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Optical/IP

Cable's Voice Getting Louder

Thanks to the use of softswitches, gateways, and proxy servers, cable MSOs, ISPs, and data providers are offering customers more voice choices (see Softswitches: The Gateway to Profitability).

IP phone service provider Vonage Holdings Corp. announced this week that Armstrong Cable the nation's 17th largest cable MSO, would start reselling its service, which allows customers to use their high-speed Internet connections to provide inexpensive, all-you-can-eat phone service (see Vonage Teams With Cable Co). Vonage's service is also sold nationwide by EarthLink Inc., one of the nation's largest ISPs.

The Vonage partnership isn't a huge blow to incumbent phone carriers in Armstrong's five-state coverage area, but it serves as yet another warning sign for the traditional phone services.

Read the full story on Boardwatch.

— Phil Harvey, Senior Editor, Light Reading

mu-law 12/4/2012 | 11:56:26 PM
re: Cable's Voice Getting Louder Who the heck is ISC? Weren't they some washed up IP toll guys that couldn't get anything done?

Also, looks like we've all missed the March 2003 deadline...

mu.
BobbyMax 12/4/2012 | 11:56:23 PM
re: Cable's Voice Getting Louder The voice and data services would kill RBOCs. They will no lomger be able provide the services because of reduced profitability. Cable based voice and data services are getting very popular.
alchemy 12/4/2012 | 11:56:21 PM
re: Cable's Voice Getting Louder There are something like 3 million constant bit rate cable telephony customers in the US using Class 5 switches and proprietary HDTs from Arris, Tellabs, and ADC. Comcast and Cox have the vast majority of those customers. In most of their serving areas, they've grabbed at least 1/3 of the subscriber base away from the ILEC. I get my dial tone from one of these systems and the quality is better than I got over my copper pair since there's absolutely no opportunity for cosstalk.

Voice over IP deployment over cable is still in its infancy. There are a few small PacketCable trials and a relative handful of Vonage best-effort voice early adopters. I've used Vonage a few times and I wasn't happy with the quality. Huge delays through the network and some amount of packet loss. Net2Phone bailed out of that business and it's unclear if Vonage can make a go at it. When it's fully baked, the PacketCable stuff will be better since the MSOs can control QoS on the DOCSIS network and in the routed IP network.

So far, softswitches for Class 5 applications have only killed venture capital portfolios. It's not clear if softswitches will kill the RBOCs but the combination of wireless and some flavor of cable telephony certainly will. The cable operators are talking about offering an "all you can eat" long distance plan as long as you're calling another cable telephony subscriber. MCI friends and family on steroids. The RBOCs are far too bloated to be able to compete with that.
lastmile 12/4/2012 | 11:56:20 PM
re: Cable's Voice Getting Louder A good post like this has had no immediate response from the technical guy's.
My non-tech knowledge tells me that POTS is (Almost!) dead.
Triple play is the name of the game. Copper will be the RBOC's bread and butter for a very limited time.
Ultimately they have to come out with a product that is far superior to what they can offer now.
FTTH/FTTP will give them life support in a very meaningful way. Yes it is costly to rebuild an existing copper infrastructure, but when it comes to life and death they will choose to survive.
Cable/wireless/VOIP is teaching them a good lesson.
The FCC has helped them enough.
Now it is time for the RBOC's to wake up.
Consultant 12/4/2012 | 11:56:18 PM
re: Cable's Voice Getting Louder I would cast skepticism on the claim that Cox has 1/3rd of the customers in its coverage areas where it is offering local exchange

And what is Cox grabbing? The least desirable (profitable) segment of the telecom market.

UNE-P is making far greater impact on the Bell's sagging financial wastline than MSOs.
Consultant 12/4/2012 | 11:56:18 PM
re: Cable's Voice Getting Louder Big Bobby,

It is not switching that is the decisive factor. It is the cost and provisioning cycle for local loops.

Get real or lose credibility. Have you actually done in telecom in your life?
whyiswhy 12/4/2012 | 11:56:17 PM
re: Cable's Voice Getting Louder FTTH/FTTP will give them life support in a very meaningful way.

Nope. And neither will forced bundling of DSL and local services (the current situation).

RBOCS are dead, and wireless killed them. They might survive if they separate their business units into wireless and wired, and just let one feed on the other.

Exact same will happen with data: wireless will be the last mile.

Better think FTTN.

-Why
alchemy 12/4/2012 | 11:56:00 PM
re: Cable's Voice Getting Louder I would cast skepticism on the claim that Cox has 1/3rd of the customers in its coverage areas where it is offering local exchange

The actual numbers vary from 20% to 60% depending on the particular city. The overall average is around 30%. It mostly depends on whether a particular region hates their ILEC or MSO more. Cox turned up a lot of subscribers this year.

And what is Cox grabbing? The least desirable (profitable) segment of the telecom market.

Comcast and Cox both make decent operating profit out of their telephony business units and that's with expensive Class 5 switches and proprietary/expensive HDT units to distribute voice over the HFC plant. Cox is somewhat more profitable since they don't have the baggage of the expensive and over-engineered AT&T Broadband network to pay for. Last I knew, Cox had 13 DMS-500 systems. They're both in the residential cable telephony business to the tune of 1 million subscribers and in the commercial-side CLEC business with PRI/CAS and a little bit of CENTREX. Comcast is almost 100% residential service. Most of the Comcast subscribers actually get dial tone from #5ESS gear owned by AT&T LNS from before AT&T Broadband got sold off. Some day, those subscribers will be moved to cheaper nextgen Class 5 boxes. In the mean time, Comcast is treading water waiting for VoIP to become real.

I'd argue that residential telephony in dense suburbs is really easy business since there's so little competition. I heard one Comcast executive call it "low hanging fruit." A large company has lots of CLECs knocking on their door competing for their telecom dollars. We've all witnessed the death of the residental CLEC business.

The reason cable operators are so interested in telephony is that a 3-in-1 cable, cable modem, and telephone customer almost never churns to satellite, DSL, and the ILEC. When you can show an operating profit for the business unit and reduce churn in your core video distribution business, it's a big win.
dave77777 12/4/2012 | 11:55:43 PM
re: Cable's Voice Getting Louder I strongly agree. When entrenched utilities meet competition with new technology, one of two things happens: either the utilities use their clout to regulate the competition away (as happened with electric lighting in Britain for a long while, or with maritime shipping in China five hundred years ago) or the competitors eat their lunch. RBOCs do not have the culture or infrastructure necessary to adapt.

Imho, the RBOCS are going to die a painful death at the hands of cable telephony over the next ten years. The infrastructure is too redundant.
aswath 12/4/2012 | 11:55:35 PM
re: Cable's Voice Getting Louder alchemy wrote:
The actual numbers vary from 20% to 60% depending on the particular city. The overall average is around 30%. It mostly depends on whether a particular region hates their ILEC or MSO more. Cox turned up a lot of subscribers this year.
...They're both in the residential cable telephony business to the tune of 1 million subscribers.

The following is from Cox's First Quarter 2003 Earnings Highlights:
Cox added 4,900 net Cox Digital Telephone customer additions per week during the first quarter and reached 19% penetration to telephony ready homes at the end of the quarter. Cox ended the first quarter with 782,547 total telephone customers.

Aswath
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