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Optical/IP

Network Planning Is Kids' Stuff at NCTA

SAN FRANCISCO -- The 2005 National Cable & Telecommunications Association (NCTA) National Show -- Only at a cable content and infrastructure show, could you hear John Chambers, the CEO of Cisco Systems Inc. (Nasdaq: CSCO), make the following stunning admission: “I think it is a very good idea to have at least one person on your management team who grew up playing video games.”

Uh-oh. Could it be that soon we'll see a new crop of executives that remind us of the Tom Hanks character in "Big" taking over Cisco? Not really. Chambers, who was speaking on a panel with Dreamworks SKG co-founder Jeffery Katzenberg, Time Warner Inc. (NYSE: TWX) CEO Jonathan Miller, Google (Nasdaq: GOOG) president Larry Page, and Comcast Corp. (Nasdaq: CMCSA, CMCSK) CEO Brian Roberts, was only copping to the fact that living in a converged world is a young man's game. The teens and twenty-somethings who grew up in the culture of high-definition TV, multiplayer PC gaming, iPods, and X-Boxes don't like TV commercials [ed. note: unlike the rest of us], and they want to watch whatever they want, anywhere, anytime. And the assembled panel repeatedly pointed to "the kids" as both the predictor of, and the driving force behind, the future of content delivery in a world of converged networks.

Now all the adults have to do is create the content, deliver it, and find a way to bill someone.

But converged networks represent more than just a youth movement, according to the panelists. It forces network operators and content creators to be more flexible. They have to provide stuff in a way people can use however it best suits them. Katzenberg referred to this phenomenon as the “democratization” of content.

The single product that symbolizes this consumer empowerment for many is Tivo, the personal video recorder. Comcast's Roberts said his company's agreement with Tivo was not just about providing a function: "People are beginning to think about Tivo in a sort of religious way… to the point where they want their own Tivo, not a substitute.

“Convergence is clearly here, it’s happening and consumers love it,” Roberts says.

What's also clearly happening is that there's a service component to Tivo that isn't present on competitive devices. And that's important because it goes a step beyond just providing a tapeless VCR.

What consumers also love, apparently, is flexibility and choice. Roberts says Comcast has delivered roughly 100 million video-on-demand (VOD) orders this year, and the majority of those customers were young people. Such revelations should be equally frightening to companies such as Blockbuster that didn't get to rent those titles to consumers directly, as it is elating to equipment vendors, who get tapped to supply the gear that powers Comcast's VOD infrastructure.

Comcast’s Roberts says the takeaway from the discussion is a challenge to the cable industry: Network operators need to make specific customer experiences -- such as doing a Google search on the Internet -- comparable across all devices. “And then you take the search of the great content, and you give the people what they want, and I think that’s the world that we are all headed into."

And even Cisco, probably with a video game guru lurking in its executive offices, says its mantra is to be as open as possible. “From a networking perspective,” Chambers says, “it is not so much about betting on one content delivery technology or another as it is building flexibility into the network.”

— Mark Sullivan, Reporter, Light Reading

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