Cisco, AT&T, GI Team Up on Integration

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Las Vegas -- AT&T Corp., General Instrument Corp. and
Cisco Systems Inc. will team up to develop an integrated cable data, voice and video
broadband-delivery system, to be tested by year's end and brought to market in 2000,
the companies said last week.

The terms of the nonexclusive agreement had not been
finalized, but the deal marked the first major commitment by a U.S. cable entity (assuming
that the merger of AT&T and Tele-Communications Inc. goes through) to test an
end-to-end, Internet-protocol-based broadband system involving voice, data and video
services.

Late last year, two Canadian MSOs -- Le Groupe Vidéotron
Itée and Cogeco Cable Canada Inc. -- went even further, saying that they would use
Cisco's technology to bring such an integrated-service platform to market by
year's end.

Senior cable engineers have expressed skepticism about the
ability of the Canadian companies to meet such an aggressive timetable.

But Cisco is moving quickly on several fronts to seed the
market with some of the technologies that it has contributed to the standards forming the
core of the IP-broadband platform. These include the underlying protocols used in a new
generation of IP routers and in centralized management of IP-voice devices in the home and
office.

"We're in a position as a provider of
backbone-infrastructure technology to bring the disparate pieces together to create a
broadband platform in the home, whether the service provider is using cable or DSL
[digital-subscriber-line] technology," said Keith Fox, vice president of corporate
worldwide marketing at Cisco.

"This way, manufacturers of consumer equipment can
integrate their products into the network without having to develop the technology
themselves," Fox added.

The company said it had formed a coalition of more than 30
partners aimed at speeding the delivery of broadband services to the home. Some of the
more prominent participants in the coalition include Bell Atlantic Corp., GTE Corp.,
Hitachi Ltd., Matsushita Consumer Electronics, MCI WorldCom, MediaOne Group Inc., Samsung
Telecommunications America Inc., Sony Corp., Sprint Corp. and U S West.

These developments took center stage at the Consumer
Electronics Show here last week, where the role of the cable industry was prominently
recognized as the key to manufacturers' and retailers' ability to exploit the
sales potential of devices tied to the broadband platform. These range from digital TVs to
low-cost personal computers to gizmos of every description.

When it comes to digital TV, the "cable
industry's commitment is even more critical" than that of broadcasters, said
Howard Stringer, chairman and CEO of Sony Corp. of America.

"As the primary pipeline for the new services and
interactivity enabled by DTV, cable will largely determine their success or failure,"
Stringer said. "The industry's rapid upgrade of infrastructure -- almost an $8
billion investment thus far -- has been one of the most important catalysts for developing
new services."

The need for cable to establish a means of interconnecting
networked devices inside the home is nearly as important as completing the build-out of
two-way HFC (hybrid fiber-coaxial) networks and high-speed-data backbones, Stringer noted.

"Whether wired or wireless, your home network will be
the platform for dozens of consumer devices coexisting within the home -- set-top boxes,
smart phone, a whole new class of devices designed for what Sony calls the coming era of
intimate computing," he said.

Stringer urged the industry to get behind the Home
Audio-Video Interoperability (HAVi) architecture, which is based on the IEEE 1394
data-over-twisted-pair-wiring standard, as a means of interconnecting household devices.
HAVi -- one of several approaches backed by various coalitions -- is supported by seven
major consumer-electronics manufacturers.

However they are linked, the devices must be easy to
manage, which is a primary goal of the agreement reached by AT&T, GI and Cisco. The
integration of GI modems, IP-telephony devices and set-tops will be based on GI's
Broadband Telephony Interface, officials said.

The agreement also provides for the use of Cisco's
Gigabit Switch Routers in the AT&T network backbone and in the firm's headend
Universal Broadband Router.

All of the pieces in the end-to-end AT&T platform are
based on the data, voice and set-top standards emerging through various task forces
established by the members of Cable Television Laboratories Inc.

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