Cox Communications is currently scouting the seas of VoIP — cautiously. Here’s a chance to take a peek at what it’s learned so far, and integrate those lessons into your own IP telephony plans.

Editor’s note: In "Prudently Bullish: Cox Outlines VoIP Strategy" (page 42, May 2003 Communications Technology), Cox’s CTO Chris Bowick explained why the MSO won’t abandon its existing circuit-switched technology in favor of voice over Internet protocol (VoIP) telephony. "We believe the two technologies will be complementary," Bowick says. "When VoIP technology is viable for wide residential deployment, we really see it as one in which we control our destiny."

In this article, he details Cox’s careful, yet vigilant, approach to VoIP technology, and offers what is perhaps a fundamental harbinger as to how many operators will work VoIP into their future engineering plans.

Despite common misconceptions, VoIP isn’t a service. It’s a technology protocol that enables phone calls to be transported over an IP-based data network and permits the layering of multiple services, including commercial telephony, primary-line residential service and secondary-line residential service, on the network. With VoIP technology, voice "packets" are transported along with data packets over private, managed networks.

Notwithstanding outstanding issues discussed in the May issue, Cox is prudently bullish on the potential of VoIP. We’re not ready to answer definitively whether VoIP is a sound option for wide residential deployment, but we’re actively exploring this technology. The advantages we foresee are detailed in the sidebar on page 42.

Maximize network capabilities

The ability to integrate Cox’s data and telephony platforms is enabled in large part by cable industry standards embedded in the new generation of cable modems and related equipment. DOCSIS 1.1 standards, for instance, establish quality-of-service (QoS) levels for cable modems and delivery of high-speed Internet service. CableLabs has developed PacketCable specifications that standardize protocol and equipment and define the end-to-end quality-of-service from the headend or metropolitan transport center (MTC) to the rest of the transport chain and interface to the public switched network. PacketCable, along with DOCSIS, will ensure that telephony and data platforms are compatible.

An attractive potential of VoIP is the opportunity to integrate our data and telephony platforms, and gain potential cost savings. For example, the cable modem termination system (CMTS), which is in essence, the traffic cop directing data traffic on our IP network, also has the capability to deliver voice packets. The newest versions of CMTSs are voice-compliant, and Cox started buying these upgraded versions in 2001.

Hybrid overlay trials

Cox has identified several possible technical approaches to deploying VoIP, and has begun lab- and field-testing them. Early last year, we conducted a trial in Oklahoma City, Okla., to test a VoIP alternate-line architecture overlaid on an existing circuit-switched architecture.

In this hybrid design, which links circuit-switched time division multiplexing (TDM) technology and IP technology, we installed a GR303 gateway to bridge the two architectures. We wanted to trial the idea of an alternate-line service, evaluate the integration of the architecture with our ICOMS customer management system, and learn how to provision service on a multimedia terminal adaptor (MTA). Additionally, we wanted to test the features of several types of MTAs and evaluate the performance of the CMTS, routers and other last-mile equipment.

But, above all, we wanted to identify and quantify the economies of scale from using the existing Cox network investment. Simply put, we wanted to determine how different VoIP services are from existing telephony operations—down to specifics like identifying and issuing IP addresses and phone numbers.

PacketCable on trial

We successfully concluded that six-month trial, and will compare its findings with a trial of a different architecture that we’re now conducting in a lab environment. We are moving into one of our noncircuit-switched markets this year.

In addition to all of the objectives evaluated in the Oklahoma City trial, we’ll test the delivery of Class 5 calling features via VoIP technology. Because the previous trial tested an overlay to the TDM switched architecture, all calling features including caller ID, call waiting and call forwarding were handled by an existing switch.

In the second trial, we’re evaluating how to best develop and provide these services in a noncircuit-switched environment.

"Compared to the TDM switch, which is essentially one big ‘box’ with all of the necessary components, the PacketCable architecture has numerous separate components—12 to 15 different pieces of equipment. Therefore, a primary objective of this trial will be to properly integrate all of these pieces," says Dianna Mogelgaard, director of product development. "We see a large potential benefit there, because the multiple pieces of equipment lend themselves to additional flexibility and allow us to select the ‘best of breed’ for each component."

After we’ve evaluated the PacketCable and hybrid overlay trials results, we’ll determine our next steps, leading to a possible marketing trial and commercial launch of voice services via VoIP technology.

Long distance transport

The third level on which Cox is exploring VoIP is long-distance transport over its IP backbone. We’re in a unique position to leverage our existing data network, and use it to transport our own long distance service. We’re actively investigating the feasibility of this kind of a step.

The perceived primary benefits of carrying long distance traffic on our own backbone would include:

Reduced exposure to an unstable long-distance carrier market beset by recent bankruptcies and business failures.

Increased cost savings by leveraging the capital investment in our new IP network.

Reduced transport cost for long-distance minutes of use.

Increased utilization of the full capabilities of our IP backbone.

Nearly 20 percent of the outbound calls made by current Cox phone customers are to customers in other Cox circuit-switched markets, highlighting a tremendous opportunity. The first of several phases of implementation would focus on calls between any two of Cox’s circuit-switched markets.

Intra-corporate traffic

Subsequent phases could include intra-corporate long-distance calls between our circuit-switched markets, and all other business locations of our primary shareholder, Cox Enterprises, which has businesses including newspapers, TV stations, radio stations and automobile auctions in numerous markets nationwide. Intracorporate long distance transport would start with those businesses located in the nine circuit-switched markets, expanding later to all operations of Cox Communications and Cox Enterprises.

Another phase would focus on delivery of calls from Cox circuit-switched markets to major metropolitan hubs that our backbone reaches—non-Cox markets like Chicago, Dallas, Los Angeles and New York. In these cases, Cox envisions having to pay only the local interconnect charges, because the primary transport will be via our backbone, yielding considerable savings.

The triple play conclusion

The potential savings, efficiencies and dynamic operational opportunities of VoIP technology are certainly attractive to Cox. The MSO has long followed a clear strategy based on maximizing the power of our network—a philosophy that has made it a successful triple-play broadband cable company, delivering the full complement of video, Internet and voice services.

Telephony is a critical component of the triple play, and Cox remains completely committed. VoIP could be a worthwhile addition to that strategy.

Chris Bowick is the chief technology officer for Cox Communications. He may be reached at chris.bowick@cox.com.

Cashing in on VoIPs Benefits

If current assumptions of VoIP technology are realized, Cox foresees the following benefits:

It will allow us to leverage our existing nationwide IP backbone, telephony infrastructure and backoffice functionality to realize cost efficiencies in the expansion of our phone service.

VoIP technology will permit expansion of Cox’s phone services, allowing the launch of telephony in markets where the economics don’t justify the cost of a circuit switch. Further, it will provide the flexibility to determine market-by-market whether to expand service in existing phone markets with a circuit-switched-only approach, or with a complementary VoIP overlay.

We’ll be able to regionalize many of the functions and much of the equipment to deliver phone service, spreading the costs across multiple markets, for cost savings and efficiencies.

We will leverage our telecom expertise, people power and internal processes amassed over more than five years as a successful provider of residential and commercial phone services.

VoIP technology will enable Cox to introduce phone services to customers we’re not currently reaching—without stranding the capital invested in circuit-switched operations. We won’t abandon our circuit-switched business. There would be no reason for existing customers to move from circuit-switched to VoIP technology, unless they wanted the expanded features likely enabled by VoIP. Otherwise, the technology would be transparent to customers. Cox fully intends to be able to completely utilize the capacity of existing switches.

With VoIP, we anticipate that payback on capital investment would be accelerated. This is not only because upfront costs may be less and the equipment could be leveraged over a larger geographic area, but also because of the potential for new service features for which customers likely will be willing to pay more.

VoIP offers Cox the potential to deliver long-distance service over our own IP backbone network. Currently, we’re a reseller of long-distance transport purchased from wholesalers, but our national backbone gives us the option of transporting long-distance voice traffic. Cox could potentially transport all of the long-distance traffic to our own business locations, as well as our customers’ long-distance calls, thus minimizing reliance on third-party wholesale long distance providers.

We could offer unique calling features to customers of a VoIP service, which would further integrate our video, voice and Internet offerings, increase revenue per customer and enhance Cox’s competitive position vs. other telephone competitors, who would likely be technologically constrained from matching the features.

Further enhancing the synergies among all of our product suites is consistent with Cox’s bundling strategy. VoIP likely will help us reach our goal of making a three-product bundle of services available to all homes passed.

The Future of Reliable, Robust VoIP

BOTTOMLINE

Cox anticipates that VoIP services could help expand telephony operations into new markets and to more customers, while integrating seamlessly with its existing circuit-switched technology. When VoIP technology is available to ensure reliable, robust residential offerings on a wide scale, Cox will be in an ideal position to offer them. That is, assuming it makes prudent business sense from a technical, financial and operational perspective—for the maximum benefit to the company, customers and shareholders.

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