A glance at the technical to-do lists of midsized cable
operators looks familiar: upgrades; making two-way work so that interactive services can
start bringing in new sources of cash; and the launches -- simultaneous, in many cases --
of digital-video and high-speed-data services.
Times are brisk for the chief technical officers of the nation's midsized MSOs.
Four senior technical gurus discussed the outlook for 1999 with Leslie Ellis, senior
broadband editor of Multichannel News, and Roger Brown, editor ofsister
publicationCommunications Engineering
& Design.
They were:
Dan Liberatore, senior vice president of
engineering, Adelphia Communications Corp.
Tom Jokerst, senior vice president of advanced technology,
Charter Communications Inc.
Ken Wright, chief technology officer, InterMedia Partners;
and Pete Smith, senior vice president of engineering, Rifkin &
Associates Inc. An edited transcript follows:
MCN: What are your top three project priorities these
days?
Liberatore: My No. 1 priority is upgrades and rebuilds
-- getting everything up to 550- or 750-megahertz, two-way capability. Nos. 2 and 3, you
can cut the priority however you want. It's probably digital video and cable modems --
deployments.
Wright: I'm pretty much done with rebuilds. By
year-end, I'll be pretty much done with digital video, too. So for me, the priorities are
to survive budgeting season, one. Two, to get the rest of our digital-video launches
completed that we have slated between now and year-end.
In terms of next year, four priorities come to mind. First
are cable-modem launches, with the same aggressiveness that we've done with digital video.
Second, internal cross-pollinating: We have systems where we've been successfully doing
cable modems and operating return plant, and we need to spread the knowledge that we've
gained across other systems and throughout the ranks within the systems. That includes
spreading the knowledge on the return path.
Three is to evaluate interactive applications like
video-on-demand, Web surfing and e-mail, those kinds of things. Fourth is to refocus on
some of the key aspects of customer satisfaction, from a technical perspective. Things
like reliability, service-call percentage, repeat service calls, service- and
installation-response time -- the kinds of things that really drive our customers' like of
us and [desire to] keep us.
Jokerst: Rebuilds: Modems are ahead of digital video
for me, but only slightly. And WorldGate [Communications Inc., a TV-based Internet
service], which we're spending a lot of time on.
Smith: My priority list agrees with Dan's. I have 50 or
so upgrades to go next year. Some are in pretty small systems. We've launched digital
[video] now in three markets. We're going to launch digital [video] in another dozen next
year. We're pretty well along the way of having that model work for us, in terms of
training and how you go about doing it.
Seven systems are launched with cable modems. Another dozen
launch next year. We've just written a launch bible on how you go about doing all of that
stuff.
MCN: A launch bible?
Smith: That's what we call it. It's really just a book
divided into "technical," "marketing" and "operations," with
sections on what you should pay attention to when doing a cable-modem launch.
The last one for us is interconnects. We're going to have a
fairly aggressive plan next year to interconnect a lot of our smaller systems together and
make them into bigger systems.
In many ways, it enables you to do some things that you
can't do in small systems. All of us understand that there's a lower limit of where you
can do cable-modem services, or where you can do digital launches. If we can combine
systems together, we can exceed those thresholds, so we can launch new and different
services for those folks.
Liberatore: If I had a fourth priority, it's
interconnects for us, too.
MCN: What's the distance between the systems that you're
interconnecting, Pete?
Smith: The whole interconnect scheme revolves around
system size and how far apart systems are. Those are the two key variables.
If they're too far apart, then you have to move into
higher-level technology, such as digital, which costs more. Yet, if they're close enough
that you can still use some of the traditional, high-power, 1550 [nanometer] techniques,
you still end up with a very robust system. The current cost of those electronics allows
us to do some things that we couldn't do four or five years ago.
It's also the fact that we now have some businesses that
are proving themselves. They can generate good cash flow. Digital video is one of them. So
are cable modems.
MCN: Let's drill down on the rebuilds and upgrades. Ken,
you've described InterMedia in the past few years as being the "rebuilds-are-us"
company.
Wright: By year-end, about 75 percent of our homes
passed will be rebuilt. The vast majority of that will be two-way, as well. Our two-way
activations are following behind our upgrades, with about a one-month lag.
MCN: Is there a template that you're following in the
rebuilds?
Wright: On a residential-subscriber basis, most of it
is 750 MHz and two-way. We are doing some 550-MHz systems. There are some of each,
actually. Our larger metropolitan systems are all 750 MHz.
MCN: That must be a big relief, to be three-quarters
completed.
Wright: Every one done is a huge relief. It puts a huge
strain on the staff -- both the systems staff and the corporate staff.
MCN: What does a technical staff do once the rebuilds are
done?
Liberatore: It starts over [laughs].
Smith: It launches new services. Why rebuild unless
you're going to put something out there?
Wright: Exactly: You migrate from a rebuild mode to a
"let's make this two-way work" mode and install a whole mess of cable modems and
digital boxes.
MCN: How far along are you with the upgrades, Pete, on a
percentage basis?
Smith: Most of our larger systems are done or very
close. The urban ones are 750 MHz. When you get out to the smaller markets, most of those
are 550-MHz rebuilds or upgrades. I'm guessing that we have 50 percent or better rebuilt.
Now we're beginning to attack the smaller systems. We've been doing some acquisitions,
too, so that factors in.
MCN: When are you done?
Smith: Never: Look at the history of cable. I've been
at it way too long now, but ever since I started in this business, every time we rebuilt
or upgraded, we found products to fill that bandwidth. Systems that have moved to 750 MHz
will rest there for a number of years.
But realistically, now, we're going to begin to use the
bandwidth more efficiently -- more digital stuff. But my view has always been that it
seems like you never have enough bandwidth.
Liberatore: All of our core markets are pretty much
done, except for where we've made acquisitions around the fringes. We're in the 50
percent-completed range. Our goal is to be done in another two to three years, in the 550-
to 750-MHz range. We also have some go-back, where we didn't turn on the two-way. That's a
big project for us this fiscal year.
Jokerst: We'll continue doing rebuilds through 2000.
It's a big priority. Some are ending and some are starting, but we're well along the way.
MCN:
Just to put this in the proper perspective, can
each of you say how many total plant miles you have?
Jokerst: Our combined plant miles are between 60,000
and 70,000, I think.
Liberatore: We're sitting at around 42,000 miles, and
around 3.5 million homes passed. Maybe a little less -- maybe 3.1 million. We're at about
73 homes passed per mile.
Smith: We're probably at around 10,000 miles. I don't
have an exact number, especially with the acquisitions. We're in the 50- to
60-homes-passed-per-mile range.
Wright: We have 27,000 plant miles, according to my
database.
MCN:
Let's move into new services, and there are a
bunch of them. Maybe we could start with you ranking them: digital video, high-speed data,
telephony, VOD. What's your priority for '99?
Jokerst: You just named it.
MCN:
All of them, huh?
Jokerst: They're all priority one.
Wright: For us, the first priority was digital video.
That's why we'll be largely done with that by year-end. We'll have it up and running in
our top 15 headends, which serve 88 percent of our subscribers.
Our second priority is cable modems. We're not as far along
with them. But we have three markets that are commercial now, and another seven where
we've either installed or are installing the routers right now. In those seven launches,
we'll be launching with DOCSIS [Data Over Cable Service/Interoperability Specification]
modems. So we have the routers in and we have some test modems in, but we're not ready to
go commercial yet.
Behind that is the interactive services, whether it's
video-on-demand or Web surfing and e-mail to the TV.
As for telephony, we're still interested and we're still
watching, but that's a No. 4 priority for us.
MCN: How much of a gap is there between your No. 3 and No.
4 priorities, Ken -- between interactive services and telephony?
Wright: I'm not sure. We don't have anyplace where we
are installing the interactive services, really. We're doing the Wink [Communications
Inc.] thing in the analog world, in Kingsport [Tenn.].
As far as launching these interactive services on the
digital platform that we've put in place, we don't have any deployments today. We'll be
looking at some of that for the first quarter of '99. So, yes, telephony is behind that.
MCN: And of course, when people mention telephony these
days, we have to ask: circuit-switched or Internet-protocol?
Wright: The realities dictate that if you're going to
do anything very near term, it's going to be circuit-switched. Packet phone is a little
ways off.
Jokerst: I'd agree with that. You may see people
waiting it out, as well.
Liberatore: That's where we are, Tom. The cost models
are fairly compelling if you believe them. That says, 'Gee, maybe we should wait.'
Jokerst: I personally think that's what most people are
doing. And from what I can sense, there's a tremendous amount of momentum happening behind
IP telephony. But it still looks like it's a few years away.
Liberatore: My guess is that the folks that are getting
behind it believe the numbers. But there is a lot of work that needs to get done to make
this happen, as opposed to circuit-switched telephony.
Wright: You're right. The numbers are improving. But
for us, in the category of enhanced services, telephony is priority four out of four.
Jokerst: I agree with that. Our first priority has been
cable modems, followed by WorldGate and digital video, equally weighted.
With VOD, we're in the process of installing a server on a
demonstration basis, for ourselves, internally. We haven't settled out yet what we'll use
for content. I do see the immense opportunities with VOD as servers get better and less
expensive. As we get digital platforms deployed, that opportunity is right there.
Telephony comes in last.
Smith: Our priorities are similar. We're doing digital
video. We're doing cable modems. The technology for both exists, and it works, and we
figured out the plan.
We have a VOD test going with Diva [Systems Corp.] and a
proprietary box, but we're hoping that it will be integrated into existing boxes here
soon. The results so far are very encouraging. I can't discuss specifics because of
nondisclosures, but in terms of what people will buy, how much they'll pay and their
satisfaction, it's extremely high.
We don't have any big plans to jump right into residential
telephony. To my mind, telephony is a very segmented business. There are a lot of things
that you can do without jumping into the residential portion that can make you a few
bucks. You can do some reselling and, if you want to, there are CAP [competitive-access
provider] services.
Since we've put so much fiber out there and we're
interconnecting, we need to look at those kinds of opportunities to get the best
investment on those interconnects. Just hauling traffic for people can be a fairly good
business for you.
Liberatore: Last year, before the holiday season, we
did 25 digital headends. It was a wide and thin deployment. For the last year, we've tried
to increase the penetration. This year, we're installing some of the interactive boxes and
trying to get up this interactive curve. Whether it's simple Internet over TV, or some of
the things that others are doing, like Wink, I'm not sure. We're just starting as we get
this interactive box in place.
With VOD, we're doing a small Diva thing, like Pete, in the
Philadelphia area. From a modem standpoint, we did the same thing last year: about 17
sites with a one-way product and six sites with a two-way product. This year, it's been an
issue of getting those sites, and new sites, over to DOCSIS.
We're doing a small thing with telephony in Florida. It's
circuit-switched. We're trying to figure out the IP play on that. So those are the things
that we're working on. We have a lot of digital product out there, and a lot of high-speed
cable modems. Now, it's time to move up that ladder a little higher.
MCN: On the DOCSIS side, how much of a gating factor is
that standard, given the certification delays? Once the certification occurs, do
deployments really ramp up rapidly, or what?
Wright: Like I said earlier, we have three commercially
launched markets and seven more waiting. Those seven are not small systems. So, yes, we
have seven headends where we're waiting. The routers are in place.
We are not going to launch with proprietary product. We'll
launch with DOCSIS product. As soon as we have DOCSIS product, we go to market in front of
an awful lot of homes.
Liberatore: We're doing the same thing. We're not
deploying any more proprietary systems. What we're really trying to do here is to tiptoe
through this phase and gauge whether we need to wait for the final certification or get
out there now.
Right now, we're trying to understand the risks involved
with taking the latter approach. If I could launch 20 sites this month with DOCSIS, I'd do
that. I'm getting pressure to do that. I made up the number 20 -- it's hypothetical, but
the message is the same: We're really trying to gauge whether we should move now or wait
another few months.
Wright: It may help to distinguish something here. If
you can launch a modem that is DOCSIS-compliant, but not necessarily certified as
interoperable, then you do it. Especially if what it takes to go from DOCSIS-compliant to
interoperable can be achieved through a software download to that modem.
Liberatore: Sure. We've got to get this baby born, and
we've got to do it quickly. If we keep waiting for the latest revision and the last final
blessing, it could be a while.
Smith: There's a model out there that should teach us
all about waiting for a standard. It's called DSL [digital subscriber line]. They've been
waiting for a standard for years and years and years, and look where they are. There are a
few trials, but no major deployments. There's a lesson there, and the lesson is that it's
a little dangerous to wait for a standard.
In any business, he who has the customer is going to be
king. It's very difficult to take a customer away from anybody unless you've got a
substantially superior product. We simply want to secure that customer right now.
So, we didn't wait for DOCSIS. We're certainly interested
in becoming compliant, and we'll move in that direction. But I'm not going to wait at all,
for any standard, at this point.
Wright: It's important to make sure that we don't
confuse DOCSIS with DSL, though. DOCSIS, the standard, is there. The products are being
built to that standard. Widespread availability of a standards-based product seems to be
weeks away, if not days away. And the DOCSIS standard itself came about in an incredibly
short period of time, relative to DSL or ISDN [integrated services digital network].
So, Pete, I understand what you're saying, but they're not
the same thing. I agree that the first one to get the customer is in the best position,
but we're not going to do that with a proprietary product. I think that the industry has
learned its lesson there.
Smith: My point was that if the folks at DSL had
figured out how to do this four or five years ago, we'd be talking a much different ball
game today. We'd be talking about going after their customers.
Jokerst: My personal opinion on DSL is that I am not a
naysayer. I believe that it's going to work, albeit potentially at something less than the
full data rates that they're discussing.
MCN: And your thoughts on DOCSIS?
Jokerst: We're deploying non-DOCSIS modems --
proprietary modems. At this point, I'm very glad that we're doing that. We're deploying
what is essentially a DOCSIS 1.1-class product, with which we're able to deliver multiple
levels of service.
Out of about seven deployments, I have one that is DOCSIS.
I'll be running both DOCSIS-compliant and proprietary systems in parallel. I am concerned
about the retail portion.
Wright: I just came from a two-day forum on retail
modems, where Circuit City [Stores Inc.'s] CEO and RadioShack's senior VP of whatever made
presentations. I'll just tell you that they've got their eyes on this and they're very
interested in being involved in it.
Jokerst: The greater amount of pain is maintaining two
platforms from the headend.
Wright: I totally agree. That's why the next seven
launches are going to be DOCSIS-only. We're not going to put proprietary gear out there.
We're not going to support two platforms in those launches.
MCN: Technical lessons learned? Getting it down to one
installer?
Smith: Personnel, education and training. If you're
going to make a reverse plant work, everybody's got to be on board. We went through this
process where people said, 'We need to budget for a reverse technician.' I said, 'We will
never have a reverse technician.'
That implies that one or several people are responsible
just for that portion of the plant. It doesn't work. Everybody is responsible for that
portion of the plant. It absolutely comes down to training. When I look at where I had my
best successes, it's where the training took hold the best. The opposite is always true.
Liberatore: Pete is dead-on. All of these things happen
simultaneously: an upgrade, which brings up two-way. As soon as that's done, we say to the
staff, 'OK, we're giving you modems and digital set-tops.' We are really stressing the
folks out. I don't remember a time in my career where we've ever layered this many things
on at the same time.
Jokerst: Absolutely true. We're spending a lot of time
educating people on how to use digital -- digital and WorldGate.
Wright: Yes, training is key. You've really got to
watch how many things you pile on at once in a system. If you've got them doing a rebuild,
launching digital and launching modems, you can overload people and perhaps compromise how
well you do on all three of those projects.
Beyond that, other lessons learned: Yes, we can make the
return path work. Yes, the customers love the service, whether it's cable modems or
digital video. Once you give it to them, you've got to shoot them to take it back.
MCN: What is your current thinking on the debate over clean
plant versus the use of filters for the upstream signal path?
Jokerst: Philosophically, I'm opposed to the mass
deployment of filters. Bear in mind, I'm wearing my "ideal-world" hat [laughs].
I believe in using filters for specific problems, like with a specific drop or even a
specific MDU [multiple-dwelling-unit] complex.
We have some major urban areas with 600 homes per mile, 400
of which are MDUs. That's a ton of wiring to get cleaned up and secure from an RFI
[radio-frequency-interference] standpoint. Filters there, on an interim basis, are very
useful tools.
MCN: What is the problem with deploying filters or traps?
Why such a religious debate on the subject?
Jokerst: The biggest problem with using filters,
assuming that they're installed at the tap port, comes in the world of OpenCable and the
DOCSIS-compliant modem.
Picture it: People go out and buy the devices, take them
home and self-install them, but we'll still have to roll a truck to that customer if, at
some point prior to that, we've installed a filter on the tap. That's just a fundamental
problem that I can't get past. I'm trying to not create a bunch of future truck rolls by
installing high-band filters on the tap ports.
MCN:
You're saying that filters are installed on
homes that do not take two-way services, like data and telephony. So when those customers,
who are currently not doing anything interactive, go out and buy a cable modem or a retail
set-top, they'll be unable to install it in areas where filters are installed?
Jokerst: Exactly: That's the danger. I had some
operational folks who took me to task on this issue of no filters, so I said, 'Fine, I'll
put on a pair of jeans and meet you in the field.' And I did.
At the end of that exercise, after we disconnected the
illegal customers who were on the system [all laugh], we found out that we didn't need to
use any trap filters at all, and we had acceptable levels of noise and ingress.
Wright: When it comes to filters and traps, our motto
is, 'Just say no.' We're not doing it. We're making the return plant work without traps.
There are a lot of reasons to do that.
Tom mentioned it: You shoot yourself in the foot trying to
go to retail with modems if you've got traps hanging out there. If you put traps out
there, you're just hiding the problems and becoming your own worst enemy.
MCN: Why?
Wright: Because as penetration rates for new, two-way
services grow, so do the problems as you start to remove the traps. From day one, we took
the approach that we're not trapping. We're making it work.
MCN: Pete, filter or not?
Smith: Filter. I'm the opposite viewpoint here. That's
because when we upgrade systems, we do not necessarily replace drops along the way. We
replace obviously defective drops, but I want to make sure that the expense goes along
with the revenue.
The expense of maintaining a drop for reverse path goes
right along with the revenue. When a customer comes online with a revenue-producing
reverse-path application, we'll maintain the drop.
MCN:
What about the DOCSIS argument for modems at
retail?
Smith: I understand it. At the same time, it will be a
while before it becomes a big issue for us.
The only place where it's hurt us so far is in-home
demonstrations. You can't have a person walk in with a laptop and show them the high-speed
Internet service, because there's a filter on the drop. But we figured out ways to get
past that with public demonstrations.
With respect to MDUs, the market that we turned on that
turned out to be the cleanest was Miami Beach [Fla.], which is a 600-homes-per-mile
market, with 80 percent of it as MDUs. It turned out that the shielding offered by the
buildings was fairly high.
MCN: Is your long-term plan to remove the filters?
Smith: Slowly, but surely. I've already got 60 percent
to 70 percent of the market without filters, and I'm hoping to get to a point where we'll
just take them out. It's really more of a situation where we wanted to get two-way
services up as quickly as possible and as cleanly as possible. The reverse path is working
real well right now.
Liberatore: We've taken a strong position on filters,
too. I agree with Ken. We do not use filters or traps unless there are specific places
where people have to go and troubleshoot. What happens is, we say no, and whenever the
field guys need filters, they go chase down one of Pete's trucks and borrow some [all
laugh].
