Despite an unfortunate industry habit of avoiding unpleasant possibilities, it is important to watch where the competition is going. This is especially true with VoIP where cable has an impressive broadband jumpstart but could be losing ground in the commercial space. "Each year they make a list of maybe five strategic priorities they’re going to get done, and business services each year has been maybe N. 5, No. 6," said Lindsay Schroth, senior analyst at The Yankee Group. "We’ve been writing about it for quite some time, saying ‘OK, they’re going to make the leap into this,’ and they haven’t made the leap that we would expect them to." Some MSOs might make that leap this year. (For insight where Cox Communications stands, see this week’s second "Signal to Noise" feature.) But Comcast won’t be one of them. Brian Roberts, Comcast’s president-CEO and chairman, and the guy with the final say, made that clear during the 16th Annual Citigroup Entertainment, Media and Telecommunications Conference in Phoenix last week. An area ‘we’re not going to emphasize’ "In 2006, that’s one of the areas we’re not going to emphasize. There are a lot of great things we can do; there are a lot of us inside the company that think that could be the next thing, small-medium sized business bringing a whole suite of products in an IP world to the small business community as we pass them," he said. But the 2006 priorities are set in stone: push bundled IP and phone services for residential users. "We’re very focused on the consumer market for 2006; getting our machine going so we can see our way to selling millions and millions of bundled phone subscriptions," Roberts said. Outside the laser focus A laser focus is great, but it often fails to shed light on outside developments such as those spotlighted by Taher Bouzayen, senior analyst for telecommunications strategies at The Yankee Group in an analysis titled: "Business VoIP Services Poised for Dramatic Growth." Bouzayen concludes there is a revolution going on in the commercial-or enterprise-space that will change how voice is delivered within a business environment. Hosted VoIP, a provider-supplied service, holds the most potential for monetary success by presenting the service provider the chance to be on the ground floor when a business switches out its old telephone system with merged IP services. Once there, it will be difficult to dislodge that service provider for quite some time since it will, in effect, control the enterprise telecommunications operations. "Yankee Group projects (hosted VoIP) to grow more to more than $1.2 billion in 2010 from $233 million in 2005" because it "appeals to enterprise because it allows migration from legacy systems to a managed IP solution without incurring capital expenditures," the report stated. Someone’s got to do it In other words, commercial customers must change their aging voice infrastructure and would like service providers to carry the burden by hosting bundled IP data and voice applications. "Service providers should ensure that they have an offering in this space," he wrote. In a follow-up phone interview, Bouzayen emphasized that IP is the catalyst, and "VoIP is an application and can be considered as a convergent solution. Everyone talks about IP convergence, which means you can send your voice, data and video traffic over that same pipe, a single pipe, as opposed to having a voice network, data network and video network. It allows you to consolidate all your traffic." Interestingly, that mirrors what Comcast plans to do this year, bundling voice and data services. Only Comcast’s end target is the residential user while Bouzayen said the traditional telephone carriers will target the deeper pocketed commercial space. Cable’s not in the business Bouzayen didn’t take cable into consideration when doing the report because he doesn’t see cable as a business-oriented service provider. On the other hand, he does see telephone carriers as residential service providers. "Verizon, SBC (now AT&T), everyone has some sort of DSL solution to deliver broadband access to the home. As long as you have broadband access, you can send in a VoIP solution over it," he said. As for cable, he added, "I don’t think they’re equipped … to go after business. From a network perspective, they really don’t have access to those businesses." He also sees cable as a featherweight in a heavyweight contest. "Competition is extremely tough. There are a lot of very large companies that made their business around VoIP solutions for the enterprise market. For a residential player such as cable companies to venture into the large enterprise market with a VoIP solution is something that’s not well positioned for them out there," he said. Leave it to the telcos Cable, he said, should probably leave the multi-billion dollar commercial space to the telcos and their hundred years of experience serving business customers. "They (cable) don’t have the right ammunition to do both (residential and commercial). They’ll just stick to their residential market. It’s a pretty safe market for them," he concluded. –Jim Barthold In your keynote address at the SCTE’s commercial services symposium in October, you advanced the goal of "$10 billion by 2010." How critical is telephony in helping the cable industry generate that kind of revenue? Very critical. We estimate businesses spend significantly more on voice services compared to data services, and this translates into a significant and healthy opportunity for voice services. Depending on the size of business, it’s anywhere from 3:1 to 5:1 voice to data spend. How has the migration into VoIP impacted Cox’s business services offerings? It brings about tremendous product portfolio capabilities for us in the commercial sector. It’s my belief that voice over IP resonates quite well in the business community, and in the next decade we will likely see all commercial voice traffic moving to IP. Given that these platforms are being put in place, we are looking to quickly build upon our legacy TDM portfolio and build out next-gen voice over IP service offerings for businesses. What does VoIP provide you strategically? I see VoIP as providing us with two strategic enablers. One is geographic expansion. It allows us to get into new markets at lower costs and with robust features and services. Secondly, it enables us to build out next-gen, voice over IP services to our customers. Those items would include things like IP trunking into IP PBXs, IP Centrex, IP PBX and IP key-set management. How do these PBX devices fit into the Cox portfolio? We provide reliable access into PBXs. We have a lot of fiber in the ground in the markets that we serve. So, typically, if a larger customer is going to have a PBX, we’re going to be serving them with fiber, with PRIs (primary rate interfaces) into their legacy PBXs. Bring us into the world of voice over IP: That customer migrates to either a hybrid PBX or a full-fledged IP PBX. Rather than having us deliver them a TDM-based PRI, they would likely prefer to have IP trunking, a PRI over IP, into that PBX. And thus in our newer world, we will be able to deliver those types of services. The bottom line is: I see IP PBX as very complementary with our metro fiber and coax infrastructure. What about IP PBXs, does this gear generally meet your specs? The biggest challenge right now is providing seamless trunking into IP PBXs because there are a multitude of IP PBX manufacturers. The challenge really gets to what protocols are needed to serve those IP PBXs. Are they going to be SIP-based? H.323? Where the vendor community really needs to come up to speed is the interoperability between the softswitch and gateway architectures with the IP PBXs. Is that interoperability something you’re working on now? It’s a must, if you want to deliver the service. What about the IDAD (integrated DOCSIS access device)? Is that an important part of the portfolio? It is. Expanding our coax infrastructure is critical and very complementary to our evolving VoIP service offerings. Because if you look at our network, about a fifth of that is fiber, and four-fifths is coax. The bottom line is coax is going to more businesses than fiber. The strategy there is to the extent that we can scale our coax to deliver T1-like and above type services, and much higher speed, bandwidth services, and dedicated services, that enables then us to use that coax for things like T1s, PRIs, etc. Whereas if we have coax going into a business today, if that customer needs very high bandwidth or a T1, we’re going to have to go build fiber right beside our coax. Does that tie with the use of technologies such as Xtend, which tries to mine the higher, unused bandwidth? Yes, very much so; Xtend will enable you to go beyond your current bandwidth capacity and deliver high bandwidth for markets that are bandwidth constrained. But it is also very complementary with some Arris technology that we are using. We’ve spent quite a bit of time looking at what we call accelerated HFC technologies, and we’ve supported several vendors in making announcements in that category, which is all geared toward scaling our coax to deliver higher bandwidth services with reliable voice quality, which very much helps us on the voice side. At an earlier SCTE VoIP Symposium, I heard Mark Barber (then of Charter) express concerns about managing the accelerated technologies. Are there any prerequisites to using those technologies? Yes, very much so. You need a really clean and pristine plant. There’s a whole list, in terms of network readiness, that needs to be completed before you begin launching customers on these platforms. There are ceilings no matter where you go. And so you really have to manage customers and their bandwidth consumption such that you know how to manage that node and the bandwidth delivered to that node. Back to the IDAD, how does that compare with the integrated access device (IAD)? An IAD traditionally would be deployed at a customer premises and serves as an integrated access device for delivering voice and data over one connection. Today, we deliver IADs more in the legacy TDM environment. And if that customer wanted, say, 14 lines of VoIP and the rest, say 10, to be used for data, we would go out and deploy an IAD to deliver a T1 off our fiber. Let’s say all those 14 lines are being used for voice, so that the other 10 are available for data. If the customer doesn’t have anyone on the phone, those 14 lines would be open. However, you don’t have any more data capability because it’s pretty much nailed up. Those 14 lines can only be used for voice, and the remaining piece of that T1 can only be used for data. Bring that into the world of VoIP and the world of DOCSIS-this is what the IDAD concept gets to. An IDAD simply combines the capability of an IAD with a cable modem so that we can delivery integrated T1s and PRIs over our coax infrastructure. It would enable us to take a piece of coax, reach that customer with one device, and have voice and data running over it, and let’s say this requirement still holds-this customer wants 14 lines of voice and rest data-they could have that capability over coax. And the benefit is that if you’re not off-hook, that full T-1 can be used for data. It’s basically a liquid bandwidth concept. It’s cost-effective, it’s efficient, it’s lower-cost for the customer. This product doesn’t yet exist, correct? It’s all in concept right now. We along with our other MSO partners through entities like CableLabs are pushing the vendor community to go here.