A Whale of a Cable Phone Concept

At about the same time the cable industry developed high-speed data services over HFC (HSDoHFC if you need yet another acronym to fill your Christmas stocking)-and CableLabs stepped up with the roll-off-the-tongue DOCSIS-marketers said they would target the small-medium sized business (SMB) customer. In the ensuing decade or thereabouts since, HSDoHFC has surpassed even the maddest scientist’s wildest dreams; VoIP has developed into a nice niche residential business, and marketers still talk about targeting SMBs. Not to overly abuse the marketing guys, but the SMB is a pretty viable market, and HSDoHFC is a pretty viable technology, so .… "The business customer wants to buy something. They’re a very underserved market," said Ken Stess, vice president of corporate business development at Whaleback Systems. Low hanging fruit Not only is SMB underserved, it is, to coin a phrase, low hanging fruit. They’re too small for the telcos and too much bother for the residentially focused cable industry. And they’re getting antsy, which is why you find fixed broadband wireless WiMAX and even some satellite plays creeping into a space where the doors should be barred and padlocked. SMBs "have antiquated equipment; the buttons don’t work on all the phones, and the person that installed the system is no longer with the firm," Stess said. Whaleback’s idea is to serve these SMBs, most of whom already have broadband connections, with phone equipment that interfaces into a cable operation. Neither the cable operator nor the end user has to do much more than a Philadelphia Eagles running back, which is to say, just stand around and watch Whaleback throw the ball. Pitched and branded "We are pitching it and branding it as Whaleback," said Stess, broadly hinting he wouldn’t object if an MSO decided to step in and help. "The discussions with the cable companies are that most likely it will be a co-branded piece." The Whaleback model-a flat price, managed service with a centralized monitoring system that watches the health and configuration of the network-could almost be called your father’s telephone system. "We’re delivering an all-inclusive service very similar to what was delivered 40 years ago by AT&T and Western Electric where you signed up for the phone, it got delivered by Western Electric, and AT&T supplied the dialing plan and access. We’re providing all the things you need for a business phone solution including the handsets, the server, the set-up and configuration, and the maintenance and monitoring, along with the local/long distance calling for a flat monthly rate," Stess said. While fully managed, Whaleback’s offering not a hosted Centrex, said Ray West, Whaleback’s vice president of engineering, who co-founded the company with Mark Galvin after leaving Cedar Point. "The Centrex solution wants to fight with what the cable operators are trying to deliver where they’re building their own backbone infrastructure and have Cedar Point or Siemens or somebody building a phone system for them," said West. "A Centrex puts a strain on those resources and complicates their network." IP PBX model Whaleback uses the IP PBX model by putting its equipment on the premises and letting the cable operator leverage its existing back-end gear. "All the headend equipment they’ve invested in they re-use and utilize to connect into us, and then we put the PBX on the customer premises. The customer owns that," he said. The idea is to feed typical commercial services-phone and data-to small customers with perhaps dozens, not thousands, of end users. Whaleback provides the end points or phones, the server, the software, and configuration. While the company’s cable heritage makes it MSO-friendly, it "can work with anything that can provide an Internet connection," West said. The residential inverse Each phone call requires about 100 kb of bandwidth, which, West continued, is not a problem because cable systems were modeled for residential voice, and the commercial usage is the "inverse" in terms of contention. More advanced DOCSIS 1.1 and 2.0 specifications also help because "the cable modems can be provisioned to have a certain amount of pre-provisioned bandwidth … providing the phone trunks with adequate bandwidth for the number of concurrent calls that it would require," he said. Most importantly, the idea makes financial sense for everyone: Whaleback, the SMB and, if interested, the cable operator. "There’s some good margin here," West said. "A number of people have been trying to market voice-over-IP as opposed to a good solid phone system. We’re installing a good, solid phone system that offers features … that people are used to having on their traditional phone system. When they start looking at their existing phone system bill vs. our bill, there’s a lot of room in there for them to save money and for us to make a good margin on what we’re delivering." –Jim Barthold