News

MSOs Will Benefit From Open-Access Opportunities

5/26/2002 8:00 PM Eastern

The Telecommunications Act of 1996 opened up carrier networks but spared the cable world. Internet-service providers cried foul, and open access to broadband cable networks has become a topic of hot debate. However, to date, open-access legislation has been passed on a limited scale, and is frequently appealed and overturned.

There has been no national regulation, but the Federal Trade Commission and the Federal Communications Commission clearly demonstrated the premium they place on open access by mandating that Time Warner Inc. offer at least one alternative ISP service to America Online Inc. before permitting the AOL/Time Warner merger. It is no longer a question of "if," but rather, "when" open-access regulations will extend to the entire cable industry.

There is another, perhaps more compelling, reason for MSOs to focus on open access. Cable operators can extend their business reach and realize a better rate of return on their infrastructure investments, while avoiding the pain that resulted from digital subscriber line providers' single-minded concentration on access alone.

The challenge: to deploy a cost effective architecture that augments rather than replaces existing infrastructure, while providing the flexibility to implement a wide range of Internet protocol service offerings.

The opportunity: to generate incremental revenue by offering a rich array of IP-based services, including access to third party content providers, which gives them just such an opportunity.

REQUIREMENTS

In the current closed cable environment, cable operators maintain control over their networks and their customers' service lifecycle, including deployment, service and billing.

But in an open-access environment, MSOs will require an architecture that allows multiple ISPs onto the cable network without adversely affecting an operator's current subscribers. While MSOs maintain their relationships with their own subscribers, they will need to give each ISP the opportunity to "own" and bill its particular subscriber base.

Operators want to open up their networks as cost-effectively as possible and any solution that requires a high degree of subscriber touch will meet resistance.

Opening their network up to multiple ISP relationships will require that cable operators integrate, and possibly assume management of, new back-office systems from Online System Services Inc. MSOs will need standards-based solutions to ensure they can integrate with third-party systems without incurring heavy costs or losing precious time to market.

On the plus side, significant revenue potential exists from partnerships with ISPs. Deploying value-added IP services to create a rich Internet "experience" for all
subscribers will help reduce subscriber churn. Additionally, cable operators should prepare to offer network services such as virtual private networks (VPNs), bandwidth-on-demand, and streaming audio and PC TV services to both their own subscriber base and their ISP partners'.

Consequently, any architecture selected for implementing IP services must have the flexibility to support various value-added IP-based services (such as high-speed interactive gaming and music downloading) without sacrificing performance. Streamlining the creation and delivery process for these services is also a consideration from both a time-to-market and a cost perspective.

BUILDING A FOUNDATION

Advances in technologies that address network intelligence make the deployment of a service-rich open-access environment easier. One major enabler is policy routing. By implementing policies (or rules), MSOs can map users to critical network services and develop more intelligent and efficient networks. Policy routing gives MSOs the tools needed for initial entry into an open-access environment for regulatory compliance, while also providing the foundation necessary to reap the full range of benefits an open network can provide.

The prime location for applying policies is at the edge of the network, where subscriber traffic is handed over to the network backbone. Major trials and pilots conducted by AT&T Broadband, Comcast Corp. and Time Warner Cable incorporated layer three policy-based IP routing solutions, validating the growing interest in and acceptance of policy routing as the architectural component of choice for open-access networks.

Policy routing plays a key role in open access by allowing IP packets to be forwarded from a particular interface based on criteria other than the IP destination address — which is how normal routers direct packets.

Policy routing enables MSOs to associate subscribers with the appropriate ISP backbone by implementing a policy that checks the source IP address of each subscriber, matches IP source address ranges with policy routing rules and forwards that subscriber's traffic to the appropriate ISP. The policy router forwards all traffic classified for a certain ISP over a virtual circuit or a tunnel to that ISP, keeping each ISP's traffic separate.

As the subscriber base grows, so does the need for scalability. Since policy routing must be performed at wire-speed in order to maintain a high level of network performance, MSOs need to be sure that the routers they select will not experience performance degradation as traffic loads and policy applications increase.

QUALITY OF SERVICE

In the best-effort IP network environment, policies offer MSOs the means to optimize service delivery and build revenue-generating enhanced services. Tiered Internet access (a logical starting point) uses policies to define different service throughput rates, prioritize how each service level's traffic will be treated by the router, and charge a premium for higher-tiered services. These services can be offered to all subscribers on the network or to limited subsets if desired.

The next step is to create content-based services that capitalize on policies' traffic shaping capabilities. Applications that include streaming media or large file transfers require different types of quality of service.

MSOs can implement policies to deliver the quality of service for these applications by using varying classes of service, prioritization or bandwidth. Operators also can create policy-based service definitions to customize and assign policies to specific types of traffic, certain user groups or certain types of applications.

Subscribers who are willing to pay more for better performance or for priority treatment represent a significant new source of incremental revenue. So does offering a variety of content services. Giving subscribers more choice in what they can access and a say in the quality of their subscriber experience offers a more individualized user experience, builds customer loyalty and reduces churn.

As cable operator's transition from access providers to full-fledged IP-services providers, they will need to roll out new services as quickly and cost effectively as possible. MSOs require tools to ease the service creation process and the means to make these services available without costly operator intervention.

The ability to quickly build, adapt and augment policy-based services, and allow subscribers to activate them through a familiar, customizable portal page is an excellent, cost-effective way to make services available. Service creation and activation systems that communicate dynamically with policy-enabled routers to enforce the appropriate policies for a given service and track usage for billing purposes are available today.

BEST OF BOTH WORLDS

Moving to open access will pay off for cable operators on multiple fronts. By providing cable subscribers with the same freedom to choose an ISP that dial-up users enjoy, subscriber bases will increase and incremental recurring income streams can be generated from data services such as voice-over-cable, streaming audio, distance learning and online gaming, both in-house and from a range of third party service and content providers. Making enhanced services available in a manner that simplifies service and subscriber management, and network configuration helps to hold down operational costs.

In short, savvy MSOs will take advantage of this tremendous open-access "opportunity" by creating a rich Internet experience that will reduce subscriber churn, increase revenue potential through third party partnerships and value-add services, while minimizing their operational expenses.

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