Cable VoIP in the news

Cable Hastens Telco Phone Line Losses

Cable Digitial News, who recently sold themselves to the parent of Light Reading, recently put up an interesting article saying that cable now has 62% of the 6 million customer residential VoIP market; up from 52% a year ago.  The telcos have been seeing an erosion north of 8 million lines per year and claim to be reducing the churn to closer to 6 million this year.  I scratch my head at that one.  I see the trend going in the other direction now that Comcast and Charter have launched cable VoIP products in most of their footprint.  That’s almost 50% of the US market that didn’t have a cable VoIP option a year ago.  I see the churn to cellular-only picking up speed, too.

The article couldn’t resist taking a pot shot at Vonage… the poster child of failed IPOs.  Like everybody else, I’ve been watching it crater.  The FCC news this week that Vonage is going to be required to pay into Universal Service Fund just further erodes their price advantage against the telco wireline product and the cable VoIP product.  This after rulings about CALEA and 911 requirements.  I think the company will end up being worth their cash plus about $100 per subscriber. 

It’s unfortunate that the lay person now thinks VoIP == Vonage and the brand is associated with low quality and a gigantic stockmarket failure.  The cable VoIP product has quality parity with the telco wireline product.  It just goes to show that if you set out to build a quality product rather than take advantage of regulatory arbitrage, you end up winning in the end.

An interesting factoid I’ve picked up recently is that when cable companies sell or trade properties to other cable operators, they value each customer who takes their VoIP product $1000 more than one who doesn’t.  I think this is going to be a big incentive for cable operators to roll out VoIP in their smaller markets since those are the properties that tend to be traded around frequently.  I’ll refrain from talking about my own company but Nortel just announced a scaled down version of their product called the CS 1500 that is clearly targeted at smaller markets. 

Obligatory mention of VoIP Security:

I’ve found myself deluged both from executives within my company and from the cable-oriented trade press about the Net2Phone theft of service hacker case.  There were all kinds rumors flying around that our product was somehow involved.  I had to run through the littany of layers of security that protect cable VoIP. 

  • DOCSIS is encrypted with 56-bit DES
  • Cable modem chips can only listen on the downstream.  You need a $10K piece of test equipment to sniff the upstream
  • The media terminal adapter (MTA) has a digitial certificate burned into it
  • The MTA authenticates with a Kerberos Key Distribution Center as part of the boot & provisioning sequence
  • The MTA is bound to a single Cable Modem Termination System so a cloned MTA will only work in a small geographical area
  • PacketCable Softswitches sit behind firewalls
  • Nobody turns on signaling or media security today but all the products support it and are conformance tested at CableLabs
  • With a simple port blocking strategy, you could make the Softswitch and MTA invisible on their signaling port

 I did get extensively quoted in one article but they mis-spelled my name.  So far, I’ve only consumed a few nanoseconds of my 15 minutes of fame.

Leave a Reply

Your email address will not be published. Required fields are marked *