Cable operators will be singing the praises of voice-over-Internet Protocol (VoIP) services as they begin rolling out Internet Protocol-based phone services. The "triple play" of video, voice, and data service is a seductive lure for the MSO. [See B&C, May 3]
Expensive to install
Less expensive to install
Costly to maintain
Less costly to maintain
Can be used for primary phone service
Quality can't be guaranteed
About $300 per subscriber to install
$150 per subscriber to install
The question is, how can the MSOs make it work?
Some of the companies that have led the way to the triple play—notably Cox, AT&T, and Insight—have more than 2 million telephony subscribers who use circuit-switched technology. That's the same model traditional phone companies use, and it's more expensive and costly to maintain than the VoIP-based "soft-switching" one.
Soft-switching uses a small box in the subscriber's home called an EMTA (Embedded Multimedia Terminal Adapter). Resembling a large cable modem, it brings in phone calls, converts them to digital signals, then sends the phone call over the coaxial cable and fiber links to the headend. There, it is sent to either a telephone switch or a regional data service.
"Those companies are trying to migrate from a legacy technology with several million lines over to IP, " says Mark Dzuban, vice chairman of Cedar Point Communications, a provider of VoIP technology. The advantage of this approach, he says, is that it builds on the existing infrastructure. The EMTA can even include phone and data services, eliminating the need for separate boxes. Fewer boxes, less capital.
One solution for cable operators already on the circuit-switched path is Cedar Point's Safari C3
(Carrier Class Cable) media-switching system. It offers VoIP capabilities and can handle legacy circuit-switched technology. More important, it allows both VoIP and circuit-based systems to be managed as one. And maintenance costs are about half those of other systems. Charter Communications will use the system in selected markets.
If the MSO goes the soft-switching route, it then has to choose between PacketCable technology or Session Initiated Protocol (SIP).
The big difference is in the quality of service. SIP cannot be used to provide primary telephone service. At some point, the signal hits the Internet, where quality of service cannot be guaranteed. Such a guarantee is government-mandated. Some users find the sound quality similar to that of a cellular phone.
But there is an advantage to SIP. It is much cheaper to deploy, requiring about $150 per subscriber in capital expenses. A PacketCable-based system is typically twice as expensive because it usually involves a truck roll, which can be a tricky proposition with VoIP.
"If the installation is difficult and the MSO has to start drilling in the home, the subscriber will stay with Verizon," says Tom Beck, president of Cidco, a company that offers a wireless device that connects phones throughout the house to the EMTA.
VoIP technologies were widespread at last week's National Show, and even set-top–box makers like Motorola and Digeo are getting into the game.
Digeo CEO Jim Billmaier believes the integration that will bring VoIP services to the TV set points to telephony's future. When a call comes in, caller-ID information pops up on the TV screen. Viewers can even access voicemails through the set-top box. Such features are only part of the potential.
Because VoIP converts phone calls into data, the integration of telephone, TV, and data is extensive. VoIP users will be able to access complete call lists on their PCs, send pictures from cellular phones directly to set-top boxes, and easily manage computer-based telephone address books.
But will operators offer those ambitious services? Dzuban says no. Instead, MSOs want to offer five or six features typically offered by telephone companies. Their short-term goal: a simple package with distinct price advantages. Their long-term success may be more complicated.