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Broadwing Plans Video Services

Light Reading
News Analysis
Light Reading
4/7/2004
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Broadwing Communications LLC and Covad Communications Inc. (OTC: COVD) appear headed into the broadcast video market, as a source says the companies have teamed up with Swedish equipment vendor Net Insight AB (Stockholm: NETI-B).

Broadwing and Covad recently hooked up themselves, to link Covad's DSL offerings with the Broadwing optical network. The source says the arrangement, targeting video to the home, is being spurred by involvement from David Huber, who founded Corvis Corp. (Nasdaq: CORV) and crafted its move into the carrier space through the acquisition of Broadwing. (See Broadwing, Covad Partner and Corvis & Broadwing: Together At Last.)

Initially involved with Sonet/SDH transport, Net Insight now builds boxes targeted at circuit-like networking for video feeds and large video files. Among its customers is U.S. provider Savvis Communications Corp. (Nasdaq: SVVS), which has set up a link between Washington D.C. and New York that's used by ABC and MSNBC.

Net Insight CEO Tomas Duffy confirms that his company is working with Broadwing, although he won't give details about the partnership.

Broadwing certainly has aspirations in the broadcast and cable markets. The company in July hired Vyvx founder Delwin Bothof to help expand its video distribution business into broadcast and cable TV circles; Vyvx is the video transport subsidiary of WilTel Communications Group Inc. (Nasdaq: WTEL).

Broadwing officials wouldn't confirm whether Net Insight fits into its video plans, however. "We haven't talked about anything in public in terms of partners," says Todd Kiehn, senior product manager for Broadwing's IP business.

It's certainly feasible that Net Insight and Broadwing have teamed up, especially considering Net Insight's newly hired, U.S.-based sales manager, Steven East, is a former Broadwing executive (see Net Insight Hires Global Sales Head).

If Broadwing has aspirations on the broadcasters' market, it's probably at the transport level, says Darcey Lorincz, Savvis's senior vice president of global rich media services. "They probably will be going after the pipe side of the business and will be competition for the likes of Vyvx," he says. "We add storage and computing on top of that, so the pipes aren't as significant."

Like the defunct Dynarc AB, Net Insight started out crafting dynamic synchronous transfer mode (DTM) technology for Sonet/SDH rings -- a technology that can reserve bandwith for video, to provide the quality of service (QOS) Net Insight now touts.

Unlike Dynarc, Net Insight escaped into the video transport market, scoring wins that include the European Broadcasting Union and German broadcaster Westdeutscher Rundfunk (WDR) (see Net Insight Wins TV Contract and German TV Co. Deploys Net Insight).

Separately, Net Insight expanded today, announcing the proposed acquisition of Q2 Labs, a startup financed by founders of Qeyton Systems. Cisco Systems Inc. (Nasdaq: CSCO) acquired Qeyton for $700 million, eventually discontinuing the products involved. By contrast, Net Insight has offered the equivalent of $700,000 in stock for Q2, Duffy says. About eight of Q2's 19 employees will join Net Insight.

— Craig Matsumoto, Senior Editor, Light Reading

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romulusx
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romulusx,
User Rank: Light Beer
12/5/2012 | 2:05:55 AM
re: Broadwing Plans Video Services
Even if Net Insight will only report it in Swedish.
ksig25
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ksig25,
User Rank: Light Beer
12/5/2012 | 2:05:45 AM
re: Broadwing Plans Video Services
If I had a nickel every time I said this was going to happen, I would be able to buy a cup of coffee now!

ksig25
fanfare
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fanfare,
User Rank: Light Beer
12/5/2012 | 2:05:43 AM
re: Broadwing Plans Video Services
I had to read that comment by Darcy Lorincz from Savvis twice. It sure looked like he was saying that the run hosting over pipes that Savvis owns, and that CORV entry is insignificant since they 'only' offer transport. Don't worry Darcy, nobody here will misquote ya. ;)

Anyway, regarding centralized hosting... heck big boxes have been saying that for yrs.(sunw, big blue ..etc) I guess the issue is cost. Seems like we keep changing our minds about app service. Centralized ... back to the client ... nope .. Centralized is the way to go .. nope all apps will be run on location .. etc. ad nauseum.

Maybe some bean counter can break it down for us a bit here. Seems to me that application/processing/storage is always going to be cheaper in house. At least when you look at the costs offered by companies like Savvis ...you tend to think so. I guess the real attractive part of companies like Savvis is ... no in house tech guy (see: overworked, underpaid, coffee junkie, who keeps getting called down to secretary Betty's office to show her how to save documents to the main frame). Anyway, Centralized serving sure seems as though it could save on personell transportation. CORV's ultimate design definitely calls for centralized serving/hosting. I remember how all the edge ppl were shouting about how the best and most efficient way to run things is to run duplicate mini hubs all over the damn place (no, no, we sure won't ever need core capacity cuz inter-city traffic will be minimum.. we won't centralize .. we don't need to ... we're the X Gen.. and we know what we're talking about.)

Now, I'd like to think that centralizing is the key to everything .. cost efficiency, and every other kind of efficiency due to everything bing right were you need it to be. But, building those big things costs money-not as much as it use to since we can now run VA linux over clusters with intel chips .. but still.

Anyway, I'd appreciate hearing from some who know about relative costs etc. So we can compare and contrast (I had a professor who loved to say that on all her tests).

cheers,

ff
materialgirl
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materialgirl,
User Rank: Light Beer
12/5/2012 | 2:05:41 AM
re: Broadwing Plans Video Services
Total Cost of Ownership shifts with technology. It also remains a matter of conjecture, as costs and opportunites are poorly understood. For instance, if you outsource your computing and a technology change comes along that your outsourcer does not jump on, what is the cost to you? Who knows. Generally, as the industry matures, outsourcing will become less risky in this regard.

As to operational cost, it was indeed optimized via centralized mainframes, and decentralized with the PC. However, the proliferation of little servers everywhere became uneconomic again. The industry struggled with big Unix servers, but as you said, is now going to Linux clusters.

Theoretically, a shared resource of Linux clusters would be cheaper to run than little islands, due to the spare capacity users need to keep on hand to handle bursts. That "buffer capacity" would be shared in a centralized setup, sort of like insurance shares risk. The question then becomes how big that spare capacity number becomes relative to baseline capacity. With Web based traffic, it is clearly a large number.

On top of that is software licensing costs. This is changing daily with the advent of open source. As users gain control of these costs, instead of vendors, it will also allow for more centralized processing, as users become free to apply one license over a varying number of people without paying $500/user. This trend is evidenced by the success of salesforce.com vs Siebel.

Once transport gets cheap enough, and if the latency is tolerable, it becomes cheaper to arbitrage labor cost and move to the lot to India.
fanfare
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fanfare,
User Rank: Light Beer
12/5/2012 | 2:05:36 AM
re: Broadwing Plans Video Services
Thank you for your contribution. Clearly you work in some resource capacity (IT solutions). I appreciate your perspective .. it was very helpful.

"when transport becomes cheap enough"

yup.. I think thats the world that Dr. Huber envisions. Interesting comment about India. No doubt we will always try to outsource everything possible to that country filled with cheap IT labor. However, one area, I believe we will keep and manage here... content for broadcast entertainment. I think someone mentioned a utopian infrastructure where all content could be managed centrally (at least local to each provider) and sent out over pipes such as the ones BW has available.

I don't know about you .. but I love this game... it's the best I've seen so far ...and we're still in the beginning of the 1st quarter.

Please feel free to post your comments anytime.

ff
fanfare
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fanfare,
User Rank: Light Beer
12/5/2012 | 2:05:35 AM
re: Broadwing Plans Video Services
Savvis looks like a good company.... since they are so hell bent on providing the best for their customers.... why the heck don't we handle their inter-city transport?
Sparxe
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Sparxe,
User Rank: Light Beer
12/5/2012 | 2:05:10 AM
re: Broadwing Plans Video Services
If I had a nickel every time I said this was going to happen, I would be able to buy a cup of coffee now!

ksig25
................................................

I can vouche for you. Do you think I said it enough to qualify too?

This is a giant-step in an unstoppable business model. BRW is a potential XM / Sirrius for wired users. COVD is the perfect partner too.

This is where the big money is headed to go next. Get in now. CORV is going to be $5.00 soon

Sparxe Nj < the poster who called it right since July 2000.
Tess
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Tess,
User Rank: Light Beer
12/5/2012 | 2:04:32 AM
re: Broadwing Plans Video Services
http://www.wallstreetreporter....
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