April 1, 2008

Business Telephony Takes Off

Soaring from Home to Office

By Jennifer Rinaldi, Associate Editor

As measured by activity in North America's largest cable operators, the industry's expansion into business telephony is moving rapidly, producing positive results.

Time Warner Cable has rolled out its Business Class phone service in almost all of its divisions, while operating the service in 22 markets. Business voice availability is approaching 100 percent of Comcast's footprint. And according to Cox Business Services Director of Product Development Charles Scarborough, Cox Business is growing faster than Cox Communications overall, while Cox business telephony is growing faster than residential.

"As far as telephony, we're fully built out," Scarborough said. "Wherever residential is, commercial is."

Because of, at least in part, that service availability, Cox Business is experiencing year-to-year revenue growth greater than 21 percent. That figure refers to Cox Business overall, and Scarborough said telephony is even higher than that. In 2007, Cox overall voice lines grew by more than 25 percent while voice grade equivalents grew 25 percent over 2006.

How are the other cable operators doing? They are upbeat, if less specific.

"Too early to report numbers," said Time Warner Cable spokesperson Justin Venech. "However, we have received a very positive response from our customers."

"Comcast has a pretty successful Internet business for small business already," said Kevin O'Toole, VP of business products and strategy for Comcast. "We've got over 300,000 subscribers and $350 million in annual business revenue at this point."

Business vs. residential

Regarding business telephony services, Scarborough explained that there are points of differentiation between those and residential. First of all, he said, business does a fair amount of business over fiber.

"We have two networks," Scarborough said. "We have a coaxial network, and we also have a fiber network. We do pretty much all of our trunks over fiber today. You get the resiliency, the capacity and everything that goes along with that."

Cox also has VoIP infrastructure, "what's referred to as PacketCable in our world," Scarborough said. "We do share the same infrastructure, but there are some distinctions."

Scarborough pointed out that "commercial telephony turn-ups are more complicated than residential due to inside wiring and customer premises equipment, e.g. key sets." Thus, Cox Business dispatches field technicians specially trained on business installations.

Another distinction is customer response time, often dictated by service level agreements (SLAs) more strict than might be provided for residential telephony or entertainment service.

Comcast adheres to this as well, offering business customers service-level distinction. "We have a dedicated tier 2 group just for commercial customers and priority dispatch associated with commercial voice," O'Toole said.

Time Warner's Venech added that the company's Business Class service has a designated sales force, which takes a consultative approach to maintaining its relationship with small business customers.

"As for service, business customer service requests are handled as a priority," he said.

Packet neutrality

While customer service requests may be a priority for cable operators, their business telephony traffic is treated much the same as residential.

"All telephony is prioritized on the network, be it residential or commercial," Scarborough said. "We don't make a distinction. We allocate time when you pick up the phone and create a quality of service (QoS) transmission - your allocated time slots or transmission slots - and that's valid for residential or commercial."

"All of our voice packets receive the highest priority as they traverse our network to ensure great quality," said Comcast's O'Toole. "There's no differentiation in terms of how we treat business voice packets vs. residential voice packets, but it does take advantage of that same network."

Scarborough added that prioritization only really comes into play when you have congestion on your network anyway. He said that Cox manages its network "pretty darn well, so we rarely even have a situation where there is congestion." In the rare instances where there is congestion, telephony traffic always gets priority over data traffic.

The premise for this equal protection is simple, Scarborough explained: A 911 call for residential is just as important as a 911 call for business when you come down to it. Somebody's life could be at stake.

Hardware

As for customer premises equipment (CPE), Scarborough said that Cox, like Comcast, is using Arris embedded multimedia terminal adapters (EMTAs).

"At the high end, we deploy the Arris 12-line EMTA, and we can stack those if needed," Scarborough said. "We've had situations where we've stacked 12-line EMTAs. We can stack those up two, three, four if we want to for a node congestion issue, so we like to make sure we manage that closely."

Scarborough said there is no real theoretical limit to how many lines Cox might provide to a customer.

"It gets to a point where if you get to a certain number of lines, they're probably going to prefer fiber anyway, and so it becomes more of an issue of the service delivery method than the end point," Scarborough said. "There's no strict rule there. You don't want to put too many lines to an individual customer because then you can get node congestion. So in that sense, we'd like to put those customers off to the fiber network and allocate more capacity to customers on the HFC side. That's just basic network management."

On the fiber side, Scarborough said that in some markets Cox deploys integrated access devices (IADs), nodes and support. An IAD can support up to 24 lines.

"But if we're talking strictly HFC," Scarborough said, "we deploy the Arris 512. Those are 12 line … and we can stack those."

Comcast also uses the Arris line of EMTAs. "If it's a small customer, only two lines, we use the 502," O'Toole said. "For high-end customers, the Arris 508."

Cox is also using Broadsoft as its feature server provider. Broadsoft uses session initiation protocol (SIP), and Scarborough said leveraging that feature server has enabled some enhanced features that Cox was not able to provide previously, particularly those involving Web treatment applications.

"We're sort of on the road to PacketCable 2.0, and that uses SIP in the IMS (IP Multimedia Subsystem) framework," Scarborough said. "I would call it an intermediate step to that PacketCable 2.0 framework."

Cox is deploying that technology on the commercial side, in advance of residential.

"Publicly, we've deployed in New England," Scarborough said. "We are live in two markets and moving very quickly across the country. Our goal is to get 75-80 percent of our revenue-generating markets online by the end of this year."

Appealing to the business customer

According to O'Toole, Comcast is focused on offering small business owners choice and quality.

"The market that we're participating in has never had great alternatives," O'Toole said. "We're showing up with a credible choice, good product, good choice and then offering them free hosted features, such as Microsoft Exchange and Sharepoint, which they would have been hard-pressed to get absent a large ASP (application service provider) partner."

Scarborough describes the Cox offering as a "feature-rich bundle" consisting of applications with services, such as selective call rejection, which can be manipulated via a Web interface.

"We just launched a project called Voice Manager, which provides more enhanced features," Scarborough said. "It's a little bit different from the traditional commercial PacketCable we've deployed in the past. It's based on protocol using the Broadsoft platform."

Scarborough said Cox's time-based feature management appeals to customers.

"Just the ability to do call forwarding over the Web, instead of having to remember the star features, has been resonating," Scarborough said. "The ability to deposit your voicemail into email and to retrieve your email - that's just a great feature."

Scarborough pointed out that 40 percent of cell phone calls are received in the office right next to the landline phone. An application that enables a simultaneous ring on both devices remedies this inefficiency. Scarborough said Cox customers save money immediately by picking up the call on the less expensive land line.

Another feature gaining traction is Remote Office, the ability to use any direct dial number and, with caller ID, present it as if you were at your desk.

"In other words, I could be working from home, and I could use the Broadsoft platform, our Voice Manager product, and actually create a call and make it look like I'm in the office. The caller ID would be presented as if I were in the office, and all the long distance charges would be incurred by the office and not by my cell phone while I'm working at home," Scarborough said.

In addition to unified messaging, simultaneous ringing and remote office, Cox says its Auto-Attendant application is of particular use to subscribers.

"What's interesting about the Cox market is that natural disasters seem to love us," Scarborough said. "You've got the fires in San Diego, you've got tornados in Oklahoma, hurricanes in New Orleans and Hampton Roads, VA, blizzards in Providence RI …."

Scarborough said the bottom line is if customers have premises-based equipment and auto-attendant residing on their key set or private branch exchange (PBX) and their business goes down, with the Web-based auto attendant, as long as they have access to the Web they can redirect calls at will.

"We're really trying to move into disaster recovery," Scarborough said, emphasizing the importance of continuity of operations to business customers.

Predictions

As for the future, Scarborough characterized SIP trunking for business voice "is the biggest no-brainer in the history of mankind."

"One of the biggest benefits of SIP trunking is that your average key set has 12 stations and four lines coming into it," Scarborough said. "The problem with that in the legacy environment is you have one number per line. With SIP trunking, you can actually associate a number to each station. Now, we're able to provide direct station dialing to the very small business that has its own keyset."

Scarborough said the vendor community sees the potential as well.

"The Ciscos, the Nortels, the Microsofts of the world have a keen interest in working with cable to provide that total solution of CPE-based keyset with SIP trunking for the network," Scarborough said.

Comcast's O'Toole agreed that SIP trunking would be important. He also offered a word of caution.

"There is such an installed base of legacy PRIs (primary rate interfaces) out there that it's hard to ignore that," O'Toole said. "I don't think we've made a final decision on which trunking technology we'll go to market with. I think it's important to be part of the growth market, but there's a lot of legacy base out there as well."

Lifeline business

Cable operators are in sound agreement on the fundamentals: Business customers expect a higher level of service than cable ops have traditionally provided to residential, entertainment consumers.

For businesses, large or small, telephony is a lifeline. By maintaining high standards of customer service while offering an array of features that actually boost efficiency, cable operators can leverage their presence in local business communities to further expand their share of this market.

Jennifer Rinaldi is associate editor of Communications Technology. Reach her at jrinaldi@accessintel.com.