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Telecommunications carriers bring a lot of strength to the table in terms of their strong network design, deployment, and management skills. The telecom networks are known for their reasonable cost and high degree of reliability. Additionally, the carriers have strong customer service reputations and are used to transaction-based billing. Perhaps their biggest weaknesses are lack of flexibility, lack of market responsiveness, historically weak marketing skills, and complete inexperience in the dimension of content. Content is key in the Internet world and certainly will be so in the world of convergence. As some have noted, the telephone companies have developed and re-developed numerous convergence strategies which quickly have back-fired—sort of like the Wile E. Coyotes of a convergence cartoon [15-3].

Data Communications Networks

Data communications traditionally involves either modems for transmission over analog circuits, dedicated leased lines (e.g., DDS and T-carrier), or switched digital services (Switched 56/64 Kbps). Additionally, ISDN is a thoroughly acceptable network technology for data communications, although transmission speed is limited. The deployment of Next Generation Data Networks is moving rapidly, with Frame Relay leading the pack. SMDS also enjoys a modest level of success. ATM, of course, is viewed as the ultimate datacom solution into the foreseeable future. While the data network providers also bring a lot of strengths to the convergence battle, like the telephone companies, they generally lack experience with content.

CATV Networks

Entertainment networks, for the purposes of this discussion, are those of CATV providers. With rare exception, these networks are isolated islands of entertainment based on analog coaxial cable facilities. Bandwidth is substantial, but is Frequency Division Multiplexed into fixed video channels of approximately 6 MHz. Further, CATV networks are one-way, with rare exception. Finally, CATV networks are dedicated, multipoint broadcast networks, rather than being switched and interconnected (Figure 15.1). Therefore, existing CATV networks are not suitable for I-Way use, even though they pass 98% of the 95 Million households in the U.S. Current (1996) penetration of landline cable is in the range of 62 million (65%) and is growing at an annual rate of about 3%; about 1 million receive CATV via microwave and 5 million via satellite [15-20].


Figure 15.1  Typical analog coax CATV network.

A number of CATV providers recently have made major commitments to upgrade existing facilities to fiber optic/coax hybrids to provide substantial bandwidth and to support bidirectional communications. According to TCI management, only about 10% of the 20 million or so households passed by its CATV systems have been upgraded to 750 MHz, two-way capability. Nationwide, only about 8% of households have access to two-way CATV systems [15-21]. In terms of the major CATV providers, about 17% of homes were passed with upgraded fiber/coax systems in 1995. Estimates are that the percentage will grow to 51% in 1997 and 83% by 2001 [15-20]. While still analog in nature, the networks are being deployed with an eye toward future upgrade to digital technology. If CATV providers are to be successful in a convergence scenario, they also must provide switched interconnectivity with voice and data networks, as well as with the Internet. Developing the necessary infrastructure will be difficult for many of the CATV providers because they typically are undercapitalized, private companies with relatively small cash reserves and lacking access to capital (debt and equity) markets. Further the CATV companies do not have transaction-based billing systems in place, and generally lack a high level of network management capability, as well as customer service and support systems and staff [15-22]. Not only must they expand their technological capabilities and skill sets, but they must enhance their public perception. A 1994 study by George Washington University indicated that only 13% of small businesses would prefer to deal with the local CATV provider, rather than the LEC or an IXC [15-23].

It is worth noting that CATV providers are under increasing pressure on their home fronts from Direct Broadcast Satellite (DBS). Using digital satellites with MPEG 2 compression, the signal is received through a fixed VSAT dish that focuses on the satellite associated with the service provider. As of mid-1996, there existed about 2 million DBS subscribers. That number is expected to reach 17 million by the end of 1998 [15-22]. Given the erosion of their core business, CATV providers are aggressively seeking ways to augment their revenues and will likely be a force in the convergence market. Some suggest that their strength will be in small and rural markets, in which the major LECs and IXCs have little interest [15-23].

The great advantage of CATV providers lies in the bandwidth of the existing networks and, certainly, the proposed upgraded networks. Through the use of cable modems providing access to upgraded, two-way, hybrid fiber/coax networks, as many as 1,000 homes can be provided access to a local node which, in turn, connects to a central switch. Each cable modem can provide as much as 10 Mbps total bandwidth to each premise, depending on total network load. As noted in Table 15.2, a file of 16 MB can be downloaded in about 16 seconds, versus over 1 hour with a contemporary high-speed modem. Unlike a LAN environment, the shared CATV network yields throughput very close to the theoretical 10 Mbps per modem, as the network employs a centralized, non-contentious media access control technique much like token passing.

Table 15.2 Time required to download a 16 MB file using modems, ISDN BRI, and 10 Mbps cable modem

Transmission Method Time Required

14.4 Kbps Modem, Analog Line 2 hours, 28 minutes
28.8 Kbps Modem, Analog Line 1 hour, 14 minutes
ISDN BRI at 128 Kbps 16 minutes, 39 seconds
Cable Modem at 10 Mbps 16 seconds


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