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Broadband access and services are the new battlegrounds for Internet service providers (ISPs), telecommunications providers and cable television companies. Those that control the high-speed pipes may ultimately control the customer by offering a bundle of voice, video and data services.
Digital subscriber line (DSL) and cable modem technologies are currently locked in a battle for broadband access supremacy, with fixed-wireless and other alternative connectivity technologies on the outside looking in, but showing great promise in the years to come.
Boston-based The Yankee Group’s (www.yankeegroup.com) Analyst and Director of Broadband Access Technologies, Matt Davis, describes the state of the broadband access market and his vision of the industry in the years to come.
BW: How fast do you see broadband subscriber numbers rising in the next five years, and what will be the driving forces and potential obstacles?
Davis: We have forecasted, and continue to forecast that growth will be slow and steady. Broadband availability has reached 75 percent or so of U.S. homes, so we’ve passed the lack of infrastructure barrier. The next barrier we have is pricing. We believe that broadband pricing has to come down to be closer to a $30 price point. We’ve seen service providers, both from the cable and DSL side, exploring tiered pricing, trying to bring customers in on a lower package at a lesser price, and ultimately migrate them up in price and functionality.
BW: What technologies will drive the increased availability of broadband?
Davis: When we tracked early cable and DSL deployments, they were in the 30 NFL cities. Then they moved into the tier 2 cities and began to expand a little bit after that. With the telecom downturn, the push to get broadband deeper into rural areas has pretty much stopped. To get past the 75 percent to 80 percent penetration, up to say 95 percent or 98 percent, is going to be a hard road. However, that 20 percent gap spawns opportunities for technologies like satellite, fixed wireless and fiber to the home. I think we are going to see greater pressure coming from alternative access technologies.
BW: Of the alternative technologies you mention, which ones do you see making the most progress in the next couple of years?
Davis: I think in terms of numbers, it will be satellite. I think fixed-wireless will also have a lot of interesting applications: hot spots, wireless LANs and point-to-point backhaul. However, I think the technology still has to mature. There are a lot of barriers for fixed-wireless deployments: expensive customer premise equipment and difficult installations. I know they’ve overcome some of those barriers with non line-of-sight and roaming technologies.
BW: How will the fall of T–1 prices affect the adoption of other broadband access technologies?
Davis: We’ve reduced our small- and medium-sized business DSL outlook two years in a row because of the resiliency of T–1s. The unchannelized T–1, at $300 or so per month, has proven to be very successful. That certainly has constrained the growth of DSL, and with CLECs and DLECs falling off, the only game in town is the ILECs, and the ILECs have chosen to continue to push T–1s. I mean why wouldn’t they?
BW: How is the move to bundled services affecting the broadband access market?
Davis: The biggest macro trend I am tracking right now is the increased importance of broadband in service package bundles. In the past, broadband access services have been peripheral business lines. Cable MSOs’ core business was cable television, and telcos had local voice. The broadband battlefield is going to have increasingly high stakes because if you lose a customer’s broadband business, you will not only lose the $40 per month broadband fees, you will lose the whole customer, and all of that revenue.
For network administrators, the best security protection strategies have involved intrusion detection systems (IDSes), such as firewalls and anti-virus software. However, new active Internet content threats will demand more complete strategies says the report Active eIRM - New Realities in Security for Managing Electronic Infrastructure Risks, by Boston-based Aberdeen Group Inc. (www.aberdeen.com), which provides IT market intelligence, positioning and market acceleration services.
IDSes have one major flaw; they rely solely on pattern recognition and are only as good as their last signature files. Recent Aberdeen research found the following security risk data:
The most dangerous code is now active Internet content, which includes malicious code, software microbes, Trojan horses, worms, backdoor traps, password stealers, e-mail handle grabbers, and port snatchers.
IT managers and network administrators say that the heart of any reliable security plan is being able to detect actual risk, and then establish and implement measurement systems, the Aberdeen report says.
According to Aberdeen, the most comprehensive new strategy to combat active Internet content is active electronic infrastructure risk management (Active eIRM), which is a combination of security policy, security applications, risk analytics, notification systems, and software agents. Active eIRM includes:
The overall theme of Active eIRM is automation and comprehensive data collection, analysis and policy building. By combining security policy and risk analytic applications for use with existing security point products and the new class of distributable policy enforcement agents, network administrators can more fully automate security processes. Three components - policy, monitors, and event logs - should be present in every repeatable and testable security deployment.
The Aberdeen report profiles the following companies that are developing new and effective security products that fit well into the Active eIRM scheme:
While no security system is impregnable, by combining data collection and analysis with advanced protection applications, network administrators should be better prepared for tomorrow’s security threats.
Assure That Your Standard Bet Will Pay Off
Before service providers and IT managers deploy new equipment, many times they must first decide which industry standards to follow to make equipment and systems interoperable. The decision to adopt or ignore new standards can make the difference between a smooth running network and a hodgepodge of boxes and wires.
Technology executives must carefully assess which standards are not only useful, but likely to be widely adopted in the industry says David Troung, an analyst with Cambridge, Mass.-based Forrester Research Inc. (www.forrester.com) in his report, When to Bet on a Standard. "Because standards are such a high-stakes game, a bet for or against one can turn out to be a career-making move, or professional suicide."
Troung identified four traits technology executives should use to evaluate the potential success of proposed standards.
Simplicity. Standards that address clear problems with well-circumscribed, unambiguous solutions, such as TCP/IP and XML, are more likely to be successful. If a standard attempts to solve a complex problem, the problem should be broken down into components parts and standards that address components individually, such as the XML family of standards - XPath, XML Schema and XQuery.
Strong and diverse backing. If many companies back a proposal, it is usually a good sign. However, if those same companies usually agree anyway, their combined weight won’t mean as much as if competitors and archenemies band together to push a proposal, such as Sun Microsystems and IBM did with Java.
Multiple implementations. Standards are tested when they move into product implementations. When subjected to interoperability testing, their ambiguities, limitations and faults are discovered. Confidence in standards’ longevity comes when startups and heavyweights join the game and test the specifications, as is now happening with SOAP implementations.
Consensus. New proposals that duplicate the work of existing specifications face uphill battles, even if they are technically superior. Proposals that unify competing efforts have better chances of success, as IBM and Microsoft did by combining XLANG and WSFL to form BPEL4WS.
Troung also warns technology executives to be wary of first-mover disadvantage. Even though it is contrary to normal business-think, only embrace standards when they are mature enough to be able to retrofit the inevitable changes. First movers often commit to immature standards, and second movers can get better results because they adopt the improved versions.
Finally, keep in mind that risk and reward go hand in hand. The right time to commit to standards may not necessarily be when they are already well adopted; it depends on the business plan. Companies seeking an innovation edge will experiment with standards early, risking wasted time if proposals fizzle, but garnering huge rewards if they catch on.
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Standard Scorecard Use this Forrester Research Inc. scorecard to determine the likelihood of a standard’s success |
| Level of complexity |
2 = More than 20,000 words (100 pages) 1 = Fewer than 20,000 words 0 = Fewer than 6,000 words (30 pages) |
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Vendor backing |
2 = Club of friends or lone effort 1 = Archenemies agree on it 0 = Taken for granted by all |
| No. of product implementations |
2 = None or one 1 = Two to five 0 = More than five |
| Level of competition |
2 = A competing spec (even if inferior) is already widespread 1 = Competing specs exist but with similar momentum 0 = No alternatives (or all competitors merging into single spec) |
| Total | 6
to 8 = High risk 4 to 5 = Medium risk 0 to 3 = Low risk |
Companies that do not seek to be on the bleeding edge, but rather expect price to be their advantage should postpone the expense and risk until it is unavoidable.
Service providers now can now use one system and one vendor to deploy video on demand (VoD) and broadcast television over copper to compete with cable and satellite companies for consumer wallet share.
Pleasanton, Calif.-based Tut Systems Inc. (www.tutsystems.com) announced in November its acquisition of Lake Oswego, Ore.-based VideoTele.com Inc. ( www.videotele.com), a subsidiary of Beaverton, Ore.-based Tektronix Inc. ( www.tektronix.com). The deal will enable Tut to offer a complete video on demand (VoD) and broadcast digital television programming system, from the head-end video encoding and delivery system to the voice, video and data distribution equipment in the central office (CO) says Steve Klein, Tut’s vice president of carrier marketing.
There are currently approximately 120,000 VoD subscribers in between 80 and 85 deployments around the world says Ryan Jones, an analyst with Cambridge, Mass.-based The Yankee Group ( www.yankeegroup.com). "The majority of the market consists of smaller ILECs and IOCs right now."
While current numbers are nothing special, the potential market for VoD and broadcast digital television is driving deployments and technology advancements. "More than 24 million households will have access to VoD in two years, says Josh Bernoff, a principal analyst with Cambridge-based Forrester Research Inc. (www.forrester.com). The report, Telco Video Delivery on the Brink, published by Scottsdale, Ariz.-based In-Stat/MDR Group (www.instat.com) predicts that there will be 1 million subscribers to telco video services by 2004.
Tut’s acquisition of VideoTele.com gives it a foothold in this early stage market. "VideoTele.com is really the unchallenged leader in the encoding and head-end equipment side of the video over twisted pair industry," The Yankee Group’s Jones says.
Klein says adding the Intellihub equipment to the video delivery system will significantly reduce the cost to deploy video over copper. Using the Intellihub, the cost to deploy video over copper to 1,000 subscribers will cost between $55 and $65 per video subscriber, Klein says. Deploying the same system using an IP router doing multicast, which is what a number of providers use now, cost between $140 and $150 per subscriber, Klein claims.
Tut has no immediate plans to integrate VideoTele.com’s equipment into any existing Tut equipment, or package the two platforms in exclusive arrangements. VideoTele.com has a number of relationships with other access system vendors, such as Rohnert Park, Calif.-based Next Level Communications Inc. ( www.nlc.com), Petaluma, Calif.-based American Fiber Communications (www.afc.com) and Petaluma-based Calix Networks Inc. ( www.calix.com).