Cox Communications Inc. last week signed Nortel Networks Corp. and Nuera Communications Inc. to supply gear that would help the MSO handle some of its customers' long-distance telephone calls on its own Internet-protocol network.
The net result could be millions of dollars in yearly savings, the MSO figured.
Cox said 750,000 telephony customers make and receive more than 24 million calls each day. Some 75% of all Cox users also buy long-distance calling services from the MSO.
The company analyzed those calls and found that a full 20% were originating from or terminating with a Cox subscriber, according to MSO vice president of telephone and data engineering Jay Rolls.
Rolls said the company looked at its options and made this determination: "We should look at this like building a house, where you build the foundation, and build it layer by layer. The easiest way to get into [voice-over-IP] that is well understood is doing long-haul voice transport. Lots of long distance calls are being handled in the IP format.
"We buy bulk long-distance capacity from three different providers," Rolls added. But switching the Cox-to-Cox calls to the MSO's own network would save millions of dollars.
"We have the IP backbone," through long-haul fiber lease agreements with AT&T Corp., Level 3 and WilTel, said Rolls.
The next steps were the software switch and media-gateway elements.
"It was a pretty quick design, procurement and rollout process," he said. Cox was already using Nortel's DMS circuit switches for its residential phone service. It deployed Nortel's Succession Communication Server 2000 superclass softswitch in San Diego several months ago.
Nuera supplied Cox with its Orca GX-21 and GX-8 carrier class VoIP media gateways for each of the MSO's 10 telephony markets.
"The Nortel soft-switch component does the call-management aspect and trunking," he said. The gateways transfer calls from IP to time-division multiplexing in the origination city, then back to IP in the termination city.
Nortel said the soft switch meets the criteria of circuit-to-packet migration, including PacketCable-based cable access, tandem and long distance capability in a single platform, full sets of business and residential telephony service, lawful intercept and number portability, as well as carrier-grade reliability and scalability.
Cox handles a fair amount of long-distance traffic between its San Diego, Orange County, Calif., and Phoenix systems, for instance, so the move to long-distance IP will produce some instant cost savings.
The Cox-subscriber-to-Cox-subscriber effort is just phase one of this initiative. In phase two, Cox will be able to hand off calls to non-Cox markets because of peering agreements with its current backbone providers, Rolls said.
Once that is layered in, about half of all of Cox's long distance calls will remain on an IP network, Rolls said, saving the company even more money. All that's needed are similar Nuera-type gateways for those markets.
Cable operators have held some discussions about creating peering agreements for VoIP calls between their backbones, but Rolls said it will take a while for that to become reality.