Sprint Not Chasing Cable Partners

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Sprint Corp., which is on the verge of launching its first
commercial services over new broadband networks, has opted out of the race for cable
alliances, at least for the time being.

Sprint CEO William Esrey continues to view cable access as
a potential option for deployment of services over ION (Interactive On-Demand Network),
the company's local broadband-access platform. But he's taking a wait-and-see
posture with respect to just how cable will fit into the grand scheme, ION spokesman Russ
Robinson said.

"We haven't been dealing with cable
companies," Robinson said. "DSL [digital subscriber line] is still our primary
strategy."

In July, Esrey -- stressing the compatibility of cable
modems with ION as "a plus not only for Sprint and cable companies, but also for
consumers" -- said the company hoped to have access through cable, as well as DSL,
and that it might seek cable partners to accomplish its goals.

But at the same time, Esrey called on the Federal
Communications Commission to open cable networks to all providers. He contended that
AT&T Corp.'s presence as a cable player, through its proposed acquisition of
Tele-Communications Inc., "would hurt competition, unless the combined company is
required to offer unbundled access to the cable loop."

Robinson didn't rule out eventually pursuing talks
with cable once Sprint begins rolling out ION to consumers in the second half of 1999.
"We'll look at negotiating with cable companies at that point," he said.

But the negotiations that Sprint might have in mind could
be more like the type that it is having with telcos, which, under the Telecommunications
Act of 1996, are forced to unbundle their loops and to make their switches and other
facilities available for colocation of competitors' facilities.

"We're not in the same boat as AT&T, where we
would have to have cable partners to make our broadband strategy work," Robinson
said.

Such an eventuality is a source of concern about the impact
of the AT&T/TCI deal, noted Bear Stearns & Co. Inc. analyst Oren Cohen.
AT&T's presence "is definitely going to open up the issue," Cohen said,
adding that the industry has to weigh whether AT&T's support for infrastructure
expansion "offsets the negatives" of a potential unbundling.

Sprint is close to announcing the launch of its first
commercial ION services, which have been in beta trials with a handful of corporate
customers, Robinson said. The company is discovering that with big companies, it must work
out "different configurations" of the ION architecture to meet specific service
requirements, which has helped the company to refine its design strategies.

"It's like when you make soup and you don't
like how it tastes, but you can't identify which ingredients need to be
changed," Robinson said. "These individual service iterations allow us to find
out which pieces need to be adjusted."

It has also taken longer than anticipated for Sprint's
key suppliers -- Cisco Systems Inc. and Bell Communications Research (Bellcore) -- to work
out the intelligent-networking system that will allow Sprint to integrate its IP-based
(Internet protocol) voice and data services with its and other public service
providers' switched-infrastructure resources.

Cisco and Bellcore had expected to be able to use the
protocols contained in the H.323 IP-telecommunications standard to import the Signaling
System 7 and other IN features of the switched networks into the IP call-control domain.
But the companies discovered that a new protocol was needed to support the market scale
that Sprint has in mind.

"That caused a little ripple, but we're still
pretty close to schedule," Robinson said.

Cisco and Bellcore last month introduced their new IN
solution, based on their jointly developed protocol, SGCP (single-gateway-control
protocol), which is also close to being adopted as part of the emerging IP-telephony
specifications within the PacketCable group.

Cable's choice of the same IN architecture would make
it much easier for Sprint to exploit cable-access facilities, either as a partner or as a
user under any new open-network regulations that might be imposed by the FCC.

Cisco has taken another step toward supporting the type of
integrated voice, data and video network envisioned by Sprint, AT&T and other new
players in broadband access by partnering with Hewlett-Packard Co. in the development of
what are known as "OpenCall Multiservice Controllers" for IP networks.

The alliance combines H-P's well-established OpenCall
IN development platform for the PSTN (public switched telephone network) with Cisco's
IP-network-management system, which is being refined to incorporate the innovations
developed with Bellcore.

The three-way alliance picked up new momentum last week
with an agreement by Lucent Technologies' elemedia unit to integrate the OpenCall
platform with its H.323 gatekeepers and gateways. These are the servers used to manage
calls within the IP cloud and to direct their interconnections with points on the PSTN.

"With OpenCall integrated into our gatekeepers, people
can take their pick of approaches to building IN applications, going beyond what's
available from the PSTN IN infrastructure," said Kalpana Sheth, director of marketing
communications at elemedia.

While elemedia remains committed to the H.323 approach to
porting PSTN IN functionality into the IP domain, it is open to any changes, such as use
of the SGCP protocol, that the carrier community might require as these issues are worked
out in the standards debates and market arenas, Sheth said.

Although SGCP represents a departure from H.323 in call
control within the IP cloud, it does not replace other key aspects of H.323, such as the
approaches to encoding and decoding and to handoffs between the PSTN and the IP networks
at gateway servers.

All of these developments -- combined with the
implementation of deregulation with regard to wide-scale interconnection of
competitors' ADSL facilities and their use of unbundled loops -- have put Sprint on a
fast track toward moving into the consumer market, with or without cable, Robinson said.

"We're very pleased at the way that the
fundamental strategy that we first articulated is coming together," he added.

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