CATV and the Internet: A Quiet Revolution August COOK Report published

[Gordon Cook <cook () path net>]

Cable TV To Play a Major Role in Business Communications, and the Internet as
Well as in Entertainment Side of NII

Amid the hype and hoopla of NREN and NII a quiet revolution of major proportions
is taking place.  The CATV industry is moving from a provider of entertainment
to a serious role in business communications and Internet services.  This
revolution is chronicled in documented research report the first half of which
is published tonight in the August issue of the COOK Report on Internet ->
NREN.  (The second half will appear in the September COOK Report.)

The COOK Report has completed interviews with CableLabs, Hybrid Networks, DEC,
and Zenith Electronics and others.  It has combined these interviews with
reports from these groups.  It has also studiedand incorporated salient
results of several *large* database searches.  Here are some highlights of
its findings.

DEC, Hybrid, and Zenith all provide Ethernet via CATV.  Hybrid provides an
asymmetric Internet connection as well via hardware and software and other
services.  DEC provides a bi-directional 10 MGB Ethernet by means of hardware,
software and control of the CATV channel.  Zenith provides hardware components
that customers may use to tap into a CATV provided Ethernet.  All provide 4
megabit or greater inbound channels that make possible Internet inbound
traffic at these rates.  All are fairly expensive. But all are FAR LESS
expensive than what leased line rates for these services would cost.  They
(especially Hybrid) are likely to provide very serious competition for ISDN.
All are either operation or in test with CATV providers now.

Most people are likely to assume that these developments are of limited use
because the CATV systems are all islands with no interconnectivity.  Material
from CableLabs shows that this is changing dramatically.  Multiple Cable
System operators are taking advantage of the fiberization of their trunks to
interconnect and form regional hubs.  These hubs in turn are interconnecting.
Sizable regional *NETWORKED* CATV systems are forming.  These systems in turn
are linking to the backbones of competitive access providers such as MFS and
Teleport.  They are also interconnecting with the PSTN.  Rogers Cable in
Canada where IBM's Paris gigabit router has been in test for almost 2 years is
the furthest advanced with a fiber network extending over more than 450 Miles
from London to Toronto to Ottawa.

CableLabs President Richard Green has told Congress that the CATV industry
will build the on ramps and off ramps for the national data superhighway and
will do it now without any Federal assistance.  The relatively unregulated
CATV industry is moving with great speed.  CableLabs has just completed an
invitation only conference at Breckenridge Colorado designed in part to
introduce system operators to the Internet and to the idea that they had
better get ready to offer Internet services now.

The COOK Report (with detailed illustrations) examines some of the CATV
network plans including plans for business communication architectures that
include wireless, and telephony as well as fast packet switching capabilities.
It also looks in detail at Rogers CableSystems network.  The CATV industry has
so many advantages that it looks increasingly likely to eat the telco's
(especially the RBOCs) lunch.

Part 2 TO BE PUBLISHED IN SEPTEMBER'S COOK REPORT will include: -The Telephone
Industry Response; 

Video Dial Tone; 

An Alliance Alternative? 

If You Cant Operate or Ally, Buy?  

Part 3 (Also in September) 
The Internet Fallout.  

Near term- How Will Ethernet/Internet Services over CATV Shake Out?  Includes
a 1250 word long assessment of Hybrid Networks by Robert Berger.  

Mid Range: the Impact on the National Science Foundation vBNS solicitation.
Why IBM may make the NSF a vBNS Offer it Can't Refuse.  IBM and Rogers Cable
Paris Trials analyzed.  Failure(?) of Lucy Fjeldstadt's broadband network
plans.  A national backbone for the CATV industry?  

and finally
The Long Term Impact on National Information Infratstructure.


Here are some quotes from Part 1.

"Mr. Chairman, the cable industry is making investments in these new
technologies and services today - they are not merely pipe dreams on someone's
drawing board.  Moreover the cable industry's investments are privately
financed with no public funding.  They are relatively inexpensive and very
cost efficient.  Most important the entire cable infrastructure can be
upgraded to provide two way interactive multimedia services for about $20
billion which is just a fraction of the $400 billion required for the
telephone companies to comparably rebuild their local networks. --
CableLabs President Richard Green to US Congress

_______________
In other words the cable industry is prepared to implement its own information
infrastructure and do it without Federal investment.  And when it completes
such a transformation, the cable industry will be a two way digital carrier
ready to take on many and eventually all of the functions of the telephone
network.

________________
In the meantime what we have emerging with Hybrid is a new and different kind
of Internet services provider -- one with a technology oriented to the needs
of small high-tech businesses and independent professionals - especially those
working at remote sites.  Hybrid Networks serves as a bridge between the
Internet, the local CATV operator, the PSTN and the customer.

_________________
One thing in favor of ISDN and the telephone industry in general was that ISDN
is switched and can connect, in theory at least from anywhere to anywhere
while the Ethernet over CATV services are isolated islands dependent on
telephone technology to talk to the rest of the world. This may be true now.
However significant changes in CATV architecture are under way.  Systems are
rapidly becoming linked, both to each other, and to the Public Switched
Telephone Network (PSTN). CableLabs is working on plans to rapidly change CATV
architecture. 

__________________
At the mid May 1993 cable conference cable executives were taking aim.
"Cable's first telephony target should be $5 billion private line market,"
said Robert Annunziata, President of Teleport Communications, the competitive
access provider (CAP) co-owned by four cable companies, but he said "the major
money and the major marketplace is in switched services."  CableLabs President
Richard Green urged conference attendees to "check your guns at the door" and
talk about ways of collaborating, not fighting, over past differences or
future markets.

____________________
Cable's move into telecommunications "is facilitated by new technologies, but
it must be driven by applications. We cannot afford to build a 'field of
dreams,'" said Optical Networks Inc.  Pres. Andrew Paff.  Paff said he sees
future not as cable-telco war but as "a telco-telco war with cable companies
as partners."

Also in the August issue of the COOK Report is material on the
Telecommunications Policy Roundtable -- including a complete list f the more
than 30 organizations that attended the July 6th meeting.

The complete 12,500 word report:  "Cable or Telcos?  Who Will Build and
Control the National Information Infrastructure?" is available *NOW* as a
special report.  The price for non subscribers is $250, and for current
subscribers to the COOK Report is $150.

_______________________________________________________________
Gordon Cook, Editor Publisher:  COOK Report on Internet -> NREN
431 Greenway Ave, Ewing, NJ 08618
cook () path net                                   (609) 882-2572

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