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Today's report from Web Editor
Susan Rush
• TComLabs slates IPCablecom
interop event
• Cable outlines common
operating initiative
• Time Warner buys Terayon's
DOCSIS 2.0-based modems
• Cisco, ADC score CMTS
deals
• MidStream taps cable
vets for tech board
• Old is new with ReplayTV
5000 series
• CE industry surprised
at Panasonic's DTV-Cable Deal
• Consumer Groups:
FCC uses wrong standard to measure subscribers
• Broadband briefs
TComLabs slates IPCablecom interop
event
Roger Brown, CED
The European version of packet telephony over cable
TV networks will get its first tryout during the first IPCablecom
interoperability event, slated to occur Jan. 6-10, 2003 at the
tComLabs facility in Ghent, Belgium.
This inaugural event will focus on IPCablecom, Europe's
version of the PacketCable specification. In its first version,
it standardizes the voice-over-IP services of a single-zone network
belonging to one operator and the interfaces to the PSTN (public
switched telephone network) network. Deviations between the European
and U.S. version are related to the differences in the traditional
telecommunication systems that are used in Europe and the U.S.
These are mainly related to the use of V5.2 and the differences
in SS7 implementation. Another area of difference is the POTS
interface and supported CLASS-features.
"The objectives of the interoperability event
are to determine what the state-of-the-art of the IPCablecom products
is, to give an opportunity for the product developers to test
their products with regards to interoperability and to accelerate
the introduction of IPCablecom compliant products on the cable
market," said Luc Martens, CEO of tComLabs, in a press release.
The interoperability event will focus testing on
the access equipment of the IPCablecom system and the interfaces
to the PSTN network. To help manufacturers achieve interoperability
for the security interfaces, a separate lab will focus on the
security aspects.
This event is the first of what is anticipated to
be a series of interoperability events, said tComLabs officials.

Cable outlines common operating
standards
Jeff Baumgartner, CED
In response to pressure being applied by Wall Street
and as part of an effort to regain investor confidence in the
cable sector, almost a dozen MSOs pledged support of new voluntary
guidelines for consistent operating statistics.
The guidelines, established with the support of the
National Cable & Telecommunications Association (NCTA), are
outlined as follows:
- The identification of six standard reporting categories for
capital expenditures: customer premise equipment, commercial,
scalable infrastructure, line extensions, upgrade/rebuild, and
support capital.
- Establishment of a new definition of customer relationships:
"The number of customers that receive at least one level
of service, encompassing voice, video, and data services, without
regard to which service(s) customers purchase."
- A standard definition for revenue generating units (RGUs):
"The sum total of all primary analog video, digital video,
high-speed data, and telephony customers, not counting additional
outlets."
Eleven publicly traded MSOs pledged to support and
adhere to the new guidelines no later than the first quarter of
2003. They are: AT&T Broadband, Time Warner Cable, Comcast
Cable Communications, Charter Communications, Cox Communications,
Adelphia Communications, Cablevision Systems Corp., Mediacom Communications,
Insight Communications, CableOne and General Communications Inc.
"This is a positive development for our industry
and our investors, who we believe will gain a clearer picture
of our companies through these actions," said Michael Willner,
Insight CEO and NCTA chairman.

Time Warner buys Terayon's DOCSIS
2.0-based modems
Duffy Hayes, CED
Known in years past as the division within Time Warner
Cable that launched the "Full Service Network" trial
for once-green interactive services, the MSO's Central Florida
division announced Monday the addition of DOCSIS 2.0-based cable
modems from Terayon Communication Systems to its high-speed Internet
mix.
Specifically, TWC will add Terayon's TJ 615 modems,
which are DOCSIS 1.1-certified, but are outfitted for the DOCSIS
2.0 specification, which boasts a broader upstream path and greater
noise resistance.
In addition to TWC, three other MSOs -- Adelphia
Communications, Cox Communications and Comcast Cable Communications
- have purchased Terayon's DOCSIS 2.0-based modems.
The Central Florida Division is one of Time Warner's
largest, passing more than 1.1 million homes and serving more
than 710,000 basic subscribers in nine Florida counties.
Cable operators are just starting to adopt cable
modem technologies based on the DOCSIS 2.0 specification; the
timing coincides with the start of CableLabs' certification wave
24, just underway last week. In the latest cert wave, a handful
of cable modem makers, including Motorola Broadband, Scientific-Atlanta,
Texas Instruments, Xrosstech and Terayon, submitted cable modem
models for official DOCSIS 2.0 certification testing.
Terayon submitted its TJ 715 model in the first DOCSIS
2.0 certification wave, though Time Warner opted for the DOCSIS
1.1-certified TJ 615 for its Central Florida subscribers. Both
models, however, are based on Imedia Semiconductor chipsets. Imedia
is Terayon's wholly owned semiconductor spin-off company.

Cisco, ADC score CMTS deals
Jeff Baumgartner, CED
Cisco Systems Inc. and ADC Telecommunications both
announced cable deals for their respective cable modem termination
system (CMTS) products Monday.
Cisco said Charter Communications Inc. has selected
the vendor's DOCSIS 1.1-qualified uBR10012 CMTS in anticipation
that the MSO will serve more than 1 million cable subscribers
by year-end 2002. The MSO has already deployed the Cisco chassis
in six states: Tennessee, South Carolina, Michigan, California,
Wisconsin and Missouri.
The uBR10012 is Cisco's flagship CMTS, complementing
series such as the uBR7100 and uBR7200.
Meanwhile, Cox Communications announced the purchase
and installation of more than 20 of ADC's Cuda 1000 compact CMTSs
on the MSO's Kansas network, which serves several rural areas.
Targeted to small operators, small regions of large
cable networks and environments such as multi-dwelling units and
universities, ADC's DOCSIS-based Cuda 1000 is the smaller brother
of the company's carrier-class, DOCSIS 1.1-qualified Cuda 12000
CMTS.
Cox also has deployed the Cuda 12000 in several regions,
including Northern Virginia; Santa Barbara, Calif.; Greater Oklahoma
and Greater Kansas.
According to recent figures from Gartner Dataquest,
Cisco and ADC ended the first half of 2002 as the top two providers
of CMTS gear in both revenue and market share. Cisco led with
CMTS revenue of $104.3 million and 57 percent of the market, followed
by ADC with $34.6 million and 19 percent, respectively.

MidStream taps cable vets for
tech board
Jeff Baumgartner, CED
Video-on-demand start-up MidStream Technologies has
formed a new technical advisory board comprised of several cable
industry veterans. The disclosed members are:
- Technical Advisory Board Chairman Stephen Dukes, president
and CEO of Imaginary Universes LLC. Dukes has held several executive
positions at top MSOs during this more than 26-year engineering
career, including positions at MediaOne Labs, MCNS Holdings
and CableLabs.
- Doug Semon, vice president, consumer technology and
standards, Time Warner Cable. Prior to joining Time Warner Cable,
Semon was director of network operations and member of the executive,
technical and operations group for CableLabs.
- Nick Hamilton-Piercy, senior technology advisory, Rogers
Cable Inc. Piercy previously was chief technology officer for
the Canada-based MSO.
- Dr. Walter Ciciora, currently a consultant specializing
in cable television, consumer electronics and telecommunications
technology, writes a monthly column for CED magazine. Ciciora
was the vice president of technology at Time Warner Cable until
1993.
- Keith Bechard, a consultant, most recently served as
vice president of technical product management for AT&T
Broadband. Bechard also held positions at MediaOne Labs, working
in areas such as video-on-demand and high-definition television.
MidStream said it expects to leverage the knowledge
of its new advisory board members "during all phases of the
company's growth."
Bellevue, Wash.-based MidStream, maker of next-generation
VOD servers with native Gigabit Ethernet support, raised $26 million
in a third round of funding. That gave the company an aggregate
$48 million, enough for a fully-funded business plan, MidStream
President and CEO Ed Huguez told CED in an August interview.
To date, MidStream has not announced any commercial
deployments, but the company is involved in a variety of trials
with undisclosed operators, and has secured a commitment from
a top 10 U.S. MSO.

Old is new with ReplayTV 5000
series
Duffy Hayes, CED
Hard-drive video recorders were supposed to revolutionize
the way we watch TV, remember?
But since the initial hype for digital video recorders
(DVRs) began to wane, and the early adopters gobbled up all of
the first iterations of DVR boxes, device makers in the space
have struggled to create solid business models that will profitably
bring the technology into more of the mainstream.
No DVR company has confronted those struggles more
than SONICblue, maker of the ReplayTV brand of DVR devices. Today,
the company announced further price reductions in their "new"
line of digital video recorders, the 5000 series, in an attempt
to bring box prices more in line with customer expectations for
the technology.
The ReplayTV 5000 series consists of four models:
the 5040, 5080, 5160 and 5320, with 40, 80, 160 and 320 hours
of recording capacity per model, respectively. Along the same
progression, the new aggressive pricing has after-rebate price
points of $249.99, $349.99, $449.99 and $899.99.
Price tags for ReplayTV boxes should not be affixed
with anything permanent, however, if the past is any indication.
Similar 4000 series models were price-slashed in August through
ReplayTV retailers like Best Buy, Circuit City, The Wiz, Tweeter
and Amazon.
While price reduction certainly is the impetus behind
the release of the 5000 series, the new boxes also add a USB connector
for easier connection of multiple ReplayTV boxes in a home network,
according to SONICblue spokesperson Amanda Sanyal.
So far, ReplayTV has been lurking in TiVo's shadow,
as it struggles to define and maintain its own strategic model.
Whereas TiVo has partnered with various operator channels, including
AT&T Broadband and EchoStar Communications, ReplayTV has maintained
a predominantly retail approach to sales. In fact, only in recent
months, ReplayTV has begun charging a monthly or one-time service
activation fee, something that has been a part of the TiVo strategy
from its inception. The recent aggressive pricing for new ReplayTV
devices is a likely indicator that price-conscious consumers aren't
scooping up ReplayTV boxes at retail as the company had hoped.
Whether the new price points are more in line with
customer expectations is an important question still to be answered
by the marketplace.

CE industry surprised at Panasonic's
DTV-Cable Deal
Copyright 2002 Warren Publishing,
Inc.
Communications Daily...10/21/2002
Consumer electronics executives reacted with shock
and dismay to Panasonic's signing of the POD-HOST Interface Licensing
Agreement (PHILA) last week, but said it wouldn't affect negotiations
with cable industry on interoperability standards. Proposed standards
are expected to be submitted to FCC in early Nov., a source said.
"I don't think it will have any impact on the cable negotiations
and we still expect to put an agreement in front of the FCC,"
source said: "The agreement will be vastly different than
what Panasonic has agreed to as a company." CEA Video Div.
has been negotiating with the cable industry on interoperability
standards for three months.
The PHILA agreement will allow Panasonic to manufacture
and market TVs that can directly receive high-definition (HD)
and other digital programming via cable, first of which could
be available as soon as next fall in 36" and larger sizes.
Developed by CableLabs, POD-Host Interface provides standardized
secure communications link between POD (point of development)
module and host DTV. Panasonic Chief Technical Officer Paul Liao
told us the decision to sign PHILA licensing agreement with CableLabs
shouldn't "derail" CEA-cable industry negotiations and
would "support it by showing that the CE industry is not
just posturing and in our case ... we've done what is necessary
to get our products to market." Panasonic, he said, is "strongly
in support of broad agreement" between cable and CE industries.
PHILA licenses will be "defined company by company,"
Liao said. Other CE companies are said to have had discussions
with CableLabs, with Panasonic just first to reach agreement.
Panasonic's agreement is for unidirectional device so "most
of the tough issues don't really apply," he said. For example,
issues involving encoding rules and selectable output controls
(SOC) don't apply to unidirectional products, "so we haven't
changed our position and there is no difference within Panasonic,"
Liao said.
SOC emerged earlier this year as battleground between
CE and cable. It's proposed feature of set-top boxes that would
allow cable operators to remotely disable ability of box to feed
content to various devices and allow for only low- resolution
transmissions. Cable has said SOC is needed for it to remain competitive
with other distributors, while CE industry has countered that
it betrays "assurances recently given to the Congress and
to the consumers." While CableLabs has posted a version of
the PHILA licensing agreement on its Web site, terms of the Panasonic
pact are contained in a confidential sideletter that will be available
to other companies on a nondisclosure basis, Liao said. The timing
of Panasonic's agreement with CableLabs "wasn't driven by
any particular issue," Liao said.
-- Mark Seavy

Consumer Groups:
FCC uses wrong standard to measure subscribers
Copyright 2002 Warren Publishing,
Inc.
Communications Daily...10/21/2002
As clock ticks nearer to 180-day mark on proposed
merger of AT&T Broadband and Comcast, coalition of consumer
groups is challenging FCC's standard in determining subscriber
numbers. "Recent disclosures of questionable subscriber counts
and even outright fraud by multichannel video programming distributors
(MVPDs) demonstrates that the Commission cannot reasonably rely
on 'generally accepted industry data,'" said Consumer Federation
of America (CFA), Consumers Union (CU), Center for Digital Democracy
(CDD) and Media Access Project in filing last week at FCC. Groups
were referring to revelations that Adelphia had fudged its subscriber
counts, that Charter counted cable modem customers as subscribers
of basic video service even if they didn't actually get TV service,
and that DirecTV had counted people who were interested in service
but hadn't actually signed contract. FCC spokeswoman declined
comment. NCTA spokesman said group wouldn't comment until it reviewed
filing.
Consumer groups said FCC should use "more reliable"
standard of "homes passed" or collect total subscriber
data itself. Alternatively, they said, it could require MVPDs
to regularly file subscriber counts with Commission under penalty
of sanctions for falsifying information. "Given the size
of recent mergers, even the difference of a few hundred thousand
subscribers can make the difference between a merger that violates
the ownership cap and one that does not," groups said, referring
to 30 percent horizontal ownership cap which has been struck down
by courts. Commission must have accurate information, groups said,
rather than depend on "third parties beholden to those with
the incentive to manipulate the data." Groups said Commission
should put companies "on notice" that it would consider
"deliberate overcounts" provided to private entities
or SEC or other govt. agencies "evidence of bad character"
that would jeopardize companies' licenses. Groups were particularly
concerned about potential of AT&T Comcast, MAP Assoc. Dir.
Harold Feld said in interview. He said merger was "really
over" subscriber limit, although companies' combined 22 million
subscribers didn't represent 30 percent of MPVD market. "The
only way you can get a sense of their market power is through
'homes passed,'" Feld said.
Comcast spokesman declined to comment on how FCC
evaluated subscriber counts.
Groups' filing came just as cable industry executives
were set to unveil new set of accounting standards that they hoped
would ease jitters on Wall St. about entire sector of cable stocks.
Top executives of major MSOs, including Charter CEO Carl Vogel
and Insight Communications CEO Michael Willner, were to meet in
N.Y.C. Oct. 21 to reveal their plan to analysts. But that wouldn't
necessarily appease consumer groups, which appeared to be more
concerned with FCC methodology. In particular, they criticized
what they called the "flimsiness" of Commission's rules
on insulating companies' separate interests, saying FCC had no
"ability to discover violations."
Groups filed their comments in several proceedings
pending before FCC, including AT&T Comcast merger, in which
Commission was examining companies' plans to insulate AT&T's
interest in Time Warner Entertainment (TWE) from rest of company
until it could sell that interest. "Absent safeguards, the
public can be certain that the Commission's rules will be violated,"
groups wrote: "Only a structural separation that removes
the ability of partners and officers to influence the actions
of the licensee by making the interest attributable can protect
the public from practical ongoing violations of the Commission's
ownership limits." Comments came after companies did, in
fact, agree to certain structural changes in their trust proposal
for TWE. Recent FCC filings show that, among other changes, companies
revised their proposal so designated trustee "shall not consult"
with combined AT&T Comcast on voting matters, director appointments
or approval rights when cable assets were sold by TWE. Before,
AT&T Comcast would have maintained some rights in those matters.
Revised trust agreement also won't permit any communications related
to management or operation of TWE except as required by tax, securities
and other laws. Before, some communications between trustee and
AT&T Comcast were allowed.
Changes came after several consultations and questions
from FCC staff. Clock runs out on FCC review of proposed merger
Nov. 5, although several industry and govt. sources have said
they expect Commission's decision before then. --
Brigitte Greenberg

Broadband briefs:
• Hadar joins Native Networks
Native Networks, a provider of Metro Ethernet technology
for optical access networks, has appointed Rami Hadar as its new
CEO.
Native Networks' products enable carriers to offer
differentiated Metro Ethernet services with increased flexibility
and efficiency over existing SDH/Sonet or greenfield infrastructure
rollouts.
Prior to joining Native Networks, Hadar was co-founder
of Ensemble Communications, which developed wireless broadband
access gear. Prior to that, Hadar was the co-founder and CEO of
CTP Systems in Israel. In 1995 CTP was acquired by DSP Communication,
which was eventually acquired by Intel. Before the acquisition
CTP spun off its cable modem group, which after two years was
acquired by Terayon Communication Systems.
• iVAST nails marketing alliance
MPEG-4 software company iVAST will partner with ITOCHU
Techno-Science Corporation (CTC) to distribute iVAST's MPEG-4
Platform digital media products to its worldwide customer base,
beginning November 1.
CTC provides products and services to enhance enterprise
network systems in a wide variety of industries, including telecommunications,
finance, manufacturing, transportation, medical and other service
industries.
Under terms of this deal, CTC will distribute iVAST's
complete suite of tools for the creation, delivery and playback
of interactive MPEG-4 digital media, including encoding and authoring
suites, media servers and software, and an MPEG-4 player. The
two companies will also integrate software into CTC's Universal
Media Delivery Suite of database delivery solutions.
• Report: EchoStar, Hughes prepare merger Hail
Mary
EchoStar Communications and Hughes Electronics Corp.
are expected today to make concessions on their proposed merger
plan, the Wall Street Journal Web site reported Monday. The report
added that concessions could cover both satellite spectrum and
distribution arrangements, and are slated to go to the Justice
Department.
On Oct. 10, the Federal Communications Commission
rejected the merger as anti-competitive.

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