Regulatory Watch :Cable Kings Run ISP Access Test Beds

When the Federal Trade (FTC) Commission and AOL and Time Warner lawyers faced off across the FTC conference table over the proposed $109 billion merger, there was little doubt about where the two sides disagreed: How much would the giga-company be willing to open its cable systems to rival ISPs and content providers?

"Our concern was that the merger of these two powerful companies would deny to competitors access to this amazing new broadband technology," FTC Chairman Robert Pitofsky said during a Dec. 14 press conference announcing the FTC's approval of the merger.

The FTC's worries are real: With 26 million subscribers, AOL is the world’s largest ISP; the Time Warner Cable network reaches about 20 percent of U.S. cable households, second only to AT&T's cable network. Time Warner also owns a lot of content, including cable programming networks such as HBO and CNN, publishing and recording interests and film libraries. AOL Time Warner, as the new company would be known, could easily lock out competing ISPs and limit the kind of content it allowed over its pipes. So the FTC approved the merger under three key conditions. In the end, the companies agreed to:

Allow access to at least one rival ISP immediately (Earthlink signed a deal with Time Warner before the FTC approved the merger) followed by at least two additional ISPs within 90 days;

Not disrupt the flow of content over its network;

Offer AOL's DSL services equally to subscribers in areas where Time Warner does and does not offer cable broadband service.

Easier Said Than Done

Before interconnecting rival ISPs to its cable network points of interconnections (POIs), AOL Time Warner must iron out difficult technical challenges, such as identifying which traffic belongs to which ISP and ensuring that it is delivered to the right subscriber. It must create billing and back office software from scratch, as well as determine the level at which it will let rival ISPs "see" into its network to view the level of network performance their customers receive. Rival ISPs also have to match their software code with AOL's to ensure their systems can interoperate with AOL's modem software. Not only that, router technology currently lacks the sophistication to handle the identification and routing of multiple ISP traffic without producing latency. AOL Time Warner plans to test various routing protocols, including MPLS, and policy-based technology to design the most effective routing capabilities.

AT&T Faces Same Challenges

AT&T, the nation's largest cable network owner, faces the same challenges as it positions itself to compete with AOL Time Warner. Both AT&T and AOL Time Warner are running test beds to work out ISP cable interconnection issues. Other cable network owners are watching closely, because the FTC’s requirements may well serve as the model for future ISP-over-cable system mergers.

Time Warner is conducting a multiple ISP trial in its Columbus, Ohio, cable system while at the same time, AT&T works out bugs in similar tests in Boulder, Colo. During the three-phase Time Warner test, developers plan to design and install a router in Time Warner headends to determine which IP packets to route to and from specific ISPs; create new back office systems and billing and customer service software to handle the requirements of rival ISPs and eventually launch a small system-wide platform in the Columbus area. The access scenario can get quite complicated: A household has three PCs. One family member may want to use an ISP for e-mailing friends or chatting, and likewise be charged for a minimum level of bandwidth. Meanwhile, a telecommuting parent needs much more bandwidth, and finds an ISP with a good pricing scheme to meet her needs. Meanwhile, one of the children wants to download video games and other rich content and finds a third ISP to fit his needs. Will they be able to access their respective ISPs simultaneously? This leads to all kinds of possibilities when it comes to designing pricing schemes and developing rating and billing systems.

Time Warner to FCC: It Won't Be Easy

It will not be easy, Time Warner told the FCC in response to the agency's queries into how the company plans to let other ISPs onto its network. “While not changing the functional architecture [of the network] these enhancements are substantial,” the company told the FCC. As for routing protocols, "A final decision can only be made after the trial because the tradeoffs are complex and new technologies are continuing to be developed."

Time Warner, AOL, CompuServe Classic, Juno and Road Runner, using Time Warner employees as end-users, in July began activating additional hub sites. In the first phase, provisioning of service and billing was done manually. The goal of Phase II, the operational trial, is to design and test provisioning, billing and customer care systems. Time Warner also wants to link an additional ISP to the network without disrupting the operation of ISPs already on the network. It is during this phase that Time Warner hopes to let individual customers seamlessly switch among ISPs on the same PC desktop. Phase III consists of deploying a system-wide rollout of multiple ISPs in the Columbus area.

The company was hopeful but cautious when describing its plan to the FCC, which was next in line to approve the merger. “Technical solutions are being developed from scratch,” Time Warner said. “This includes specialized software protocols to configure the system to accommodate multiple ISPs, as well as to allow customers to pick and choose among different ISPs and service level options” including data speeds. Time Warner must also develop “entirely new ordering, provisioning and billing technology to allow each ISP or Time Warner to directly bill subscribers.” To help it along, Time Warner is reviewing and analyzing documentation from AT&T’s Boulder trial.

AT&T: Provisioning a Big Roadblock

Sarah Duisik, AT&T spokesperson for the Boulder trial, dubbed “Broadband Choice,” explains the goals of its tests. “Cable networks are designed for one provider. The real challenges involve provisioning, customer care and trouble-shooting, aside from all of the technical matters that need to be addressed to allow multiple ISPs onto the network." AT&T’s partners in the test include Juno, Earthlink, RMI.net and several others. The ISPs have to link to AT&T’s cable network interconnection via T1, OC-3 pipes or larger.

The ISPs also had to share their customer installation software with AT&T to ensure its compatibility with

Service Agent, the software AT&T uses to set up Internet service on customers’ modems and PCs. The companies also supplied a contiguous block of IP addresses so AT&T could track which address belonged to which user in the test. “The customer is immediately assigned a new IP address from that block from the company they're choosing,” Duisik says. “Block 1-200 might belong to Juno,” Duisik says. “Block 201-300 might belong to another ISP. That way we know which customer belongs to which ISP when they click on the desktop icon.”

Latency a Problem in Routers

One of the chief challenges in the AT&T test is preventing latency as multiple ISPs run their packets through the same routers. Routers have to be enhanced to read and send those packets to the right destination. “Right now traffic doesn't have to be read because it belongs to AT&T @Home customers. Now each packet has to say this one belongs to Juno, this one belongs to WorldNet, to ensure it gets to the right ISP. To eliminate latency, we’re waiting on the next generation of routers. We need to make sure that routers are able to read traffic quickly and efficiently,” Duisik says.

One answer AT&T and AOL Time Warner are considering might be found in policy-based routing, an offshoot from source-based routing. “With existing technology, the router opens the envelope, and says this belongs to a specific user and sends it. Policy-based routing reads an imprint on the outside of the packet so it won't have to be opened. We’re working to perfect this.”

Another hurdle to overcome: building OSS for billing and customer care. “Billing is still not in place, because the OSS is still being developed and enhanced," Duisik says. Another issue: will the software from rival ISPs hurt the performance of other ISPs on the network? "This is still an unknown," Duisik says. "If the customer makes a choice for one ISP, we want to make sure that no lingering [coding] elements from another ISP are around to interfere."

Owning the Customer Information

When companies like AT&T or AOL Time Warner own the modem and the cable network, they in essence control the customer information. Contractual questions may arise as to how much network information the cable owners will let rival ISPs view. "They may want to look into our network to measure customer use and network performance," Duisik says. "Some of the other ISPs might want to see how their customers are receiving their traffic. We still haven't determined how much information we will make available."