The Smart-Pipe Solution

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Rapid advances in broadband Internet connections, digital video
recorders, personal mobile devices and other technologies are challenging the
media industry's traditional advertising and distribution models and turning
the television world on its head.

Witness today's mixed landscape of on-demand video with the
proliferation of new business models, such as the AOL/Warner Bros. launch of
In2TV, a peer-to-peer online TV network.

Aside from the question of whether a subscription-based or ad-supported
model will prevail, it is clear that content owners are tapping into new
Internet Protocol-based technologies to actively seek more-direct contact with
consumers, bypassing the cable operators and raising the specter of networks'
becoming a commoditized dumb pipe.

This perception, however, does not tell the full story. With new
intelligence-based technology focused on service control and awareness, cable
operators are, in fact, in the position to be a key player in video-on-demand,
offering value to content owners, advertisers and consumers beyond simple IP
transport. New advances in such areas as CableLabs' PacketCable Multimedia
(PCMM) and emerging standards like IP Multimedia Subsystem (IMS), combined with
intelligent IP networking, all enable cable operators to create value that
moves them beyond simply selling commodity bandwidth.

As owners of the infrastructure, the operators can leverage these
technologies to ensure that content is delivered with a quality of service that
is necessary for consumer support. The cable operator also can monitor ad
delivery and response and offer targeted advertising, both of which are
critical to the success of ad-supported content.

Cable operators play a particularly pivotal role in allocating and
prioritizing bandwidth, thus ensuring timely delivery of content or
advertising. Content providers and advertisers do not have this capability.
Equally important, operators bring the quality of service guarantees that
content providers and advertisers need in order to provide a quality viewing
experience for the consumer in an IP world.

As further added value, operators can use network-management technology
to proactively monitor the health of the network infrastructure. That ensures
that customers always have access to their desired online content when they
want it.

Cable operators may also provide value by enabling advanced billing
options like usage-based, prepaid, pay-per-use and On Demand, giving
subscribers flexibility in configuring their service experience.

Ultimately, cable operators, content providers and advertisers will be
successful in the on-demand marketplace only if they collaborate in using
innovative technology to enhance the consumer's experience. With their
“smart” pipe, cable operators will have an essential role in making this
happen.

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