Arris: Comcast's Stealth VOIP Vendor
Stan Brovont, VP of marketing at Arris Broadband, says Arris has sold over 10,000 of its Touchstone TM402P Embedded Media Terminal Adapters (EMTAs) to Comcast for the cable company’s VOIP trials. “We’re going to get significant business this year from Comcast on EMTAs,” he says. Brovont adds that Comcast has deployed Arris’s C4 cable modem termination systems (CMTSs) for VOIP service in four trial markets: Coatesville, Pa.; Springfield, Mass.; Indianapolis; and Detroit. Detroit? Comcast has publicly acknowledged only three VOIP trials. But Brovont says the cable company is not only trialing VOIP in the Motor City but also billing subscribers there, making “trial” a questionable term. Comcast tells a different story. “We’re not trialing in Detroit,” says Robert Smith, a Comcast spokesman. “And we are not billing customers.” What about Brovont’s claim that Comcast has deployed a gateway from Nuera Communications Inc. for VOIP service in Detroit? Smith says that’s news to him.
But Nuera, a privately held company funded partly by Comcast, issued a press release in December 2002 saying Comcast had indeed purchased and deployed Nuera’s ORCA RDT-8g VOIP gateway in Detroit. A Nuera spokesman says Comcast is still using the gateway there and billing subscribers in the area for VOIP service. “They have customers running on it now, and they’re generating revenue with it,” says Joe Matibag, director of product marketing at Nuera (see Nuera Raises $20M).
Comcast’s Detroit deployment is older and based on different technology than its other VOIP trials. Instead of using a softswitch, the company put Nuera’s gateway in front of an existing Class 5 switch connected to the public switched telephone network (PSTN). Comcast inherited its circuit-switched phone business when it bought AT&T Broadband in 2002 (see AT&T Completes Comcast Merger).
Comcast has been tight-lipped about its VOIP trials -- so much so that any mention of them draws attention. At the company’s annual shareholders meeting last month, reporters pressed executives to confirm a report in The Wall Street Journal that the company plans to offer VOIP service to 40 million subscribers by 2006. Management confirmed the report, but, as Light Reading explained, Comcast is likely to capture only a fraction of those 40 million potential subscribers within two years (see Comcast's Virile VOIP Story).
However, the company’s use of Arris’s EMTAs -- little boxes that subscribers install between a standard phone and a TV cable -- adds a wrinkle. Because the devices come with built-in cable modems, customers don’t need to have high-speed Internet service to subscribe to Comcast’s VOIP service. That means Comcast can offer unbundled phone service at prices that compete with those of the telcos without requiring people to sign up for Internet service.
According to Arris’s Brovont, Comcast’s projections for voice market penetration are represented in a Venn diagram -- two overlapping circles in which some subscribers have only voice service, some have only Internet service, and some have both. “I’ve seen Comcast’s projections,” Brovont says. “At terminal penetration, voice is actually higher than data.” In other words, Comcast expects eventually to have more voice service subscribers than high-speed Internet subscribers. Just don’t ask the company to admit it.
— Justin Hibbard, Senior Editor, Light Reading