A Brief Case for Bundled Services

Cablecos Find New Ways to Add Business Voice

Regardless of whether they're offering voice on the residential side, cable companies must make voice a part of the commercial services package to deliver a competitive offering to small and medium businesses.

Cox Communications Inc. now understands that imperative well. However, when its business services unit first began to market high-speed Internet access to the SMB sector, it did not look on voice service as a priority. "An early lesson we learned is that the business market is very, very receptive to cable-delivered telephony," says Greg Bicket, vice president and general manager of Cox's operations in New England. "And they also are after a high-speed data connection."

Having discovered the bundle is a winner, Cox now has about 50,000 commercial voice customers, nearly all taking high-speed data.

"The rate of growth is handsome," Bicket says. "We're doing some 4,000 [business voice] customers a week."

Most cable companies are well behind Cox in the rollout of voice services and therefore aren't as readily equipped to make voice available as part of the business service package. Fortunately for cable operators, vendors have come up with a variety of means by which cablecos can bundle voice with data in a business service package without having to wait for marketwide rollout of telephony in any given territory. These solutions apply in some cases to the use of ancillary last-mile links that tie into the cable operator's fiber termination points in the hybrid fiber/coax network and in other cases to direct delivery of the bundled voice and data services over the coax segment without use of separate fiber or copper lines.

The flexibility to make voice part of the commercial services offering without being encumbered by the telephony agenda on the consumer side is crucial to making cable offerings competitive with the integrated voice and data packages offered by telcos over T1 and other access links, says Michael Pritz, president and CEO of Jedai Broadband Networks, a company devoted to enabling cable delivery of commercial services. "You don't have to own a switch and be operating voice services everywhere to be in a position to offer voice in the business market, because, in today's environment, you can lease access to the telephone company's switch," Pritz says.

Jedai's new platform allows the cable operator to deliver a bundle of TDM-based voice and Ethernet data services over fiber extensions from the nodes in HFC networks at costs far lower than the costs typically incurred by telcos to provide comparable services over SONET-based fiber extensions, Pritz says. "When we modeled out all the costs and factored in typical take rates, we saw a 6- to 18-month payback on our system vs. three years for the SONET approach using ADMs (add/drop multiplexers)," he adds, noting the Jedai system includes SONET-like ring protection for services.

The Jedai platform is designed to facilitate a range of fiber extension options. These options include one wavelength per fiber using 850nm multimode for very short runs, 1310nm single mode for up to 20km and 1550nm for up to 80km as well as multiwavelength configurations such as eight-wavelength coarse WDM through the 1550nm window and any mix of wavelengths in the 1310nm, 1470nm, 1550nm and 1610nm windows. With fiber widely deployed in metro areas at up to 128 fibers to the bundle, most situations will not require use of the multiple wavelength options, Pritz notes.

This abundance of fiber, the result of industry-wide upgrades to HFC during the past four years, is one of the major reasons cable operators are moving into commercial services now. A large share of the business market is within a short fiber extension from a fiber node. In the past, cable companies that wanted to get into the business market had to create separate CLECs, and build out entire backbones and access infrastructures.

"With the infrastructure it has in place the cable industry has an opportunity not to simply deliver the 'me-too' services that CLECs typically offered," Pritz says. The Jedai system makes this possible by supporting a wide range of services from a single platform, including tiered Internet and data services at up to 1gbps per business, virtual private networking and telecommuting, transparent local area network, various video-based services and the full range of traditional telephony services. By putting the TDM components into an Ethernet envelope Jedai gives operators the opportunity to migrate their customers to voice over IP in the future, Pritz adds.

Pritz says cable operators will want to use last-mile extensions that are not part of the coax distribution plant as they go after the business market. Meanwhile, there are other vendors betting a rigorous business service option over HFC will be a winner. For example, a new partnership between Advent Networks and General Bandwidth Inc. is focused on the ability to add a compelling voice service component incrementally to the commercial data package over HFC. The emphasis is on being able to deliver IP-based virtual PBX and other voice trunking capabilities in an Ethernet stream rather than operating voice in TDM mode, says Holland Young, vice president of operations at Advent.

Because Advent's Ultraband Ethernet delivery system supports delivery of dedicated switched Ethernet services in 5mbps increments over coax access links, adding a VoIP stream to the dedicated channel creates the equivalent of a voice trunk line from the headend to the customer, Young explains. "Current VoIP technology works fine for one or two voice lines over our platform. But, something like a 20-line PBX just wasn't feasible. One of our customers, Everest Connections, asked us if we could deliver multiple lines for trunking in the PRI format, and we discovered General Bandwidth with its G6 system could be a solution."

Everest, a new entrant to the bundled services arena, is building out segments of franchises it has in the Kansas City, Mo., area in competition with incumbent operators. Its ability to offer a fully featured voice component in its bundled business package over HFC is a major benefit to the startup's bottom line, says Everest CEO Kevin Anderson. "In order to make this business a success, we have to leverage both the residential and business sides, even though our primary focus is on delivering a bundled package to residential customers."

CABLE TELEPHONY FACTOID

Probe Research data show cable has 8 million cable modem subscribers, 1.7 million phone subscribers and offers broadband capability to 70 million homes. Lynda Starr, vice president of U.S. Carrier Research at Probe, suggests if cable operators move forward aggressively with voice over IP, they have the opportunity to offer a single platform for voice, video and data services. "Although the cablecos did not plan this success, they are in a strong position due to CLEC failures and the Bell retreat on broadband."

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