MediaOne and AT&T merge
Telephone companies trying TV over telephone lines again
Gas and electric company to offer home networking service
Networking manufacturers getting into software
Intel announces it will acquire DSP Communications
Palm Computing and Nokia to create a new category of product
Phone.com partners with eFax.com and buys Apion's wireless business 
10 Gbps Ethernet may connect corporate networks to the Internet
Cost of bandwidth continues to fall
Companies take sides in the battle for smart phone standards
Fiber Optek offers cell phone calls over the Internet

MediaOne and AT&T merge
Source: C/NET's News.Com 

The MediaOne Group has said its shareholders have voted to approve the company's merger with AT&T, a deal that would create the largest U.S. cable and long distance company. The Colorado-based MediaOne said nearly all the votes cast favored AT&T's $58 billion stock and cash offer for the company. AT&T's MediaOne purchase follows the telecommunications giant's acquisition of Tele-Communications Incorporated, another cable operator. AT&T aims to offer consumers a one-stop shop for communications needs over its newly acquired cable networks, including local and long distance as well as Internet access. The companies still need federal regulatory approval of the deal, which is expected to close in the first quarter of 2000. "This is a key milestone in the process," MediaOne chief executive Chuck Lillis said in a statement. "Our shareowners are extremely supportive of the strategy behind the merger."

Telephone companies trying TV over telephone lines again
Source: C/NET's News.Com 
After rejecting the business once, some of the biggest local telephone companies are turning their attention back to the television. Stung by cable companies' move into the phone business, a few of the biggest local phone companies are planning to provide on-demand videos and other TV services over their telephone lines. If successful, the move could help erase the lines between cable and telephone companies once and for all. These telecommunications firms are trying to offer one-stop packages of voice, video, and high-speed Internet services, but so far only AT&T has been able to introduce such complete packages nationwide. Executives at SBC Communications are the latest to jump into the fray, saying they'll start on-demand video trials early next year as a part of a $6 billion to their high-speed Internet network.

"This is going to make streaming video real," said Steve Dimmett, vice president of marketing for SBC. "This is going to be video on demand."

SBC Communications, with a footprint that covers a third of the country's local phone lines following its merger with Ameritech, isn't strapped for cash. 80 percent of SBC's customers by 2002 will have access to high-speed DSL connections that can provide downloads at speeds close to 1.5 megabits per second (mbps).

SBC Communications and Bell Atlantic already offer cable television service to their customers through DirecTV, a satellite service that competes with traditional cable companies. That may be enough for now, analysts note.

The problem is, video over DSL is still expensive. Even once the network is built, the costs of handling huge amounts of video traffic will be high. And the telephone companies will be competing with the average $3.00 price of a video rental, a difficult bar to clear.

"It's not that video on demand isn't a good idea. I think the market will love it," said Rex Mitchell, a Banc of America financial analyst. "But it's a real challenge to bring it down to the price point of a videotape."

Gas and electric company to offer home networking service
Source: C/NET's News.Com 
If you question whether home networking will ever catch on, consider this: A Texas-based gas and electric company plans to offer the nascent technology as a service for its 6 million customers.

Soon to be faced with increased competition in the wake of energy deregulation in the state, Houston-based Reliant Energy is exploring partnerships to expand its service offerings beyond gas and electric to cable and Internet access, phone service, and even home networking.

"We're in for an explosion for home networking," according to General Taylor Jr., an information technology team leader at Reliant Energy Communication Networks, who says the new offerings will help the company retain customers. "We want to bundle all the services into one utility bill."

Market research seems to back Reliant's strategy. At a Yankee Group home networking conference today, a newly available study suggested that the number of networked homes in the United States will mushroom from 650,000 in 1999 to 10 million by 2003.
The market may be poised for take off according to Yankee Group analyst Karuna Uppal, as companies such as utility firms, which aren't traditionally tied to networking technology, embrace the technology.

Yet for home networking technologies to truly succeed in the market, firms must convince consumers that the new technology can help them save time, make organizing activities more convenient, and can even entertain them, according to 3Com chief Eric Benhamou.
Emphasizing the entertainment value of the technology, as well as highlighting the ease at which PCs can be networked to use a single Internet connection, will help fuel growth in the nascent home networking market, technology firms said today.

3Com, Intel, and others are counting on home networking kit sales to skyrocket this Christmas season, and plan to launch large advertising campaigns to try and persuade consumers to buy their products, either as standalone kits or when bundled with new PCs.

The wireless and phoneline networking kits allow consumers to connect their PCs and peripherals together to share Internet access or play multiplayer games. With phoneline technology, users can network PCs by plugging them in phone jacks.

Dan Sweeney, general manager of Intel's home networking operation, said Internet sharing--the ability to have several PCs surf on the same Internet connection--is currently the primary driver of home networking. Early next year, high-speed Internet access modem manufacturers plan to include home networking technology in cable and digital subscriber line (DSL).

Networking manufacturers getting into software
Source: C/NET's News.Com 
Nortel's purchase of business software maker Clarify is just the latest sign that network equipment providers fear selling snazzy hardware technology won't be enough to survive in a rapidly changing marketplace. Cisco, Nortel, and Lucent have all spent billions of dollars in the past year to augment their networking core with software technology that manages telecommunications networks and organizes customer information, such as billing. Even European equipment provider Alcatel has bought the software firm Genesys Telecommunications Laboratories for $1.5 billion.

The upshot of such deals is a more diverse, complex role for networking equipment providers. Firms are now focusing more on what software applications and features run across their networks, rather than on the nuts and bolts of the network itself. Increasingly, companies such as Lucent and Nortel are growing from their telecommunications software roots to tackle new businesses opportunities like e-commerce.

Others, such as Cisco, are expanding beyond their Internet-based core to cater to telecommunications carriers that need sophisticated software to run their networks and manage their customer base. Some already view Cisco's "IOS" software as its crown jewel, since it contains many of the protocols and services companies and service providers use to run their business.

Analysts say network equipment companies are interested in specific portions of the software industry, such as billing applications, so they can address not only their customer's networking needs but offer technologies that can best take advantage of the network investments that have already been made.

The integration of voice and data network traffic across a single scheme also plays into software's increased role in business strategy for Cisco, Lucent, and Nortel.

"As these companies look at trying to address convergence, they're looking at, What are the [network] voice applications? What are the data applications?" said Chris Nicoll, director of infrastructure analysis for market watcher Current Analysis. "It's interesting to see the traditional hardware vendors focusing on how organizations are using networks," Nicoll said.  Competitive pressures in the market are also spurring business deals between some of the major players in both arenas. Lucent bought Kenan Systems and Mosaix, while Cisco grabbed GeoTel Communications and WebLine Communications this year.

Though parts of the network hardware business are extremely lucrative, there are only so many equipment dollars that can be squeezed out of a market through upgrades once an installed base of high-end hardware is built.

"What we're coming down to is the hardware is becoming commoditized," said Maribel Lopez, an analyst with industry consultants Forrester Research "The basic hardware [for networks] has pretty much been decided."

Intel announces it will acquire DSP Communications
Source: IEEE Spectrum's newslog
Intel Corp. announced that it would acquire DSP Communications Inc. (Cupertino, Calif.), a designer of chip sets and software used by mobile phone makers, for $1.6 billion. DSP, which employs most of its engineers in Tel Aviv, Israel, makes chips and software used in several types of digital cellular phones, especially those in Korea, Japan, and the United States. According to Intel, the acquisition fits into its vision of an increasingly wireless Internet accessed through hand-held devices.

Palm Computing and Nokia to create a new category of product
Sources: IEEE Spectrum's newslog and Palm Computing press release (www.palm.com)
Palm Computing (a unit of 3Com Corp.), and Symbian (a consortium of Ericsson, Motorola, Matsushita, Nokia, and Psion) announced a joint development and licensing agreement to create a new pen-based product for wireless Internet access. The new wireless phone will let users enter text by writing on the screen surface with a stylus. To build the phone, Nokia will license the Palm Computing Operating System (Palm OS) to implement the user interface and applications running on the Symbian Epoc platform. The phone is to be introduced first in the United States, in 2001. Analysts said that the deal was a blow for Microsoft Corp., which had sought to gain support from cellular phone manufacturers for its Windows CE operating system.

Palm Computing's press release on Wednesday, October 13 announced a broad licensing and joint development agreement with Nokia to create the new product category. According to Palm Computing, consumers will get all the benefits of a pen-based wireless device, integrating telephony with data applications, along with all the personal and professional information management capabilities they find today in the Palm devices. They'll also have access to the rich library of software applications developed for Palm organizers. The community of thousands of software developers will see a whole new range of application opportunities.

Phone.com partners with eFax.com and buys Apion's wireless business
Source: www.iLocus.com
eFax.com announced a partnership with Phone.com, a provider of Wireless Access Protocol software that enables the delivery of Internet-based services, to mass-market wireless phones. The eFax offering will be integrated into Phone.com's MyPhone service offering. The MyPhone service is a mobile portal platform with user customizable Internet content enabling network operators to offer their own branded portal sites to wireless subscribers. As part of the agreement, eFax.com will provide Phone.com with a customized fax solution for Internet enabled wireless phones, including fax notification and forwarding.

Using Phone.com's MyPhone portal service, users can sign-up for their eFax number and access fax services from their wireless phones.
Phone.com is a provider of software that enables the delivery of Internet-based services to mass-market wireless telephones. Using its software, wireless subscribers have access to Internet and corporate intranet-based services

In other news, Phone.com said it would buy the wireless telephone products and operations of Apion Ltd, Belfast, Northern Ireland, for $239 million. Apion's facilities will be used to form Phone.com's first product development center outside Silicon Valley and serve as the base for European expansion. By building a product development center in Europe, the company hopes to move the process of developing software closer to European customers and Europe's wireless software standards. Phone.com is the co-founder of the Wireless Application Protocol, the most widely used standard for delivering Internet content to wireless phones. Apion has produced software helping wireless companies offer Internet services over the GSM phone standard, prevalent in Europe. 

10 Gbps Ethernet may connect corporate networks to the Internet
Source: www.comsoc.org/INC
Ethernet may emerge as the technology that will connect corporate networks to the public network. Ethernet is a transport technology that pushes bits of data along a network. The most recent version of Ethernet is 10 Gigabit Ethernet (10 GbE). Among companies, Ethernet has become the leading technology for transporting IP data. While the technology is typically used in the local network, its speed makes it an option as a public network technology. Ethernet can lower infrastructure costs and ease network operations, according to Nortel Networks' Carlos Zaidi. However, it is not suitable for the long fiberoptic backbones that comprise the Internet and the public network. In an effort to overcome such transmission problems, Nortel is working with the Institute of Electrical and Electronics Engineers to integrate SONET capabilities into 10 GbE.

Cost of bandwidth continues to fall
Source: www.comsoc.org/INC
Technological advancements and greater competition are making bandwidth more widely available at lower costs. Advertising designer Zimmerman Crowe Design and consulting firm KPMG are among the companies benefiting from the dropping cost of bandwidth. Concentric Network provides the 160 Kbps DSL connection that allows Zimmerman to post large files on its Web site. KPMG uses its ATM network to offer T3 links into seven offices and T1 links to 120 offices. Renaissance Worldwide predicts that over 15 million miles of fiber will be deployed in 2002, compared to roughly 9.4 million miles last year. New technologies, including dense wavelength division multiplexing, are enabling carriers to place a greater amount of bandwidth on their local and long-distance networks. Qwest Communications International, which has deployed optical fiber sufficient for the entire world's communications traffic, is contributing to a decline in prices by undercutting the rates offered by incumbent service providers. Incumbent telcos like AT&T and MCI WorldCom are fighting back by implementing technologies that increase network capacity.

Companies take sides in the battle for smart phone standards
Sources: The Economist
Smart devices that combine the functions of a personal computer, a personal digital assistant, and a wireless phone are finally becoming a reality. According to Motorola's projections, the number of mobile devices with Internet access will outnumber wired devices without Internet access in the next six years. In addition to providing another avenue for mobile phone growth, the devices are expected to limit the importance of personal computers and convince more consumers to join the information superhighway. A slew of alliances and forums have been created to address this rising market. The WAP forum, which has attracted 90 companies, expects as many as 525 million WAP-compliant phones to be sold in the United States and Western Europe in the next four years. Symbian, a consortium consisting of Psion, Motorola, Ericsson, Nokia, NTT DoCoMo, Sun Microsystems, and Matsushita, seeks to make Psion's EPOC operating standard the de-facto standard for smart phones. This puts the consortium in direct competition with Microsoft, which is aggressively moving to launch wireless products that integrate its Windows CE operating system. Microsoft has acquired a 4.25 percent stake in Nextel Communication, reached an development agreement with QUALCOMM, and has convinced Acer, Philips, Daewoo Telecom, Panasonic, and Vestel to use Windows CE in their more advanced phones. However, Psion's partners manufacture 85 percent of mobile phones worldwide. Some software experts contend that this makes EPOC a better-suited operating system for mobile phones. While some critics expect consumers to use their phones to browse the Web as they would with their computers, industry players are planning to offer tailored products that allow users to exchange short messages and find specific information. Meanwhile, carriers are moving to higher speed networks such as HSCD, GPRS, EDGE. HSCD, GPRS, and EDGE offers data transmission rates of 57.6 Kbps, 115.2 Kbps, and 384 Kbps, respectively.

Fiber Optek offers cell phone calls over the Internet
Source: www.iLocus.com
Fiber Optek announces the development of a new black box technology to enable cell phones to function around the world providing integration of standard cell phone traffic with the Internet. A cell phone user looking to call someone in another country, dials the number of the nearest Cellcross "black box.'' The unit asks for the country and phone number being called, converts the call to IP, transmits it over the Internet and rings the number without an intervening phone company. International calls by cell phone still face lower call completion rates in several countries. There exists no mechanism for billing the caller and no access to the world-wide phone network. This new system called "Cellcross'', will make international calls with user's cell phone easier. "Cellcross will bill the caller at a per-minute rate less than a regular overseas call. When the Cellcross system is deployed world-wide, cell phones will be usable anywhere with no need for a toll call.'' said Michael S. Pascazi, president of Fiber Optek.