Printer Friendly
The Free Library
22,728,043 articles and books

The telecom Triple Play: cable and telephone companies are stepping up to the plate to offer telephone (voice), cable television (video) and Internet (data) services--all from one provider. But will apartment owners score with residents or strike out swinging at cost and liability burdens?



Baseball is a blissfully simple event, easy to understand. Though it's endured much change over many decades. the fundamentals are the same throw, hit, catch, run--with bats still made of wood, gloves and balls of leather. Talking on the telephone and watching television were also once simple. But these have changed dramatically in just 10 years, with little left to simplicity or ease of understanding.

Telephone companies are no longer just telephone companies. Cable companies are no longer just cable companies. And the utility companies, well, some of these are changing, as well. Each is trying to make the "Triple Play," offering all three: telephone (voice), cable television (video) and Internet (data) services. Of course, this isn't the result of insatiable consumer demand to receive all three services from one company, as there is little evidence of such a demand. Instead, it's the result of consumers, including apartment owners and developers, being driven to this by a handful of the nation's largest cable television and telephone companies.

Nearly 10 years after passage of the 1996 Telecommunications Act--Congress' attempt to increase the number of service providers, reduce prices and increase choice the regretful re·gret·ful  
adj.
Full of regret; sorrowful or sorry.



re·gretful·ly adv.

re·gret
 result is fewer providers and higher prices. And now with their battleground largely cleared of hindering competitors, this handful of cable and phone industry giants is engaging in a modem day clash of the titans. Their weapons of choice are fiber optic networks. Unfortunately, this will leave many property owners, developers and residents in the crossfire A multi-GPU interface from ATI for connecting two ATI display adapters together for faster graphics rendering on one monitor. CrossFire machines require PCI Express slots, a CrossFire-enabled motherboard and, depending on which models are used, either a pair of ATI Radeon adapters or one  of seemingly unreasonable demands and confusion.

The Offense

Trying to wrestle residential customers from cable rivals, telephone companies, such as Southwestern Bell
For information on the holding company Southwestern Bell Corporation, later SBC Communications, Inc., and now AT&T Inc., see AT&T.


Southwestern Bell Telephone, L.P.
 (SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. ), Verizon and BellSouth, are rapidly expanding their fiber optic networks, though in completely different ways. And it is because of these networks they can have enough bandwidth to provide state-of-the-art cable, phone and high-speed Internet See broadband.  services.

"[Fiber] allows us to leapfrog today's U.S. telephone and cable TV networks," Lea Ann Champion, SBC Executive Vice President, said in a statement. But this is one serious game of leapfrog, where the stakes are high.

Slicing the Pie

A 2004 research report from DataCom News shows the total number of cable modem cable modem

Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet.
 and DSL DSL
 in full Digital Subscriber Line

Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary
 customers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  and Canada topped 32 million. Of that total, 64 percent access the Internet using cable modem service provided by their cable companies. Even with the cable companies' slow down in subscriber rate increases, this is nearly a two-to-one margin over the phone companies' DSL customers.

Adding insult to injury, cable companies are also now nibbling nibbling Nutrition The consumption of multiple–up to 17–'mini-meals' per day, as opposed to the usual 3 meals/day. Cf Bingeing, Gorging.  into the phone customer market with a service called voice over IP (VoIP), or digital voice service. So now, cable companies are rapidly expanding the service areas where they are providing a bundle of phone, cable and Internet services. Combined with their increasing stronghold on cable television customers with technologies and services, such as digital video, video-on-demand and digital video recorders See DVR.  (DVRs) installed in set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. , cable companies have come to pose a significant threat to the phone industry.

So, the Bells hunger to not only regain control of being the gateway for consumers to access the Internet, a control they lost long ago, but they are also trying to protect their core phone business. And while they were sitting at the drawing board developing strategies to accomplish these goals, they decided to mount this challenge by also pushing into the cable industry's territory, seeking to steal away Verb 1. steal away - leave furtively and stealthily; "The lecture was boring and many students slipped out when the instructor turned towards the blackboard"
slip away, sneak away, sneak off, sneak out
 cable television customers.

The Defense

Deploying billions of dollars worth of fiber optic networks, in some cases all the way into customers' homes, the Bells have decided what's good for the goose is good for the gander Gander, town (1991 pop. 10,339), NE Newfoundland, N.L., Canada. Gander's airport, an important base in World War II, is a hub for international flights; it also attracts many refugees. It was the site of a Dec. . While still maintaining a strong-hold on phone customers, they are also seeing an increase in subscribers for high-speed DSL Internet service. Other than by using fiber networks, they are developing and deploying technologies that make their Internet services faster and more robust.

But just as man cannot survive on bread and water alone, neither can phone companies survive on selling just phone and Internet services. Enter a digital television service called IPTV (Internet Protocol TV) Also called "TV over IP," IPTV delivers scheduled TV programs and video-on-demand (VOD) via the IP protocol and digital streaming techniques used to watch video on the Internet.  or Internet Protocol See Internet and TCP/IP.

(networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol.
 TV--the Bell companies' lethal weapon for competing with the cable industry

The Game Begins

For at least a decade, phone companies have been promising to rewire re·wire  
v. re·wired, re·wir·ing, re·wires

v.tr.
To provide with new wiring: rewired the old house.

v.intr.
To install new wiring.
 America with fiber optic networks. Now, with a romp of regulatory victories in hand, the regional Bells (Verizon, SBC and BellSouth) are moving full-speed ahead to accomplish this goal. However, this is admittedly an endeavor that may take several years to pay off for the big three. Some analysts wonder whether the companies can even afford the tens of billions of dollars they're spending to replace the copper in their networks. Further, the Bells will need to secure good enough terms on TV programming and lure customers away from the cable and satellite companies to justify the investment. But none of this has caused the Bells to falter in their efforts.

In September, Verizon announced taking orders for its new television service. Customers in Texas are the first to receive the service that includes more than 180 digital video and music channels, 20 high-definition channels and video-on-demand, all carried over fiber optic cables Noun 1. fiber optic cable - a cable made of optical fibers that can transmit large amounts of information at the speed of light
fibre optic cable

transmission line, cable, line - a conductor for transmitting electrical or optical signals or electric power
 that replace older copper lines. They plan on introducing the service in six other markets, including Florida, Virginia and California, soon. By the end of the year, it is estimated that 3 million single-family and multifamily homes will have the ability to order is service.

SBC, with a completely different network-building strategy, is accomplishing the same goal. This year SBC will deliver a triple play of television, data and voice services to customers under the name Project Lightspeed. To help it bring television service into its menu of services, SBC signed a 10-year, $400 million agreement with Microsoft. SBC expects to reach 18 million customers by the end of 2007.

And BellSouth is not to be left behind. It, too, is continuing a multi-billion dollar spending spree Noun 1. spending spree - a brief period of extravagant spending
spree, fling - a brief indulgence of your impulses
 laying down fiber optic networks. Other than working to lock down its phone customers and grow its broadband Internet See broadband.  customers, BellSouth has also initiated the technical trial of its television service, tapping the advancing capabilities of the company's next generation broadband network. Along with Verizon and SBC, BellSouth has every intention of delivering cutting-edge voice, video and data services to customers in full competition with the cable companies.

Bill Smith, BellSouth's Chief Technology Officer, summarizes what's to be expected from the telephone industry's decision to enter the market with advanced video services: "IPTV will potentially forever alter the way we consume video content much like personal video recorders See DVR.  have done. IPTV places customers in the driver's seat driv·er's seat
n.
A position of control or authority.
 and gives them complete control of their entertainment experience regardless of the media format or which device within their home they wish to use [television or computer]," he said. "We're bringing together the benefits of broadband, the rapid adoption of home networking technology and the magic of software to give customers content where, when and how they want it."

Building a Fiber Network

SBC's fiber strategy is rapid and aggressive. They will generally not connect fiber lines directly into homes and apartments, except for new development projects. Instead, they will bring fiber to one point in a neighborhood (FTTN (Fiber To The Neighborhood or Fiber To The Node) See FTTC. , Fiber to the Node Fiber to the node (FTTN), also called fiber to the neighborhood or fiber to the cabinet (FTTCab),[1] is a telecommunication architecture based on fiber-optic cables run to a cabinet serving a neighborhood. ) on an apartment property (FTTP (Fiber To The Premises) The installation of optical fiber from the carrier directly into the home or office. Also called "fiber to the home" (FTTH). See PON and FTTC. See also FTP. , Fiber to the Premise), then use a significantly upgraded copper network from those points to deliver services into homes and apartments. This strategy is highly cost effective and requires less time to deploy than the strategies used by its competitors. As such, SBC is expected to deploy its trio of services on a more broad scale, faster than its industry colleagues.

BellSouth, who's third to move toward fiber has a strategy similar to SBC's. Fiber is brought into the home only for new construction, but for older neighborhoods and existing apartment communities, the company will come to a central point with a fiber network, and then use an upgraded copper wire network for what's referred to as the "last mile."

Competitor Verizon Communications
"Verizon" redirects here: this article is about the corporation; see also Verizon Wireless, Verizon Online DSL and Verizon FiOS.


Verizon Communications, Inc.
 is taking a much different and vastly more expensive approach. The company will bring fiber directly into homes and apartments, then distribute its services to the television set, telephone and computer using the existing (or new) copper network.

Of all the fiber network strategies deployed by the Bells, FTTH (Fiber To The Home) See FTTP.  (Fiber-to-the-Home) is the one causing the most issues for multifamily housing developers and owners. For some, particularly those operating in Verizon's territory, the challenges imposed by an FTTH installation range from forced changes in construction plans, to increased costs, to infrastructure ownership and control issues. But eventually, all developers and owners are expected to be faced with their local Bell company asking (or demanding) to either replace its copper network on existing properties or install only fiber networks in new projects. But unfortunately, the issues don't end here.

Once the Bell company has facilitated bringing fiber onto a property and up to or inside the buildings, it has laid the highway to provide all three--voice, video and data--services to residents. And while many agree more choice in services for residents is better, there are numerous hidden potential liabilities and ongoing issues with a fiber network of which owners should be aware.

What and Who

Matt Ames is a partner with the Washington, D.C., office of Miller & Van Eaton. Since Congress passed the 1996 Telecommunications Act There are several laws named the Telecommunications Act
  • Telecommunications Act of 1996 in the United States
  • Telecommunications Act (Canada)
  • Telecommunications Act 1997 in Australia
, he has advised the National Multi Housing Council (NMHC NMHC National Multi Housing Council
NMHC Non-Methane Hydrocarbons
NMHC National Modular Housing Council
) on voice, video and data infrastructure issues. In a recent report published by NMHC, "Telephone Fiber to the Premises Fiber to the premises (FTTP) is a form of fiber-optic communication delivery in which an optical fiber is run directly onto the customers' premises. This contrasts with other fiber-optic communication delivery strategies such as fiber to the node (FTTN), fiber to the curb : Apartment Owner Issues and Considerations," Ames addresses six points for developers and owners to consider when approached by companies wanting to install a fiber optic network on a property:

1 Space Requirements and Installation Tuning. The size of equipment currently being installed by phone companies inside apartment units to accommodate a PITH network is based on the single-family model, making the boxes too large to suit the needs or desires of many property owners. For the moment, the options are either to forego having a fiber network installed or find space to accommodate the larger equipment.

2 Access to Electrical Power. With few exceptions, traditional copper phone lines allow communications to take place even in the advent of power failure. However, with fiber networks, no electrical power means no communications. Accounting for building a backup power An additional power source that can be used in the event of power failure. See UPS and backup.


A Half Minute of Backup
This roomful of lead acid batteries stands ready to drain itself entirely in less than a minute.
 source is a cost that will need to be borne by either the owner or developer or the phone company.

3 Liability in Case of Power Failure. To prevent loss of a residents' ability to contact emergency services emergency services Emergency care '…services …necessary to prevent death or serious impairment of health and, because of the danger to life or health, require the use of the most accessible hospital available and equipped to furnish those services'  during a power outage Noun 1. power outage - equipment failure resulting when the supply of power fails; "the ice storm caused a power outage"
power failure

equipment failure, breakdown - a cessation of normal operation; "there was a power breakdown"
, there needs to be battery backup See UPS.  with each units' system. For dependability,, batteries must be replaced routinely. Owners should clarify, in writing, who is responsible for routine battery replacement and who is liable for battery failure.

4 Electrical Grounding Requirements. Because the designs and specifications for fiber network terminations Network Termination - (NT, NT1) A device connecting the customer's data or telephone equipment to the local ISDN exchange carrier's line. The NT device provides a connection for terminal equipment (TE) and terminal adaptor (TA) equipment to the local loop.  are continuing to evolve rapidly, owners need to make sure that the optical network terminal is properly grounded, in accordance with all local safety codes.

5 Location of Demarcation Point The location within a home or office where the lines from the telephone company connect to the customer's lines. . By making the request to install fiber to each apartment unit and control this fiber, the telephone company is effectively forcing the owner to set a demarcation point in each unit. This causes a significant loss of control over wiring for the property, which is something the multifamily industry has long fought against. Owners should consider designating a single demarcation point at the minimum point of entry (MPOE MPOE Minimum Point of Entry
MPOE Main Point of Entry
) to the building, rather than in each individual unit.

6 Exclusive Contracts. Allowing the telephone company to install its fiber network with a service contract that locks in exclusivity for any or all of the three services (voice, video, data) it provides, may cause conflicts with other contracts for the same services already being provided at the community. Carelessly not reviewing existing contracts before signing the telephone company's contract could cause an owner to breach an existing exclusive contract.

Keeping Score

Fortunately, private property laws in America have changed little since their inception. As such, neither telephone nor cable companies can enter a property to install a fiber network without permission. This is most particularly the case where the company already has a copper network installed in the building. As such, all owners and developers should strongly consider requiring a specific agreement with the provider(s) requesting access, making certain to properly assign the assumption of certain costs and liabilities, as well as protect against the loss of certain rights to own and control all voice, video and data inside wiring infrastructure.

In general, the deployment of fiber optic networks by telephone companies is a good thing. It provides access to state-of-the-art technology and services for talking on the phone, watching television and surfing the Net. In short, it brings everyone one step closer to a fully digital lifestyle (for those desiring such a thing). And certainly, residents will complain little about such competition being available. However, for this to be an advantage for owners and the long-term value of their properties, they must seek to fully understand and manage the cost and liability burdens potentially imposed by all this innovation and change.

Between the cable and phone companies' battles stands consumers--apartment residents. Between the resident and these telecommunication giants stand property owners and developers. If the technology and these relationships are properly understood, engaged and managed, everyone's attempt to provide or access the Triple Play will result in a home run.

Action Item

Visit www.multihousing.com to learn about what telephone and cable companies are doing with their fiber optic networks, network installation issues, legal, regulatory and contract issues as these relate to fiber optic networks and service.

Regional Bells Slug It Out

With regulatory victories in hand, the regional Bells (Verizon, SBC and BellSouth) are moving full-speed ahead to accomplish their goal to rewire America with fiber optic networks.

SBC. SBC will deliver television data and voice services to customers under the name Project Lightspeed and is expected to deploy services on a broader scale, faster than its industry colleagues, SBC's fiber strategy is rapid and aggressive bringing fiber to one point in the neighborhood instead of directly into the home.

BellSouth. BellSouth initiated a technical trial of its television service tapping the advancing capabilities o/the company's next-generation broadband network. Like SBC, it too, is continuing a multi-billion dollar spending spree, laying down fiber optic networks.

Verizon Communications. Verizon began taking orders in Texas for its new television service in a vastly more expensive approach, the company will bring fiber directly into homes and apartments, then distribute its services to the television set telephone and computer using the existing (or new)copper network.

Larry Kessler is an apartment industry advisor on technologies, regulations, wiring infrastructure, contract negotiations, broadband Internet and digital video services. He can be reached at 843/884-1101 Ext. 11.
COPYRIGHT 2005 National Apartment Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Author:Kessler, Larry
Publication:Units
Geographic Code:1USA
Date:Nov 1, 2005
Words:2481
Previous Article:Spreading the word: about renters insurance: sharing information about renters insurance is one way property managers can promote a service that...
Next Article:Tips to maximize disaster insurance: proactive measures by property owners will make navigating the murky waters of insurance claims easier.
Topics:



Related Articles
Baseball, Hot Dogs and Broadband Services HITTING A HOME RUN.
Broadband amenities: becoming a must-have for maturing communities: high-speed Internet access is the cry that many maturing property owners are...
Investing in technology for today's resident.
Clear communication: a lesson in the basics of repositioning a property for cable, broadband and digital video.
Plugged in: apartment communities explore broadband technology: in a soft rental market, broadband Internet access may be one more amenity that...
Telecom breakthrough: VoIP: broadband Internet can provide many opportunities for owners to improve their residents' living experiences. One emerging...
Introducing NAA's 2006 president.
All for one: traditional telephone companies and cable TV operators are competing for the same customers. Only one can win.
Telecom contracts: money on the table: it is an owner's best interest to administer and monitor lucrative telecom revenue sharing agreements.
The future of technology: put residents in the driver's seat: to retain residents, apartment companies must determine residents' technology needs,...

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters