8x8 Leapfrogs IP Phone, Adds Video

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Never mind the fact that equipment for making
Internet-protocol phone calls over cable is embryonic, at best. A Santa Clara,
Calif.-based vendor already has a new twist: video IP telephony.

The company, 8x8 Inc. -- which already owns a 90 percent
silicon-component share of the dial-up videoconferencing-equipment market -- said last
week that it will issue a family of video-IP-telephony products, ranging in price from
$300 to $600, by the first quarter of next year.

Several cable operators said last week that they're
familiar with 8x8's work, and that they view it as an encouraging development that
still needs some work, but that definitely fits well into the coming broadband-IP-service
mix.

Dubbed "ViaIP," mirroring its retail
"ViaTV" brand for dial-up videophones, 8x8's gear is already undergoing
tests at TCI.NET, the high-speed-data arm of Tele-Communications Inc.

The equipment, which currently works over cable modems
manufactured by Com21 Inc., was used in a briefing two weeks ago by TCI executives to
AT&T Corp. chairman and CEO Mike Armstrong and his entourage, sources close to the MSO
said.

It is that kind of validation -- the largest long-distance
carrier acquiring TCI -- that companies like 8x8 are banking on, said Michael Noonen, vice
president of business development for the 10-year-old company.

"What we're all about is the redefinition of
telephony, because broadband networks mean that we're not bandwidth-limited
anymore," Noonen said, describing cable as the solution to the often herky-jerky
videoconferencing environment, which uses existing, bandwidth-limited telephone lines.

Also, because AT&T and TCI will likely deploy more
readily available HFC (hybrid fiber-coaxial) telephony gear over the next 18 months, as
packet-based solutions progress beyond prototypes, 8x8 hopes that its video adjunct will
give it a unique advantage over other, IP-voice-only vendors, Noonen said.

"We had to be able to do IP voice before we could add
video," added Noonen, who spent part of his career at AT&T developing its
original videophone system.

Buck Gee, vice president of marketing for Com21, said the
two vendors started working together a few months ago, and tests have not yet moved out of
laboratories at either office. "It's not something that I want to overhype, but
it falls into the category of being a great service for cable," he said.

The broadband-videophone prototype developed by 8x8 uses a
standard TV to display 30 frames per second of video at VHS quality, and a touch-tone
telephone for dialing and control. Inside the device is 8x8's VCP processor, which
runs software based on the H.323 videoconferencing language, using IP.

The ViaIP system includes a built-in 10baseT Ethernet
interface, which is necessary to connect to Com21's or other cable modems.

Noonen said the system works better when using later
versions of the cable-modem standard known as DOCSIS (Data Over Cable
Service/Interoperability Specification), such as version 1.1 or higher. Those versions
include more "quality-of-service" (QOS) features, which are necessary to set up
interrupted chunks of bandwidth between the home device and the headend for telephone
calls.

In one example of a future IP or IP-video scenario, an
adapter fits between the incoming cable line and the collection point for all of the
telephone wires in the home. That adapter connects to a gateway, located at a cable
office, that assigns IP addresses for calls and manages call distribution.

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