March 1995 -- Volume 7 Number 2
Contents:
The executives analyzed a set of CableLabs-developed models linking different network architectures with the deployment of NVOD, telephony, high-speed data services, videotelephony, and teleaction services.
Voice telephony, high-speed data and other, new, revenue-generating services tied to digital video compression technologies (i.e., NVOD, one-way games, etc) provoked the greatest discussions, said Scott Bachman, CableLabs vice president for technical operations projects. Bachman organized the Convergence conference.
Entering the Marketplace
Cable operators are pursuing wireless and wireline strategies in the move toward entering the telecom marketplace. With the wireline strategy, said Bachman, "clearly the first gating function is to engineer and design your upstream path - building fiber nodes, turning on your upstream plant, making sure the system you picked will work robustly on the upstream path." Powering, number of homes served per node, and choice among modulation schemes are also major issues, he added.
The consortium formed between Sprint and MSOs TCI, Cox and Comcast is serious about a wireless strategy - to the tune of almost $2.2 billion in bids for PCS licenses, Bachman noted. With the wireless approach, where activating upstream distribution plant isn't a prerequisite, a key success factor instead is whether standards will emerge from competing PCS technologies, especially TDMA versus CDMA schemes, in time for products to be shipping in quantity when MSOs need them, Bachman said.
Cable operators are gearing up to provide high-speed data services in the near term while realizing they face telephony deployment from a long-term perspective. "Computer users seem to be screaming for faster connectivity," said Bachman. "Whatever speed gets into the marketplace, it's never fast enough."
CableLabs, in fact, plans soon to issue a Request for Proposals (RFP) seeking more detailed vendor information about two-way, high-speed data modems to supplement data acquired already through last year's telecom RFP.
Some in cable also are bullish on a hybrid asymmetrical approach - a cable downstream, telco upstream "evolutionary model" which allows cable operators to go after a market not being addressed today. "This leaves plenty of room to maneuver through short-term market needs evolving to higher data rates supported by cable return plant activation," said Bachman, who was the conference leader at Santa Barbara.
The conference began with a keynote speech by NCTA President and CEO Decker Anstrom. Any bid to spur telecommunications competition must include rate relief for cable, Anstrom said. He said NCTA is seeking four provisions in legislation: (1) Eliminate state and local barriers to competition. (2) Require that telephone companies meet certain conditions that are prerequisite to competiton. (3) Allow for mergers and joint ventures. (4) Prevent cities from blocking competitive communications services.
Full Service Network
Also on the conference's first day, CableLabs' David Reed and consultant Leland Johnson discussed aspects of the full service network concept; Brenda Fox, partner with Dow, Lohnes & Albertson in Washington, presented a regulatory review; and Pete Gatseos, of TCI, reviewed some consumer research.
The second day included presentations in the area of network migration to telephony services, and speakers were: Craig Owens of CableLabs, Bruce Crair of Cox Cable Communications; Chris Barnhouse of Time Warner Communications; and Ken Hoguta of TCI Technologies. High-speed data options also were explored by Dr. Mario Vecchi of Time Warner Cable, William Biedron of Continental Cablevision, and Martin Weiss of Cox Cable Communications. PCS issues were addressed by CableLabs' Reed, and the day concluded with a review of near video on demand by Jim Chiddix of Time Warner Cable, Alex Best of Cox Cable Communications, Bob Cruickshank of CableLabs, Nick Hamilton-Piercy of Rogers Cablesystems, and Charles Kennemer of TCI.
The third day involved discussion of network operations issues in a digital broadband environment and presentations were given by Nick Worth, formerly of TeleCable; Paul Schauer of Jones Intercable, Tony Werner of TCI and Cathy McDonald of Rogers Cablesystems.
Case Study
Attendees then tackled a case study, developed by CableLabs and representatives of member companies along with consultants Dr. Ron Rizzuto of the University of Denver and Brad Johnston of Johnston & Associates.
The breakout sessions on the case study were synthesized to start the final day. Following that, there were a series of presentations denoting various migration plans by Curt Hockemeier of Teleport Communications Group and Stephen Pearse of Time Warner Communications. Kay Monigold of Buford Television provided a perspective from operators of smaller cable systems.
An MPEG-related licensing entity will be formed to provide efficient access to intellectual property rights (IPR) necessary for the implementation of MPEG technology worldwide.
This endeavor should result in widespread, nondiscriminatory and reasonable patent rights licensing of the core digital compression technology for conventional-resolution television involved in MPEG. The process has not yet addressed royalty issues for higher-resolution pictures, such as HDTV. MPEG stands for Moving Pictures Experts Group.
The announcement follows a March 23 MPEG IPR group meeting held in conjunction with an MPEG meeting in Lausanne, Switzerland, March 20-24, 1995, attended by representatives of more than 50 companies that manufacture and use digital compression technology.
Baryn S. Futa, CableLabs executive vice president and chief operating officer, reported on the progress made by the Working Group established to deal with the actual issues of creation of a licensing entity. Futa serves as the chairman of the MPEG IPR Group which, in the course of its work, addressed issues such as: (1) How to identify which patent holders were willing to participate in this effort. (2) Whether they own rights necessary for implementation of MPEG core technology. (3) Establishing the entity's administrative structure as an ongoing effort that works with new licensees and licensers, the licensing structure, and the allocation of royalties.
Conclusions Announced
As such, the Working Group at the Lausanne meeting identified several "first order" issues and announced its initial conclusions on each one. The group arrived at an initial conclusion on a model for paying royalties on MPEG-related products such as digital encoders; digital decoders, including settop boxes; digital videodisk (DVD) players; and prerecorded storage media such as video CDs, DVDs, and prerecorded magnetic media.
The initial conclusion is that there would be a $3 to $4 (U.S.) royalty paid on each digital decoder, including MPEG-2 settop boxes and DVD players, and a fraction of that dollar amount paid as royalty on each video CD or DVD, for example. There are different amounts set for rental product versus purchased product. (For a detailed treatment of the royalty model, please see the accompanying annex entitled "Details of Lausanne meeting.")
The MPEG IPR Group began developing this plan in September 1993. Said Futa: "I hope that all companies and individuals worldwide who believe that they have important patent rights for MPEG core technology will join our effort to make MPEG a reality" Futa said.The IPR Issue
The convergence which MPEG fosters provides a clear path to worldwide interoperability, and serves to open the marketplace to multiple vendors. This technical achievement has resulted in MPEG core technology that includes many different patents from many different companies and individuals worldwide.
"Unless a creative way is found to provide easy, reasonable, fair and nondiscriminatory access to such patents rights, the goal of a worldwide digital television standard may be jeopardized by the difficulty of clearing access to all the necessary patents," Futa said.
Licensing Entity
Since MPEG sets technical standards and does not, per se, deal with intellectual property rights, there has been a consensus for some time within some of the key companies participating in the MPEG process that patent rights clearances would be an issue, Futa noted. They believed that an effort should be started to explore the possibility of establishing a licensing entity to make access to the necessary rights easy and that such access be available on reasonable, fair, and nondiscriminatory terms.
The MPEG IPR Working Group results, which were presented at the Lausanne meeting, are as follows below. Consensus was obtained within the Group as to what issues were "first order" as well as a consensus determination to be set as a "target" for the licensing entity on these issues. Work remains to refine the initial conclusions on these issues including further work on the royalty for encoders, enforcement of patent rights, refinement based upon further input, as well as other issues.
(1) Technology to be Licensed
This shall include issued patents, the application(s) for which were filed on or before November 13, 1994, that are essential to the "licensed technology." "Essential" is defined, in the context of main profile @ main level, as well as for a given legal jurisdiction of patent authority, as:
The determinations will be made by independent experts for each patent jurisdiction to be covered by the licensing entity. When appropriate, all such experts will participate in the determination(s).
(2) Availability of Licensed Technology
Any party can seek access to the licensing entity's licensed technology. (Rights granted to and by the licensing entity will be on a nonexclusive basis.) The same royalty structure will be applied to all parties, including licensers to the licensing entity. The entire portfolio of patent access that the licensing entity maintains as licensed technology will be available to all licensees on a unified offering basis. The licensing entity will not differentiate among licensees based upon access to only certain patents or based upon certain jurisdictions.
(3) Royalty Model
The Group has discussed and has reached consensus on targeting a $3 to $4 (U.S.) royalty on each digital decoder, including MPEG-2 settop boxes, digital videodisk (DVD) players, and decode-for-general-purpose processors. Using that target and based upon the model discussed below, that would result in a $0.03 to $0.04 (U.S.) royalty on each video CD or DVD that would be purchased. Also, there would be a $0.30 to $0.40 (U.S.) royalty on each video CD or DVD that was for distribution use (i.e., rental market).
The royalty logic is as follows:
Discussion to continue at April 11 and 12, 1995, Working Group meeting. The relationship between the x and y is as follows:
Finally, the Working Group also has discussed and reached consensus on a method for royalty allocation.
(4) The Entity
The licensing entity will maintain "National Committee(s)" for each jurisdiction for which it holds licensing rights to patents to licensed technology. An "Administration Committee" will be appropriately constituted to include participation from each National Committee. Finally, a "Secretariat" will be established that will see to the day-to-day functioning of the entity. (Detailed backgrounder available upon request).
The advanced cable network of the future will need not just hardware, but also a robust form of network management known as distributed middleware CableLabs said in a presentation last month to one of the most influential groups of developers in the computer industry, the UniForum Association. Such software is essential to extended networks because it can route traffic intelligently, acting in response to changing loads, outages and other network conditions. The UniForum is made up of experts in Unix, a set of operating systems that allow code to be used by platforms of very different size. Many are active in a discipline called object-oriented programming. This method may be especially useful to the management of a cable network because it combines applications instructions with the information to be acted upon. Thus linked, these objects can be easily moved from one element of a network to another. Cable networks are sufficiently different from the information systems networks to which the Unix community is accustomed to constitute a dramatically different development environment. In addition, many Unix vendors have little internal understanding of the cable business, and how CableLabs members would use advanced, distributed cable networks. Both the cable industry and the Unix development community would gain a great deal by cooperative development of distributed middleware. Attendees were encouraged to contact CableLabs to learn more about its various technology transfer programs, and to ask for information which may guide their steps as they enter this new industry. The presentation was made by Donald Frazier, senior analyst/technology transfer.
Copyright © 1995 Cable Television Laboratories, Inc. All Rights Reserved.