Voice Over Packet Cable
Voice Over Packet Cable
by Harvey Bazarian, CEO
Wednesday, Mar 02, 2005
Harvey Bazarian heads an IT consulting group that works at the frontier of innovation. He sums up the enormous potential of this better version of VOIP that could revolutionize communications.
Cable companies may soon provide residential telephone service using “Voice Over Packet Cable” (VOPC) technology. This move into a market that has been dominated by Ma Bell and her Baby Bells is likely because VOPC offers lower cost phone service that can be delivered over a huge and growing base of installed cable lines (cable TV) and modems. Additionally, this technology can be used to offer broadband services combining voice, video, and data, thereby posing a major threat to the local telephone franchises and dramatically changing the way Americans communicate. This paper provides an overview of the technology, market potential, and impacts on society.
What is Voice over Packet Cable?
Basically, Voice over Packet Cable provides voice service on a high- speed “broadband data“ circuit using a Cable Labs standard called DOSCSIS 1.1. DOCSIS differs from VoIP (Voice over Internet Protocol) because it provides an industry standard that allows disparate networks to talk to each other with the same convenience as a standard phone call. The significant advantage VoPC has over VoIP is the combination of an always on virtual data service with the guaranteed “dedicated” path required for quality voice service. In your home, you could interactively use your video, voice and data to obtain new and exciting services.
How does VoPC work?
The Cable Modem, that little box inside your house with blinking lights will provide dial tone and set up and terminate a call. Certification and security features are incorporated into the Cable Modem. The conventional high speed broadband cable modem (CM) is combined with a G.711, G.728 and 729e CODECs to turn digital data to your basic analog telephone line by digitally encoding and decoding analog telephony signals, and putting them into IP packets.
The Cable Modems connect to a common system called CMTS that consolidates individual cable links into a High Speed IP connection to the network. The Call Management Server (CMS) is the call and signaling “software brains” for the entire Voice over Packet Cable Network. Installed in a very large central computer, the CMS provides the custom calling features, call detail for billing software and signaling to set up and terminate local calls. The CMS controls the Cable Modem, the Media Gateway, and special applications such as voice messaging devices in the network.
The Media Gateway connects calls over fiber or copper. The Media Gateway converts the TDM voice into packets for transport over the IP network. This provides an interface between the public network and IP networks.
Can money be made in this market?
With so much competition in Telcom, why would a cable company enter this market? Growth in cable revenue is a key to cable companies survival as most face competition from satellite cable. Broadband access using cable modems and VOD (Video on Demand) are the only opportunities for new revenue. Customers have shown a preference to buy multiple services from one vendor for the discounts they obtain. This bundling of voice, high-speed data and low cost long distance calling over pure IP networks puts in place a lower cost total service for the consumer. That’s why cable companies are moving to build the VoPC network and bundle telephone service with current cable products.
Based on discussions with leaders in the industry, trials are occurring now with general deployments starting soon. Initial applications will be long distance connections using IP as a replacement for leased TDM voice circuits from Carriers such as Sprint.
As Voice over Packet Cable is a telephony “clone” service, the initial service offering will be basic telephone service with a lower cost bundle of other cable company services. VoPC’s 40% cost advantage will play well here. But longer term, selling a commodity is a zero sum game.
A second entry point for VoPC is to expand into areas with existing telephone equipped cable using HFC (Hybrid Fiber Coax) at lower cost. HFC based VoIP calling can provide quick expansion of telephone service for the existing 4 million HFC voice customers.
The third entry point is the non-telephony equipped areas and the 16 million cable modem customers in the US. With an estimated 30% market share, about 5 million potential new voice customers could be served by cable. A conservative estimate of residential revenues from telephony alone (using a $300 per line revenue stream) results in a market forecast approaching $1.5 billion in 2006.
While money will be made from selling plain service, major market gains will be made from the combination of video, high bandwidth data and voice as one integrated service. My best guess is that these enhanced features will be adopted about 2006. The hidden advantage of a VoPC network is its ability to make these gains while retaining existing cable customers and reducing losses to satellite.
How would life change for you?
Rather than focusing on the specific services, let’s look at how the technology can create a plethora of value added services. Several social trends are driving this need. There is an explosive demand for richer communications, as seen in the use of cell phones and the Internet. Business communications are soaring in a global economy. And an aging population wants to be connected, while there is a general concern over national security personal safety. VoPC can allow groups of people to instantly communicate with each other with voice and video hook up.
One application is group gaming with instant responses and real-time access across large distances. If you watch the interaction of young people today, group activity can often be one or two video players and a group of watchers. Now, staying at home, the entire group can enter a secured game site. As with the Internet, this may be an instant success.
Applications could also support medical care at home with significant cost advantages to individuals and society as a whole. The ability to monitor a person’s critical data, view the patent and talk to them can reduce the need for hospitalized and elder care.
Current Homeland Security efforts are also using today’s technology to broadcast public safety warnings. VoPC provides a secure group broadcast capability with voice, text, and video. This would work similar to Nextel’s “Walkee Talkee “ feature that can instantly tie a work group together. Consider the National IP network tied to wireless and wireline voice and video with high-speed graphics and face-to-face communication. The mobilizing of public service groups enhances society's defense capability and provides improved emergency response.
With a significant increase in retirees, the creation of enhanced residence communication is another valued benefit. Instant online support and voice support from expert systems and popular auction services can be improved with real-time and voice links. Validation of the seller, real time viewing of the product and Q & A can enhance the purchasing decision.
The Intelligent home provides virtual instant response to voice commands and the delivery of desired content. Programming can be shared rather than purchased by using on demand centrally stored programming. Music, movies, home repair “self help” are just conceivable services. Making the at home experience pleasurable is the goal of these services.
Voice over Packet Cable is at an early stage of development, but it is a reality from a technical viewpoint. Cable companies are pursuing it to increase revenue and protect their existing franchise, while the changing needs of society will benefit from the enhanced services.
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