Technology’s Creative Master

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Time Warner Cable chief technology officer Mike LaJoie is a longtime veteran of the MSO, and he’s currently responsible for providing the underlying technology to launch video-on-demand, HDTV, digital video recorders and the new voice-over-Internet protocol telephony service. In this Q&A with Broadband Week editor Matt Stump, LaJoie looks at how the stepping stones of the past have led to the path on which Time Warner treads today. An edited transcript follows.

MCN: What are the embers of the Full Service Network that are alive and well today — that have borne fruit?

MIKE LaJOIE: If you think about how technology advancement is made and how we actually productize new technology development, the FSN is a very interesting example. We put together a very, very aggressive network for the time. It was an all-digital network. It had switching in it. And for whatever reason, it was viewed as a misstep. From a technology perspective, it was anything but that.

Orlando was the first place that we ever did hybrid fiber-coax, which became the underpinning for the entire cable industry. The value of HFC has been proven time and time again — its flexibility, its extensibility. That architecture allows us to do all kinds of things.

In addition to that, it was the first place we did digital television and MPEG (Moving Picture Experts Group). We proved that it worked.

We bought a lab encoder out of C-Cube [Microsystems Inc.]. That was the first place we did compressed MPEG over HFC.

That was also the first place we did TCP/IP [transmission-control protocol/Internet protocol] over HFC, and out of that came high-speed data. It was the first place we did large-scale video on demand.

When you consider this spawned billions of dollars a year in new revenue, I don’t know how you can see the investment that we made there and consider that a misstep.

That’s what innovation is about. What we were trying to do down there was to do things like interactive TV, and do VOD. The things that really came out of it were things like high-speed data. We weren’t even looking at that.

Oftentimes, when you strike out on an innovative trail you learn things you don’t expect. And the real value that you find isn’t what you were looking for.

MCN: How do you, today, get your arms around any of the new technology? How do you decide what to pursue, test and implement?

LaJOIE: You take a couple of different approaches. One approach is that you maybe just wait for things to happen. Another is that there can be a method to creativity, a discipline around innovation. That requires a certain approach to things, a structured approach of, how do you innovate? How do you come up with good ideas? How do you decide what should happen and where?

Part of that comes from the commitment from senior management to allow creativity to happen, to provide an environment where innovation can occur.

On a regular basis, we have brainstorming sessions where we look at and evaluate new technologies and new ideas, whether they are occurring outside the company or within the company. And we vet them.

A product that got panned in focus groups was the VCR. That was never expected to take off the way that it did. Oftentimes, it’s difficult without building a reasonable prototypical experience to know how customers are going to respond.

When we were first thinking about VOD, we were thinking about it as much, much better PPV. And we found out that consumers really respond to it on a subscription basis.

The reaction to movies on demand was pretty good. When we put HBO On Demand in front of customers, the response was phenomenal. The idea that really made it pay off was a subscription version.

So we’re constantly looking for things like that. We foster an environment at Time Warner that encourages new ideas and innovation.

MCN: The thing that’s striking about Time Warner over the past three or four years is how and why you got out in front on so many things — you were early with VOD, SVOD, HDTV and DVRs. What was that like from the technology side, getting all that up and running?

LaJOIE: It’s challenging. But by the same token, if you approach things from a practical perspective, and if you identify those things that are critical, you put the institutional will behind getting something done. This is a large organization with very competent people. We have a lot of resources and the trick is to focus the effort.

From a technology-development perspective, we kind of have a secret weapon.

MCN: Which is?

LaJOIE: Mike Hayashi. I’m not kidding. Mike has a clarity about technology and about what’s developing out there. And he has the support of senior management here to explore those ideas and go make them happen.

Mike is the one that really stumped for digital television. That was his baby, and he really pushed hard to have the specifications developed and to have the relationships with Scientific-Atlanta [Inc.] extended and make that push. High-speed data was something that originally came out of his shop.

When you combine that kind of vision with the no-nonsense business sense of a [chairman and CEO] Glenn Britt, and a [executive vice president of business development] Carl Rosetti and others around here. … They have a real clear sense of what products might work and which ones we should stay away from.

It’s a combination of acute vision on new technology opportunities and the corporate will and good product sense. You bring all that together, and you can make very interesting things happen.

MCN: How do you choose the systems you do for new-product rollouts — Portland, Maine; Austin, Texas; Columbia, S.C.; Honolulu, etc.?

LaJOIE: There are some systems that we have that, over time, have built a staff of folk that are better suited to trying new things — that are able to do it without interrupting the success of the blocking and tackling they have to pursue on a day-to-day basis. Those people rise to the top, and you see that that organization is better suited than some others.

Part of it has to do with just the markets that they work in. Some markets are better suited for new kinds of technology. Austin (Texas), for instance, is a college town. There is a lot of technology in that town. There’s a different mix of customers there, who are maybe a little bit more open to new ideas.

MCN: How did Columbia, S.C., get picked for SVOD?

LaJOIE: Columbia got picked for SVOD based on number of scenarios. First, they are a very well-run division. But also, the way that it’s laid out, it’s made up of three separate systems. And so we could try it in a smaller system, where we could test and see how things could work, without impacting large-scale customers. It’s a good representative market for how people might react.

MCN: And Portland?

LaJOIE: Portland is an interesting division. It’s a relatively small division, but they are very deeply penetrated. Over time, they’ve built up a great relationship with their customer base, and they have a very astute staff. They’ve been together for a long time, and they have an appetite for new things.

MCN: Do you get volunteers? Do you get people calling and saying they want to try X, Y or Z?

LaJOIE: Yes. And sometimes we have guys that just go do stuff. That’s actually a good thing, the way we are decentralized. Rather than try to control these types of things and keep a tight rein on folks, good ideas come from all directions.

We’re interested in people’s ideas out in the field. They are closest to the customers and they are also closest to the realities of operating a cable system. And a lot of good ideas come from there.

MCN: What’s going on with the DOCSIS (Data Over Cable Service Interface Specification) 1.1 and 2.0 rollouts?

LaJOIE: We haven’t announced our plans with what we’re going to do with DOCSIS 2.0. We’re certainly out there with 1.1 everywhere.

The future of high-speed data is more policy-based. Today, the best example I can give you of a policy-based service is voice. So if you’re browsing the Web, or if you are receiving e-mail, it will be transparent to you if a few packets were dropped — they’ll get retransmitted automatically. Whether or not it took 15 milliseconds for some packet to reach, or 18 or 30, it’s transparent to you on a best-efforts browsing sort of basis.

For real-time services like voice, you definitely want to be able to ensure those packets get to customers, to make the experience really valuable. More and more, you’ll see us introducing policy-based services.

IP brings you a host of features that creates so much flexibility. If you can put in place a policy-based, quality-of-service network, you can do a lot of very, very interesting things over IP. Whether you are serving the desktop, or you end up serving the set-top or some combination thereof, it is more readily enabled by IP switching than broadcast, for sure.

MCN: Where do you stand on all-digital, digital-simulcast and the all-IP network? What’s your thinking these days?

LaJOIE: Eventually, we’d like to get to all digital. At some point, we may not modulate any analog television signals at all. That’s quite a ways out there, but it’s going to happen.

The question is: How do you accommodate that eventuality? The answer lies in a stepped transition. One step along the way is simulcast the channels you are doing in analog now in digital. Once you start doing it in digital, you can start taking advantage of all the other things [that] digital offers you. That includes getting away from just digital broadcast, so getting into switching services.

MCN: Will you do any simulcasting this year, or more like 2005?

LAJOIE: Yeah, I think you’ll start seeing some stuff in ’05.

MCN: Are you running out of bandwidth?

LAJOIE: There is a difference between bandwidth and spectrum. Spectrum is a finite thing, and it’s precious; it’s scarce. There is only so much that we have available to us. We have 750 MHz of spectrum, and it is scarce. And the reason why it is scarce is because it is expensive.

Having said that, the way that we have implemented using that spectrum is that we can basically manufacture bandwidth. If you choose to use all of your spectrum for broadcast, then you run into limiting factors pretty quickly, because there’s really no efficiency there. Whether people are consuming the product or not, it’s there and it’s using your spectrum.

If, on the other hand, you use a switch, you can segment your network into fine pieces — 500-home nodes. You can get 5½ Gigabits per second of content in 750 MHz of spectrum that we have.

And if I choose to switch everything, I can provide that much bandwidth to 500 homes passed. That ends up being quite a bit of bandwidth when you take a look at the average use of television and how many homes watch similar things. I could have a dedicated pipe to every single home where they could be browsing on the Web, watching five or six standard definition, high-definition channels, and each one of them unique. If I switch, the amount of content I can put across my network is unlimited. I can have thousands and thousands of different programming sources, because I can segment my network. That’s the beauty of HFC.

If I broadcast everything, I’m limited to how many signals I can modulate in that path that is available to everyone whether they want to watch it or not.

Bandwidth we can manufacture through segmentation.

MCN: I can see you making an announcement a year from now where you are testing X amount of analog channels, X amount of digital channels and X amount of content available through switched broadcast.

LaJOIE: Absolutely. That’s the plan. As I go towards more all-digital, we’ve already determined that switching is more efficient than broadcast. We know that I can put more channels in digital than I can in analog with compression. The more I can migrate to digital, the more I can migrate towards switched and away from broadcast, the more efficient the use of my spectrum will be.

MCN: What favorite toys have you seen lately?

LaJOIE: I like those portable video players. I think mobility is going to continue to be on the rise. It’s obvious that customers like to get products where they are, not necessarily where they live. Those video pods are very interesting to me. Wireless, in general, is very interesting to me. Data, voice, video. When you think about how our plant works, we have fiber penetrated mostly to the home. We have active devices to 500-home groupings.

The notion of maybe at some point pushing radios out there on those active devices and having a wireless infrastructure is something interesting to think about.

I like a number of the new products that combine different kinds of features together. One of the things you’ll see us come out here with pretty soon is a caller-ID application that runs on the TV set.

MCN: What’s your greatest accomplishment?

LaJOIE: Wow. That is a hard question to answer. I guess what it would be, we set out to launch VOD everywhere, and that was something I did with a very small staff across the entire company. We basically rolled it out everywhere in 10 months, and it worked. I’m pretty proud of that accomplishment, but it really isn’t proper for me to take credit for things like that. It’s not me that does these things. It’s the organization. We have this can-do attitude around this company that makes anything possible.

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