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Technology

Narad to Ops: Get Defensive

12/05/2004 7:00 PM Eastern

Narad Networks Inc. is back, pitching cable operators on a more-reliable commercial services technology that it said can also hit the telcos in a revenue stream that’s funding their video-buildout plans.

The new technology strategy is to deploy a broadband-access network with switched Ethernet overlay on existing coaxial cable.

The difference this time: the switch is on the outside of the network, said Narad chief operating officer Chuck Kaplan. “We install passives to go around the amplifiers,” he said.

COST ADVANTAGES

The strategy has several benefits, he said. First, it separates the capital expenditures for commercial services and keeps more technology off the main transport plant. This model allows cable systems to better allocate costs, and with the amplifier workaround, it leaves network engineers with fewer network elements to monitor.

And it’s battle-hardened technology, having been tested at 40 degrees below zero and at 150 degrees, said Kaplan, who acknowledged that Narad’s older technology didn’t work well in extreme temperatures. Thus, MSOs had to open trunk lines to make repairs.

But the new technology has been deployed by one MSO and is passing initial tests, he said. Three other MSOs are looking to deploy it.

“We’re ready,” he said.

Narad plans to transmit voice and data small-business services at transmissions between 908 Megahertz and 1.08 Gigahertz. That allows the MSO transmit out-of-band, but below existing taps and passives, Kaplan said.

There’s no signal degradation, he said, and systems can still apply quality-of-service and traffic-classification applications.

Cable systems have generated more than $1 billion in revenue from commercial services, but the entire category is valued at more than $160 billion.

Although cable has made some inroads, Kaplan says it’s vital for cable to take market share away from the telcos in the business arena. The reason: revenues from commercial services are funding the telcos’ fiber-to-the-home video builds.

'CABLE HAS TO ATTACK’

“Cable has to attack where they are getting the revenue,” he argued. “Cable has recognized there is a $160 billion enterprise business. They’ve gotten their wakeup call.”

Kaplan said Narad’s new technology can deliver service at 5 Mbps, superior to the telcos’ T1 offering.

As an example, Narad examined a major U.S. city with 12,000 businesses. It found that 3,400 businesses spent $250 to $500 a month on telecommunications services, while another 5,500 businesses spent between $500 and $1,000 a month, for total of $3.9 million. Another 3,600 businesses spent between $1,000 and $3,000 a month to total $5.9 million. The latter two categories, comprise cable’s sweet spot, Kaplan said. “That’s where the money is.”

It’s too expensive to deploy fiber to those businesses, while the Data Over Cable Service Interface Specification (DOCSIS) might not be robust enough. In the past, an MSO’s only choice was to lease T1 lines from their telco competitors.

Using the major-city example above, Kaplan estimates that 20% of the nodes in that community serve 70% of the businesses. Those nodes can be served with Narad’s technology.

“You can use DOCSIS in the sparse places and compete with 3 to 5 [MHz of] symmetrical service against the T1 market,” he said.

September