as well. Cable TV is a dominant global industry–and until now, telco carriers have been locked out of this revenue stream. Customer expectations also need to be adjusted in this time of deregulation and one-stop shopping. Who would have imagined that we’d be one day speaking through cable lines and watching TV through telephone lines?

DSL — The Telco Weapon

In the broadband battle, the private carrier weapon of choice is Digital Subscriber Line (DSL) technology. DSL circuits offer subscribers bandwidths ranging from 256 Kbps to 6 Mbps and divide voice and Internet traffic so that they can be used simultaneously. DSL avoids costly congestion on the central office switch by bypassing the telephone network entirely. Users never experience the annoying busy signals encountered with dial-up modems.

The development of a Digital Video and Data Delivery System based on Rate Adaptive DSL (RADSL) technology supports simultaneous use of the telephone, Internet and television programming over the existing copper infrastructure.

DSL technology allows private carriers to take advantage of the full bandwidth capability of existing telephone wiring while providing a complete service to the customer. Carriers providing these services to multi-dwelling units avoid the costly expense of re-wiring entire buildings. Also, the time to install DSL equipment is similar to a standard cable installation.

The total solution consists of two main components, one at the central office and one on site. This proposed product solution would be located at the central office, where it combines the voice traffic from the telephone network with video programming and a dedicated, "always-on" Internet connection to deliver a single service to the customer.

By eliminating the need to install separate cable wiring, phone wire or install satellite dishes, the RADSL technology speeds the deployment of broadband services and lowers consumer costs. The customer simply installs a small box similar to a set-top cable television box that directs the voice, Internet, and television signals to the phone, computer and television respectively. And, RADSL solutions can automatically determine the length and quality of each individual line and adjust the signal accordingly for an optimum connection.

Typical DSL deployments can deliver about 1 Mb/s up to 18,000 wire-feet under optimal conditions. However the technology is capable of running over 6 Mb/s of data downstream (to the customer) and 1 Mb/s upstream (from the customer) at a distance of up to 12,000 feet on the copper telephone wire. This is 200 times faster than standard dial-up modems and 50 times faster than ISDN.

More choices too

Today, a DSL solution can deliver 192 digital television channels and will soon be able to deliver 400 broadcast-quality channels without interfering with the Internet or voice connections. This is a significant advantage over cable providers that typically do not offer more than 60 channels, or even satellite television providers that offer 175 channels. By running television over dedicated lines, there is the added advantage of eliminating piracy of the video signal that is common to cable television.

Using MPEG-2 compression, a television channel uses approximately 4 Mb/s of capacity to achieve broadcast quality. Even with this, Internet content can be delivered simultaneously at 1 Mb/s without affecting phone service.

Customer Flexibility

Through a unique service interface, customers are able to dynamically allocate capacity as needed. If a user is downloading large Internet files, he can temporarily reserve bandwidth for this purpose, giving him unprecedented flexibility over his own communications. This is a distinct advantage over cable modems and extends the target market from the residence to the small to medium-sized business. Even large enterprises or government agencies can use the DSL technology for internal networking applications such as Intranets, extranets, videoconferencing applications and digital television. This is accomplished using a proprietary transport scheme, which delivers television service with the reliability of the telephone network.

Service will be the Key

In order to win the loyalty of consumers, telcos, cable television carriers, and Internet providers are racing to deliver the best combination of services and provide a single bill. Clearly, the convergence of services is inevitable. What’s yet to be determined is who customers will trust to be their single "infotainment" provider. Cable companies have long held the reputation as being inflexible and difficult to work with. Telcos by contrast, (since deregulation) seem eager to provide high quality services at constantly competitive prices. It may be that the short-term luxury of not having to be concerned with competing (cable) service providers in their local markets may well prove to be a long-term curse for the industry. Some may say that cable has forgotten how to compete and will not be prepared to handle the impending threat of DSL services. In short, cable had clear advantages over broadcast TV, but if telcos can offer more channels with better quality (for lower prices), those advantages will quickly disappear.

Although they have been slow to react thus far, many feel the telcos have the advantage over the cable television carriers and Internet providers since their copper plant has provided reliable phone service for decades. By unlocking the potential in those wires, they will be able to distance themselves from the competition before it has a chance to catch up. And Marketing 101, teaches us that when faced with products with similar tangible benefits, consumers’ choices are often driven by intangible experiences. Although late to the game, telcos realize that the game still hasn’t really started yet. Although the early bird may have gotten the worm, it’s the SECOND mouse that will get the cheese.

About the author

Ronald A. Durando is President & CEO, mPhase Technologies. The author may be reached via email at rdurando@microphase.com