How can cable compete with the telcos in the business services market? On Oct. 18, vendors and operators gathered in Atlanta for the SCTE Hot Topic Symposium on Business Services and examined that very question.
The answer focused on the small-to-medium-sized business (SMB) market segment and the importance of simplicity, reliability and superior customer service. Competitive advantage? "We are at war: cable companies vs. telcos," said Ken Fitzpatrick, SVP commercial services for Time Warner Cable, in his opening remarks. "We’re going to win by taking those business telephone lines."
Fitzpatrick characterized cable’s foray into business services as an opportunity to tap a $20 billion market dominated by the likes of Verizon and AT&T.
"Everyone wants to know what they’re doing is important to their company and the overall industry," Fitzpatrick said. He encouraged strategists to ask themselves, "What do I have to evangelize in my community in order to help my MSO?"
Fitzpatrick stated his belief that there has never been a more exciting time in the cable industry, characterizing this time as a one in which operators have many options. "The tipping point will come when cable companies venture outside of their comfort levels and find new revenue streams," Fitzpatrick said.
Jim McGann, vice president and general manager of Charter Business, echoed Fitzpatrick’s assertion that SMBs should be targeted as a valuable revenue stream. McGann defined an SMB as any "company with 50 or less employees, typically 20 or less, with 12 or less telephone lines."
In order to successfully approach those SMBs, McGann suggested, cable operators should let businesses know "what cable can offer that will save them time." And in order to maintain those SMB customers, cable operators must "do what (they) say (they)’re going to do, from sales to installation, thousands of times a day."
Only then, McGann said, will cable establish something he called SCA or sustainable competitive advantage over the telcos. While McGann jokingly apologized for introducing a new abbreviation into the thick alphabet soup that is cable industry jargon, he said SCA would help cable "steal market share from Verizon and AT&T." Engineers and marketers Building on McGann’s theme of the importance of promise and delivery, Kevin O’Toole, vice president of commercial services for Comcast, offered a comparison between the objectives and experience inside a cable operator’s engineering department vs. its marketing department on any given day.
According to O’Toole, engineers experience Moore’s Law in action. They are enterprise oriented. Engineers deal in disruptive technologies with an eye on helping shareholders grow equity. In contrast, marketing is customer oriented. Marketing departments deal directly with sales representatives and customers clamoring for reliability, simplicity and innovation. Success is measured by how many times a customer says "yes." O’Toole offered Comcast as an example, noting that Comcast needs to hear "yes" 300,000 times next year.
"The result," O’Toole said of these opposing objectives, "is conflicts in world view and the pace of technical innovation."
O’Toole emphasized the need for mutual respect on both sides and that product management is needed to help set priorities. Cooperation between engineering and marketing would allow operators to handle the "question of when: When will the customers demand new features? And when will we need to invest in order to hit those windows?"
Gone are the days when cable customers sat passively and waited for their neighborhood to receive service. As the consumer becomes increasingly tech savy, demands become more specific. They want what they want, when they want it, or they will turn elsewhere.
Salespeople need to be certain that what they promise the consumer is something that engineering can actually deliver. On the flip side, engineering must help salespeople understand their operator’s technical capabilities so that they can advertise specs to the consumer. Communication is essential. Claims must be backed up by both the hardware and the customer service.
O’Toole added that despite their differences, both engineering and marketing agree that "the world is going IP, and B2B is a huge opportunity."
Gary Cronk, vice president of technology strategy for Time Warner Cable, pushed the frame of discourse toward practical customer demands. "Small business customers are still underserved by the telecom companies," Cronk said. "They want the bundle, and they want that bundle to be transparent."
Cronk listed specific items SMBs will look for when choosing a carrier: a simple, readable invoice; flexible pricing, feature and services configuration; self-service portal-management of an account; and order entry, among others.
"The success factor is going to be a better customer experience," Cronk said, emphasizing that it will no longer be acceptable to be reactive, to wait until the customer calls to report a problem. In order for cable operators to meet the requirements of their service level agreements (SLAs), they must have the technical diagnostic troubleshooting capability to offer faster solutions for a more discerning business consumer. Leadership and change Wayne Davis, CEO of Vyyo, discussed the importance of leadership during this pivotal time in the cable industry. In his introduction of the keynote address, Davis emphasized the value of leaders with clear vision who can guide the industry toward changes it may otherwise be reluctant to make.
Bill Stemper, president of Comcast Business Services, continued this theme, beginning his keynote address with a humorous anecdote about the human disinclination to sacrifice. In essence, the story illustrated an important point about how the cable industry may collectively say that it wants change, new business and to be seen as serious competition for telcos, and yet at the same time pushes back against taking drastic action in furtherance of that goal.
The opening presenters at this year’s event offered a consistent message: If cable is going to take a bite out of the telco business market share, the industry must embrace more disciplined principles of customer service, deliver with consistency, increase transparency and commit to making painful but necessary technological upgrades that will keep cable in the game for years to come. Jennifer Rinaldi is associate editor of Communications Technology. Reach her at email@example.com. Sidebar: White Paper Summaries Here are summaries of the white papers presented at the SCTE’s Business Services Symposium in Atlanta.
MSO VoIP-Adjunct Interface to Legacy Key Telephone Systems
Alrington McNichol and Walter Daniel, ARRIS
Incumbent voice service providers like Verizon and AT&T have unlimited business calling plans. By bundling low-cost DSL with higher-cost basic services, they provide strong price competition to attract SMB customers. By way of a competitive response, cable operators are employing services such as IP-trunking for IP PBXs and are offering alternatives such as IP Centrex or hosted IP PBX services. By 2011, there will be an additional 5.199 million KTS lines shipped to small and medium businesses. The average size per KTS is around 12.75 stations. To add muster to their SMB revenue potential, cable operators can use EMTAs to augment these KTSs for IP capabilities.
Video–The Cable Operator’s (not so) Secret Weapon to Winning Business Service Contracts
John Hartung, EGT
Cable operators are focused on winning commercial accounts by offering voice and high-speed Internet services, yet they sometimes neglect the one service they do so well–video. By expanding edge or enterprise services by adding local, customized digital video services, cable operators can gain a competitive advantage over the telcos while recognizing both bandwidth and cost savings. To capitalize on this opportunity and seamlessly insert business or community-based video into the digital channel line-up, the operator will need to deploy digital conversion equipment at the edge of the network. This equipment for edge service expansion will include technologies and architectures that cable operator engineering teams are familiar with and have at their disposal. By combining MPEG encoding, QAM deletion and insertion devices and digital set-top boxes, cable operators can quickly put together a customized and unique enterprise video solution.
Leveraging Ethernet and DOCSIS to Deliver T-1 Services
Tee Harton, Vyyo
Cable operators can inexpensively tap an ongoing source of revenue by leveraging Ethernet and DOCSIS capabilities that already exist within the HFC networks they are using to service residential customers. Since those networks are already in place handling high volumes of IP-based traffic, it is worth exploring how to use those networks to go beyond the residences and into the SMBs within the cable operators’ territories. A cable operator can invest approximately $2,700 per T-1 link to transform IP-based content traversing Ethernet ring networks by translating that IP material into business-friendly TDM formats, including and probably especially, TDM T-1s. The reward for the operator that does this is about $250-400 per line per month from a business customer, which is more than four times today’s residential ARPU.
Cost Effective Cellular Backhaul via Unlicensed Wireless Solutions
Brent Patterson, Motorola
The opportunity to grow revenues for U.S. cable operators by offering cellular backhaul service is significant. With estimated growth in bandwidth and throughput demand and cellular tower penetration rates, forecast revenue for cellular backhaul is expected to exceed $15 billion in annual revenues in the near future. Cable operators have an excellent opportunity before them, but in order to gain as much of the market as possible, cable operators will require the use of multiple backhaul technologies. One such solution is the use of unlicensed IP wireless radios. Through the use of enabling technologies such as multiple-input multiple output, OFDM, dynamic frequency selection, adaptive modulation, and synchronization these radios can be used to provide a very high throughput and reliable network for cellular backhaul. With a strong understanding of basic RF principles and an understanding of the radio’s behavior, highly reliable links can be engineered.
Cell Tower Backhaul Solutions for MSO Networks
Robert Castellano, Alcatel-Lucent
The advent of high value mobility services, new cellular access technologies, and the transformation of the wireless core network infrastructure are placing unprecedented capacity demands on the mobile backhaul network. Cell site capacity requirements that were traditionally on the order of 1-3 Mbps per base station, which were satisfactory for basic mobile phone service, are now having to scale two to 10 times and beyond to meet the growing demand for high value data services. Cable operators are uniquely positioned to leverage their advanced metro-transport and HFC networks enabling the delivery of hundreds of megabits to gigabits of capacity to the cell site. HFC networks are well-supported by broadband Nx10 Gbps DWDM metro networks that were developed for the delivery of throughput intensive digital TV, VOD, and other residential triple-play services. These ingredients provide the reach and capacity to deliver Mbps/Gbps services to hundred of cell sites in a cable operator’s territory.
Understanding Wireless Backhaul
Randy Eisenach, Fujitsu Network Communications
Providing broadband services to mobile cell sites represents a tremendous business opportunity for cable operators. Utilizing their widely deployed, deep fiber networks, cable operators are uniquely positioned to provide services to cell sites. Unfortunately, there has been widespread confusion in the cable industry over the types of services and underlying technologies required by wireless service providers for backhaul applications. Wireless service providers have very specific transport requirements, which are directly traceable to their wireless equipment specifications and historical deployment patterns. Understanding these underlying requirements will enable cable operators to better provide the networks and services optimized for wireless backhaul applications.
OTN Outperforms SONET/SDH
Benoit Legault, Ciena
SONET/SDH networks brought reliability and manageability to optical transport networks, but lacked efficiency for packet services and high-speed private line services. Ethernet brought flexibility, simplicity, high throughput and cost-effectiveness to local area networking, but has lacked the deterministic performance and manageability to be considered for business services transport. The International Telecommunications Union’s G.709 OTN protocol offers the best of both SONET/SDH and Ethernet. This technology enables a wide range of services over dedicated fiber to the business for metro and access networks, effectively creating a converged infrastructure. Supported services include Ethernet private lines, Internet access, Layer 2/3 VPN access, storage/mainframe extension, and more. It can also transport SONET/SDH natively to protect past investments in SONET/SDH gear.
Compelling Alternatives: DOCSIS 3.0 over HFC or RFoG for Business Services
Michael J. Emmendorfer, ARRIS
In an effort to maintain a leadership position in the marketplace and to leverage its extensive capital investment, the cable industry, through the development efforts of DOCSIS 3.0, can provide the ability to increase the data throughput capabilities for residential and business services, without network-wide upgrades. Cable operators have built an extensive HFC network infrastructure and, combined with the arrival of DOCSIS 3.0, this may be sufficient to support the majority of SMB service needs, minimizing costly fiber builds. DOCSIS 3.0, coupled with traditional HFC technologies and/or emerging RFoG technologies, will provide an excellent end-to-end solution architecture for business services. The resulting system will be capable of supporting data services with throughputs of 100 Mbps or more while leveraging existing data and voice networks and systems.
Provider Backbone Bridge (PBB) and Provider Backbone Bridge Traffic Engineering (PBB-TE) Bringing Scalability and Reliability to Networks for Delivering Commercial Ethernet Services
Peter Green, Nortel
The limits of today’s Ethernet have left operators searching for solutions to increase service scalability for tens of thousands of customers and to eliminate the explosion of Ethernet MAC addresses, provide traffic engineering with better than 50 ms resiliency, while maintaining the operations, administration and maintenance (OAM) sophistication they are used to. By extending today’s Ethernet forwarding plane, a next-generation metro network is achievable with no loss of functionality, compared to other technologies, while maintaining Ethernet cost points. An all-Ethernet solution can provide service scalability, full traffic engineering, 50 ms resiliency, comprehensive OAM and mechanisms to measure and guarantee SLAs.
Solutions for Advanced Access Networks
William T. Sawyer, Corning Cable Systems
Dynamic new products are being produced today by multiple vendors that allow the feeder and drop portions of the outside plant to become "plug and play." This is not a dream of some individual company, but a reality moving across the telecommunications industry. These products have inspired architectures that allow deployments, changes and maintenance to take place quicker and with much more efficiency than was ever seen in traditional fiber builds. The hardened and ruggedized outside plant connector has become the enabling technology and has proven itself in the outside plant environment. Pre-connectorization drives down labor and deployment costs while increasing flexibility and organization. Quicker deployment means beating the competition to the customer. Quicker maintenance means retaining the customer when there are problems. A structured organized plant prevents stranded assets. Preconnectorization of the access network simplifies the outside plant and enables the cable operator to reach its financial goals through better engineering.
Service Awarenesss and Control Plane Management: Back Office Systems–The Challenge of Integration
Clayton Wagar, Alcatel-Lucent
Service quality is key to winning and retaining customers, especially commercial customers with mission critical service requirements. End customers are requiring complex SLAs with high expectations of availability and performance. Going forward, cable operators will need to build their IP/MPLS networks in a much more cohesive, intelligent fashion. Capturing significant market share will only be possible if the networks we build act as robust service delivery environments that enable, instead of impede, new service offerings. Two of the most significant challenges facing cable operators today are service failures and resource scaling. To address these challenges, cable operators require real-time control plane visualization, proactive control plane surveillance, configuration validation, and control plane diagnosis via simple tools with which to intuitively manage the interdependence of provisioned services and IP/MPLS layers.
Integrating Multiple Network Types Using TMN-Based Network Management
Srividya Iyer, Motorola
Because voice, data and wireless networks developed independently of each other, with different business and technology drivers, integrating management of them is no trivial task. They have different element management systems, management capabilities and data representations, making such integration difficult. TMN provides a common framework for seamless integration. TMN’s main advantage over other standards is its distributed architecture that provides for a gradual implementation of the TMN framework. Clearly defined interfaces to communicate with the legacy non-TMN systems make the framework attractive. TMN software toolkits available today make it easier for the equipment vendors and network management system vendors to update the legacy systems to be TMN compliant without costly software upgrades.