AT&T Eyes Business Apps With IP-Telephony Push

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AT&T Broadband & Internet Services is preparing to
launch what promises to be the first use of Internet-protocol voice capabilities over
cable with a focus on business applications that don't require the full scope of
residential first-line service.

The carrier is in negotiations with a large, unnamed
company in preparations for testing the use of virtual call-center technology developed at
AT&T Laboratories over cable links, said Roy Weber, vice president for
intelligent-network-services research at AT&T Labs.

The cable component of the service -- which can also be
supplied over two standard telephone lines -- will employ a new plug-in IP/analog
voice-conversion card now in alpha-testing by Com21 Inc. in conjunction with the use of
that vendor's cable modems, he said.

"Given that there are now these new high-quality cable
modems and the ability to deliver voice over Internet connections, the whole notion of how
and where people work is going to change," Weber said.

"The same technology we're applying in the
virtual-call-center solution can be used to support any number of remote office services
that allow people to work from home, while accessing all of the voice and data functions
they're accustomed to at the office," he added.

Com21's "ComUNITY" modem system uses ATM
(asynchronous transfer mode) technology to support the quality of service required for
toll-quality voice and other priority applications.

It's the only system currently on the market that AT&T
has found to be useful for the call-center application over cable, Weber said.

"We haven't reached any contractual agreements for use
of the modem in trials or commercially, because we're still in negotiations with the
customer," he added. "But we're using the Com21 modems for demos like the one
we'll be conducting at the National Show [this week] in Chicago."

AT&T's virtual-call-center solution allows companies to
station their call-center representatives -- the people who answer 800-number calls -- at
home or in other remote locations separate from the main office without changing the way
their systems work, Weber said.

This means the reps access the same on-screen information
at their personal computers and connect over the same intraoffice phone links that they
would use at the office, with the means of call-control monitoring by supervisors and
other interactions between reps and supervisors kept intact.

The key to making the Com21 modems useful for the voice
side of this application is a new "daughter card" the company has developed for
insertion in slots that have been built into the modems since April 1997, Com21 president
and CEO Bill Fenner said. "The card does all of the translation between analog voice
and IP," he added.

While Com21's approach to cable modems has long focused on
the business opportunities that cable operators would have if high-speed-access systems
could deliver QOS guarantees, the industry has largely been focused on building a
contention-based consumer Internet-access business, where QOS was not key to success.

"One of the reasons why we've wanted to work with
AT&T for so long is that they have a business-service organization that is
well-positioned to exploit these types of capabilities," Fenner said.

While the cable industry has begun to focus on QOS in
conjunction with voice-over-IP in the development of version 1.1 of the DOCSIS (Data Over
Cable Service Interface Specification) standard, most of the strategic attention has been
on making it possible to offer first-line residential service.

But gains in IP-voice technology outside of cable have put
cable in a position to seize the initiative in the growing market for telecommuting and
other business applications, where the integration of voice and data with office-based
LANs (local-area networks) and PBXs (private-branch exchanges) is a major goal, without
waiting for all of the issues surrounding residential first-line IP voice to be resolved.

"The real question is who's going to be the first to
move aggressively into this space, because the demand and the means of meeting it are now
in sight," Fenner said.

Corporate interest in such capabilities has emerged as a
major spur to the providers of digital-subscriber-line services, prompting that sector to
work on standardized approaches to voice over DSL, where the ATM component of that
technology is well-suited to providing an integrated voice and data solution.

A number of vendors are now supplying proprietary solutions
in response to the growing market demand, allowing Internet-service providers and
competitive local-exchange carriers to move ahead with such services without waiting for
standards to develop.

Com21 -- which is participating in the authoring team
within Cable Television Laboratories Inc.'s PacketCable initiative -- will introduce 1.1
modems in early 2000, including units with voice-card slots, Fenner said.

But it will take a while before virtual LAN connectivity --
which is intrinsic to call-center and other telecommuting applications -- becomes possible
over 1.1 modems, he added.

AT&T has chosen the call-center application as an
especially ripe target for implementing the integrated voice and data capabilities of its
technology with the cable connection, Weber said.

"Companies are looking for ways to accommodate the
explosion in calling volume," he added, noting that 40 percent of the calls handled
by AT&T are now 800-number calls.

"I don't think I've talked with a single provider of
call centers who isn't trying to figure out how to do this," Weber said.
"Opening up the option for people to work at home allows companies broader access to
skilled people, including the handicapped."

The AT&T virtual-call system, employing proprietary
technology developed by Weber's group, allows the call rep to plug a standard telephone
into the Com21 modem port and to conduct business by voice and on-screen, with all of the
functionalities of the office phone system preserved through a "soft phone"
display that agents can click on via their PCs, Weber said.

"Our system also allows the automatic call distributor
to direct incoming calls to the next available agent, whether the agent is at the office
or in a remote location," he added.