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Matt Stump
All services to all devices. That is the mantra coming from Cisco Systems cable executives as they help broadband operators prepare for business in the 21st century. "We have to capture the power and momentum where we've got this ubiquitous wave of network appliances moving into your life and enable those to be revenue producing portals," says Paul Bosco, Cisco's VP/GM of cable products and solutions. "No one is better positioned, short-term, to participate and drive this revolution than cable operators."
Cisco, whose recent stock price run up helped it surpass General Electric Co. as the second largest company by market cap in the world behind Microsoft Corp., has been selling cable modem products plus routers and switching equipment to operators for years.
As cable operators deploy broadband networks and traffic increases, Cisco sees an opportunity to kick broadband sales up a notch by connecting all the devices in the home. Of keen interest to Cisco is the Cablevision Systems Corp. deployment of Sony Corp. set-tops.
"The biggest North American operator we're watching is Cablevision," Bosco says. Cablevision also is deploying Cisco gear, but that's not the reason for Bosco's interest.
He's more intrigued with the Cablevision-branded, Sony-set-top enabled experience the MSO plans to present to consumers. That runs the gamut from content and services, shopping and PPV to connectivity to other network devices.
Cablevision as a gateway The system will be open, Bosco points, using NDS smart card technology. Cablevision can become the gateway in the home, connecting various appliances together, he says.
Longer-term, Bosco's captivated by the possibilities of Sony's PlayStation 2 which debuts this month and could be a de facto set-top in the years ahead. "It's an amazing box to me," he says. "It may be standalone right now but think about a box that's got DVD or CD ROM play capability. This box features a 50 gigabyte hard drive coming. It can decode MPEG2 with AC-3. It has 5:1 surroundsound, optical audio output, 1394, USB and because of the distortion in game pricing could hit retail somewhere between $99 and $199. And then they start to talk to the conditional access guys and port Nagra and NDS into it. This is a funky future. This is the game guys. Where are they coming from?"
"The set-top will have no hard drive, no DVD, no CD ROM," he continued, "and this other thing will have everything under the sun."
The wave of network appliances that will hit the market soon poses a particular challenge for North American cable operators who are accustomed to proprietary schemes. "The market is particularly handicapped by the proprietary conditional access schemes," Bosco says. "Between closed conditional access and channel-based addressing, everybody wants to move more data across an MPEG2 data stream. There's some fear we'll wind up building the completely wrong architecture to transform all these devices in the home into revenue producing portals. That's the big fear." It's also what's driving CableLabs R&D efforts to make sure that doesn't happen, he added.
Keeping an open mind Bosco, who worked at Continental Cablevision prior to his arrival at Cisco, also says cable operators should embrace these new devices coming into the home, as Comcast Corp. and Cablevision have. "Some customers look at what's emerging in the home and sometimes view it as a bypass or end run, instead of being a portal that will produce revenue."
Cisco IP products flow right into this model. Today, Bosco says operators are looking at three "siloed networks," with separate parts for video, voice and data. "Everyone is asking: 'Why am I building three networks?'" Bosco says. "In this New World, everything is digital and packet based," Bosco says, meaning one, IP-based network for everything. Most major players are testing IP today, Bosco says, and implementation will come over the next 12 to 24 months.
Bosco's paid to play favorites in the cable vs. DSL horserace. "The honest truth is that the technologies over time will reach parity," he surmises. "We're looking at a battle based around marketing bundles and execution. Retention becomes critical as we go broadband and put more expensive capital further into the home. If you churn when you've got multiple devices in the home you go redline very quickly."
Technology advances also will help cable operators play a role in home networking, if they want. "Intel is developing chip sets that enable aggregate high bandwidth in the home with the ability to go very low bit rate, very low power for the handheld phone-type device, but high quality of service and high bit rate to a secondary set-top. That's a step beyond the current aggregate 10 megabit environment."
Cisco stands ready to interconnect current and future devices in the home. "This could be an enormous win for this industry."
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