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Vonage - Western Show Ends With A Whimper

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Much Smaller Booths, Less Floor Space, Fewer Attendees Mark Final Anaheim Confab

January 1, 2004

By Alan Breznick

Despite the big hopes of convention organizers to stage one last memorable affair, the cable industry's 36th and final Western Show went out with a whimper rather than a bang last month.

The California Cable & Telecommunications Association (CCTA), which sponsored the convention in Anaheim as always, said it drew a mere 6,150 attendees for the four-day confab. That's way down from about 10,000 in 2002, 17,000 in 2001 and a record 33,000 in 2000, when the show was last staged in downtown Los Angeles. Indeed, attendance at what had long been the industry's second biggest annual convention was not much higher than that enjoyed by several of the largest regional cable shows.

Similarly, the total number of Western Show exhibitors plummeted to 150 from 240 last year, a 38% dropoff. Even with the addition of 44 new exhibitors on the floor, the falloff was substantial as such major tech vendors as Cisco Systems and Broadcom and many smaller ones either stayed home or hosted hotel hospitality suites and private meetings.

Moreover, the total exhibit space declined dramatically again this year, dropping to 30,000 square feet from 80,000 square feet last year, as those vendors that did attend cut back drastically on their booth sizes. Only a few tech stalwarts such as Motorola and Scientific-Atlanta maintained reasonably large exhibits. And the cable programming networks were scarce on the convention floor, with the notable exception of Starz Encore.

In a sign of how much the total exhibit area shrunk this time around, CableNet, the tech expo organized by CableLabs that is usually just a blip on the convention floor, took up a full one-third of the total exhibit space. CableNet's exhibits also appeared to generate more buzz and activity than anything else on the floor, except for possibly the Motorola and S-A booths. Thanks to CableNet's enduring popularity, NCTA and CableLabs will move CableNet to the National Show, starting with the next convention in New Orleans in early May.

Show organizers boasted that the 31 educational sessions drew plenty of conventioneers, in some cases playing to standing-room-only crowds. In particular, the first morning general session attracted an overflow crowd in the convention center auditorium, prompting organizers to peel back the sliding back wall and place 200 more seats in the 750-seat meeting space. But, in years past, general session crowds filled the entire auditorium without the need for sliding walls to slice the room in half.

In other signs of the Western Show's steep, sad decline, there were few, if any, blowout parties or otherwise standout evening events. Show organizers didn't even bother with a flashy montage of highlights from great shows of the past. Mostly, cable executives just paid tribute, perhaps somewhat guiltily, to long-time CCTA President & General Counsel Spencer Kaitz, who announced his retirement at the show.

Despite the show's disappointing sendoff, tech vendors and cable operators did make some news in Anaheim and there was still plenty to see. Our Western Show news roundup follows.
Sachs Says National Show Will Head West of Chicago Again
NCTA President and CEO Robert Sachs announced the shift of CableNet to the National Show in his annual address. He also announced that, with the disappearance of the Western Show, NCTA will bring the National Show and CableNet west twice in upcoming years. Plans call for staging the 2005 National Show in San Francisco and the 2007 convention in Las Vegas.

Naturally, Sachs also seized the opportunity to boast about the industry's achievements in rolling out new digital services. He said U.S. MSOs now have 21 million digital cable subscribers, a penetration rate of nearly 30%. He said American cable operators have more than 15 million cable modem customers and should clear 16 million by the beginning of 2004. And, with major MSOs now starting to introduce Voice-over-Internet-Protocol (VoIP) service in their initial markets, Sachs said the industry has signed up more than 2.5 million cable telephony subscribers.

"Talk about an industry being on fast forward," Sachs gushed. "Cable's had the best ride anyone's ever had at Disneyland. And with HDTV, video-on-demand, PVRs and Voice Over IP being rolled out, our future prospects are equally bright."

New Digital Video Services Crowd Much of Show Agenda

As Sachs' remarks indicated, the digital video trio of high-definition TV (HDTV), video-on-demand (VOD) and personal video recorders (PVRs) dominated much of the discussion in Anaheim. In particular, there was a lot of talk about the carriage of HDTV programming, which cable operators now see as a potentially strong competitive edge for them over satellite TV providers.

As the convention opened, NCTA released the latest HDTV survey of its members, bragging that cable operators now offer high-definition programming in 96 of the top 100 U.S. markets, including the 30 biggest. Overall, NCTA said, cable now makes HDTV available in 143 of the 210 markets nationwide, passing about 70 million TV households. That's up nearly 90% since the start of 2003, when HDTV was available to just 37 million homes passed by cable.

In a pre-show luncheon on HDTV sponsored by CTAM, Comcast Cable and Cox Communications executives outlined their respective drives to promote HDTV and other new digital video products on the retail level. For example, Comcast now has an HD sales presence in 250 stores around the U.S. Company plans call for increasing that nationwide total to more than 2,000 stores by the end of next year as U.S. HDTV set sales continue to grow from an estimated 4.3 million in 2003 to a projected 5 million in 2004 and 7.2 million in 2005.

"We think it's a big opportunity, [but] only if we execute really, really well," said Andy Addis, senior vice president of marketing and new products for Comcast. Calling the HD opportunity "a double-edged sword," Addis said consumers are expected to purchase an estimated 2 million high-definition sets in the MSO's territories next year. While 60% of those consumers are Comcast customers now, Comcast officials aim to boost that portion to 80%, a difference of 400,000 set buyers. "Each one of those is a risk and a liability," Addis said, noting that DirecTV and EchoStar could pick off those consumers if Comcast doesn't execute well.

Likewise, Cox has been very aggressive on the retail level in select markets. In Phoenix and Tucson, AZ, the MSO has launched a "strikers" program in Best Buy outlets to plug its products and services. Under this program, part-time Cox employees -- mainly college students -- hit Best Buy stores Thurs. night through Sun. to promote Cox's HDTV and other offerings. "We realized that there has to be somebody on that retail battlefield," said Steve Rizley, vice president and general manager of Cox Communications Arizona. "It's a promising way to go."

Several other companies released HDTV news at the show. On the tech vendor side, S-A made the biggest splash with its new digital cable set-top box, the Explorer 8000HD, which comes equipped with both HDTV and PVR capabilities. S-A, which demonstrated the set-top at its booth, said it's signed up Time Warner Cable's Green Bay, Wis. system for the box's first major deployment.

BigBand Networks also announced a big score with Time Warner. BigBand, which provides platforms for broadband multimedia services, said Time Warner is deploying new digital services in Houston based on the BigBand BMR (Broadband Multimedia-Service Router). BigBand said the deployment, covering more than 1.5 million homes passed and more than 25 hub sites, "leverages the superior economics, efficiency and functionality of Gigabit Ethernet to maximize offerings to subscribers, at enhanced reliability."

Voip Moves to Center Stage for Cable

New video services weren't the only rage in Anaheim, though. There was also much discussion about new voice services as cable operators and tech vendors heralded the launch of the IP telephony era.

As several leading MSO executives made clear at various show sessions, Voip will be the next big cable IP service. Senior officials from Time Warner, Cox, Charter Communications, Adelphia Communications, Cablevision Systems, Rogers Cable, Advance/Newhouse Communications, Mediacom Communications and Insight Communications all said they're preparing for major Voip rollouts in 2004 (see related stories in this issue).

"I think we see Voice-Over-IP as a great application," said Carl Vogel, president and CEO of Charter. Although he's not sure there's any single killer app these days, he said, "Voice-Over-IP could be the one thing."

In one panel discussion, Thomas Eagan, senior analyst for cable and satellite TV research at Oppenheimer & Co., predicted that "the bulk of cable operators" will launch Voip service in 2004 because they can't keep achieving double-digit income growth without it. He estimated that broadband Voip players would close 2003 with about 100,000 subscribers, thanks largely to the initial success of Vonage Holdings Corp., an independent startup that's been building a customer base on its own while aggressively courting smaller MSOs for co-branding and distribution deals.

Vonage Makes Its Presence Felt Among MSOs

Eagan wasn't the only speaker to mouth the once-dreaded V-word in Anaheim. Cable operators couldn't escape Vonage at the show as company executives appeared on panels and the firm announced several broadband distribution deals and new services. In its biggest move, Vonage -- which had earlier signed cable deals with Armstrong Cable, Advanced Cable Communications and the Coldwater (Michigan) Board of Public Utilities and closed a $35 million investment round -- signed up CableAmerica as its latest private-label partner.

CableAmerica, an MSO that serves more than 75,000 basic cable subscribers in Arizona, California, Michigan and Missouri, will offer Vonage's standard unlimited local and long-distance service to broadband customers for $34.99 a month.

During its busy week in Anaheim, Vonage also unveiled a new low-cost dialing plan that offers 500 minutes of local, toll and long-distance service for $14.99 per month. In addition, the company introduced a Spanish version of its Web site and a new Hispanic customer care center to answer questions by voice and email in Spanish. Finally, Vonage notched a deal with Microwave Satellite Technologies Inc., an alternative video and data provider that uses microwave signals and fiber optic lines, to offer service to its small but growing group of NuVision cable subscribers in the New York area.

Vonage officials, who now boast more than 80,000 broadband Voip customers, vowed to keep up the assault. "We've literally broken the mold," said Phil Giordano, vice president of MSO sales for Vonage. "We're a work in progress."

Cable OSS Moves Forward Steadily

As was true at the previous Western Show and the National Show in June, emerging startups and established players in the budding cable operations support system (OSS) field worked the convention hall in Anaheim. Such established OSS and billing firms as Alopa Networks, Auspice Corp., Ceon Corp. Convergys Corp., Core Networks, CSG, Lemur Networks, Mentis Broadband Solutions, SupportSoft and others all scrambled for MSO attention. Many also had deals or other news to announce.

Alopa said it signed up three new broadband providers for its Alopa MetaServ provisioning and IP management solution. Two of the three new customers -- Altrio Communications and Cable Bahamas -- have already deployed the OSS software on their cable systems. The third, Newnan Utilities of Newnan, Ga., is still working on installation.

Auspice and Cox said the MSO is making use of an integrated cross-service cable operations automation solution based on Version 4.0 of Auspice's TLX Real-Time Systems Integration and Operations Automation Platform. The TLX-based solution automates the steps that detect and correlate HFC plant outages across multiple service lines and then help identify the cause and total scope of outages. In addition, the system automatically creates a performance score for each HFC network region, prioritizes them to identify the biggest problems and generates maintenance tickets. Auspice introduced TLX 4.0 at the show.

Core Networks unveiled its new Ôlast mile' HFC network management system, CoreMeter. The company said CoreMeter uses data collected regularly from the Management Information Base of DOCSIS cable modems and cable modem termination systems (CMTSs) to supply cable operators with real-time and historical analysis for "end-of-line" visibility, including characterization of the HFC network and its capacity to deliver advanced services on the RF spectrum. The system is designed to enable MSOs to isolate, predict and respond to network noise, attenuation and capacity impairments that cause service interruptions.

Separately, Core Networks introduced Core Ensemble, a home network management platform for cable broadband systems. Core Networks said the software is designed to provide monitoring and management over CableHome-based residential gateways, thereby allowing cable operators to expand the number of IP services they can offer to data subscribers.

Billing player Convergys announced the availability of ICOMS Release 5.1, which includes such new features as the ability to generate billing statements in languages other than English. The updated software also has an API that cable operators can use to create, reschedule and cancel trouble call and special request work orders and automate work order activity updates across multiple systems. In addition, the new release provides for multiple campaign and package codes on a single work order for an individual subscriber.

Billing system vendor CSG plans to team with Interactive Enterprises to offer full provisioning and service activation capabilities to cable operators venturing into bundled services. The companies said they will mesh CSG's Kenan Fx framework and ICMS Solutions with Interactive's just-released Open Conexon solution.

Incognito Software announced the deployment of IP

Commander, its broadband device provisioning solution, with StarHub, a large broadband provider in Singapore. StarHub said it plans to use the software to expand its customer base of 140,000 broadband subscribers and offer more advanced IP services. Incognito also debuted its new Broadband Command Center, an integrated high-speed data and Voip device provisioning suite for broadband providers.
Lemur Networks announced the first cable customer, Adams Cable Service, for the recently enhanced version of the OSS provider's i-Fabric Firmware Manager software. Adams Cable, an early adopter of Lemur's i-Fabric software suite, will deploy the new software in cable systems serving 25,000 subscribers in New York and Pennsylvania. Lemur touts the new version of its software for its ability to find and upgrade DOCSIS 1.0 cable modems remotely.

Mentis said WOW! Internet and Cable Service has installed the Mentis Work Order Response Center (WORC) solution to automate service fulfillment operations. By connecting the integrated workforce module with the core billing system, WORC is designed to preserve all information about the customer in a single location and ensure that dispatchers, call center representatives and technicians have a complete view of the customer. Mentis said WORC, built on the Mentis Real-Time Response platform, has already chopped more than $300,000 in monthly field operations expenses for WOW!, raised service levels in the broadband provider's Dispatch Center and Network Operations Center to more than 90% and sliced incoming calls by more than 20% and 30%, respectively.

SupportSoft said Adelphia Communications recently deployed the vendor's SmartAccess software for automated broadband installation in less than 70 days. With the addition of Adelphia, SupportSoft said, it now provides its Service Automation Suite software to the top five U.S. MSOs, which account for more than 12 million high-speed data subscribers.

Service Control Solutions

Start-ups in the IP service control category -- Allot Communications, Ellacoya Networks and P-Cube Inc. -- were also active in Anaheim.

Allot and Northland Cable Television said the cable operator is using Allot's traffic management system, NetEnforcer, to manage bandwidth for the MSO's 80 headend sites in Alabama, California, Georgia, Idaho, the Carolinas, Mississippi, Texas and Washington.

With NetEnforcer, Northland said it can now manage peer-to-peer (P2P) traffic and restrict aggregate peak bandwidth usage in particular areas. Separately, Allot debuted its new NetEnforcer AC-1020, which tracks, classifies and shapes network traffic up to Layer 7.

Ellacoya inked a non-exclusive pact with Arris that will allow Arris to distribute and sell Ellacoya's bandwidth management systems to cable operators throughout the world. Ellacoya's system consists of its 4000 and 16000-series IP switches and its Service Logic Software. The deal adds another feather to Arris' cap while Ellacoya gains access to Arris' worldwide sales and support network. The two companies said Arris has already installed Ellacoya's service management system with "several" undisclosed North and South American cable operators.

P-Cube introduced Engage 2.0, a network traffic optimization system designed to enable cable operators to scrutinize P2P traffic faster and more efficiently. It's also aimed at supporting new Voip protocols and applications, such as SIP and Skype. In addition, Engage 2.0 offers enhanced abilities for cable operators to protect themselves against DDOS and worm attacks. P-Cube said the new software, crafted to work in conjunction with DOCSIS, extends the service control functionality across the entire HFC network.

Other Western Show Tech News

A number of other cable tech vendors had new developments to highlight too. The list includes ADC, Advent Networks, Arcwave Inc., Juniper Networks, Motorola, Nortel Networks, Toshiba and a new industry technical alliance.

ADC introduced the Cuda 3000, a carrier-class cable modem termination system (CMTS) created for smaller cable systems serving markets of up to 50,000 homes passed. ADC said the new CMTS, available in multiple configurations, can grow with the customer base, unlike fixed configuration "pizza box" systems. In addition, the company said, the Cuda 3000 can deliver such advanced IP services as residential high-speed data, commercial data, VPNs and voice services while providing a software and hardware upgrade path to DOCSIS 2.0. ADC will start selling the new equipment in February.

Advent showed off its new Ultraband USR 4400 Switch Router, a compact 1U rack-mountable alternative to its chassis-based platform, the USR 8800. Like the latter platform, the USR 4400 is designed to deliver dedicated IP services to business subscribers via coaxial connections. Advent said a single USR 4400 can support up to 64 customers, providing each with a 2 Mbps downstream and 500 kbps upstream data connection.

Arcwave said it's begun shipping ARCXtend Release 1.1, a wireless plant extension system for MSOs looking to serve small and medium-sized businesses. The wireless drop system, featuring Arcwave's PureBurst transmission technology, is designed to enable cable operators to send upstream DOCSIS channels over wireless links without laying new cable or straining their HFC networks. Arcwave officials said PureBurst keeps any extraneous noise or disturbance from leaking into the cable network when the ARCXtend Network Hub isn't sending upstream data.

Juniper and Motorola Broadband said Motorola has joined the Juniper Networks Infrastructure Alliance. The companies said the move will boost the interoperability between Juniper's IP-based products and Motorola's line of CMTSs.
In other Motorola-related news, Bresnan Communications said it picked Motorola Broadband's flagship CMTS, the BSR 64000, to support the launch of high-speed data services in the MSO's Rocky Mountain region. Bresnan said it will also use Motorola's router and other DOCSIS-qualified equipment to back future deployments of advanced IP services in the region, possibly including VoIP.

The MSO previously disclosed that it would use the BSR 64000 to back a 3,000-mile upgrade of cable systems in Montana, Wyoming, Colorado and Utah.

Nortel announced two cable hits at the show, scoring deals with Cablevision Systems' Lightpath business telecommunications unit and Mediacom Communications. Both Lightpath and Mediacom have deployed a carrier-grade dense wavelength division multiplexing (DWDM) metro optical transport solution from Nortel to deliver advanced broadband services. Each MSO is using Nortel's OPTera Metro 5200 Multiservice Platform as it gears up to provide IP telephony and other advanced IP services to customers.

Toshiba demonstrated its new 802.11g-enabled PCX4500 wireless cable modem gateway at the show. The DOCSIS 2.0-certified device, the latest in Toshiba's line of combined cable modem, wireless router and security firewall units, offers security features from Jungo Software Technologies, a 10/100 port and Texas Instrument's TurboDOX bandwidth acceleration software. Toshiba intends to start selling the unit to cable operators this winter.

Finally, a group led by Motorola, Cisco Systems and Entropic Communications announced the formation of an alliance to use existing coax cabling to connect TV sets, computers and other consumer electronics equipment in the home. Group organizers say they aim to create a network that can deliver DVD/HDTV-quality video and Internet access to every room without any new connections or wiring. The alliance will focus on developing technical specifications and certifying products to meet this goal.

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