Time Warner Cable and Cisco: One Heck of a Ride

This is another installment in News@Cisco's ongoing series celebrating Cisco's 25th Anniversary

February 8, 2010

By Charles Waltner

Fittingly, one of the legendary undertakings in the early days of the Information Age took place in Orlando, Fla., home of Disney World, the theme park of fairy tales and fantasy worlds.

It was here in 1994 that Time Warner Cable launched the Full Service Network, an interactive television trial viewed by many as a quixotic attempt to jump-start the much dreamed of 500-channel future.

The effort, burdened by massive complications and costs, looked like a misadventure at the time. But the Full Service Network was a crucial start in Time Warner Cable's quest to help pioneer a new age of communications.

And by persevering through the years of trials and tribulations, the company did eventually reach its technological holy grail. Along the way, it also got a little help from a key ally, Cisco Systems.

Time Warner Cable is now the second largest cable television provider in the United States, with 14 million customers in 30 states, generating $17 billion in revenue.

An Ambitious Experiment

In an exclusive interview with News@Cisco, Time Warner Cable's chief technology officer, Mike LaJoie, says the Full Service Network was a proving ground for all things TV we now take for granted: pay-per-view, interactivity, menu selection, and an endless array of television channels. By bringing the data and interactivity of the computer together with the video and sound of the TV, it was the first real test of the concept of "convergence."

Everything was brand new, first-print technology, LaJoie says. A cable operator had never used computer networking devices to run its services. The company, for example, worked with now defunct Silicon Graphics, then the maker of the industry's highest performance computers. Another key partner was Scientific Atlanta, the cable industry's preeminent set-top box vendor, now part of Cisco's formidable video networking portfolio.

And to Time Warner's credit, the ambitious technology did work. It just cost way too much to build and manage. The price for a one-gigabyte hard drive, for example, was $8,000, La Joie says. Today, a 500-gigabyte hard drive goes for about $70.

Despite the challenges, Time Warner Cable gained a critical insight from the trial: its customers did indeed want these kinds of services.

Along Comes the Internet

As Timer Warner Cable was testing the breaking point of interactive TV, the Mosaic browser gave birth to the World Wide Web. Quickly, the company realized that this might be an easier path to its ultimate goal.

"While we were busy with our Full Service Network, this small thing called the Internet showed up," LaJoie says. "We thought, 'Hey, we could do that.' And so we started wiggling bits across our network."

But Time Warner Cable still faced a great expanse of unknown technological landscape. The Internet wasn't widely understood. Even email was a rare thing. "You had to be someone special to have an account," LaJoie recalls.

To help with this new undertaking, Time Warner Cable turned to a rapidly growing tech start-up called Cisco. Working together, the two built one of the first residential broadband networks in history. The system, first launched in 1995 in Elmira, N.Y., provided one-megabit speeds across coaxial cable TV connections for $44.95 a month. It was the beginning of the end for dial-up modems.

The two were on to something. "Our cable modems were flying out the door," LaJoie says.

Striving for Efficiencies

LaJoie says cable operators had one key advantage for quickly bringing broadband to the masses. "From a technology perspective, it's just physics," he says. "You can send a lot more electrons down a coaxial pipe than a telephone wire."

The journey for Cisco and Time Warner Cable, however, had only begun. As with the Orlando Full Service Network, many of Time Warner's next challenges had to do with efficiencies. Once the company found a viable way to move toward cable TV's interactive future, it needed a cost-effective way to keep up with demand.

Cisco was tasked with figuring out the best ways to build up the company's cable TV system to support Internet-based broadband communications, while Time Warner Cable had to craft management systems from scratch for these new service options.

Though the coaxial cable was doing a great job of moving Internet traffic back and forth between customer homes and the neighborhood nodes, known as "head-ends," LaJoie says moving all of that traffic out to the greater World Wide Web was proving onerously expensive. "The data transport costs were killing us," he says.

To address this, in 2000 Time Warner Cable and Cisco completed construction of a set of regional fiber optic networks that could much more cost-effectively carry data traffic. "That was another big step along the way," LaJoie says.

Convergence and Some Chaos

Time Warner Cable then continued to work with Cisco to build new city-sized networks that could carry all possible communications options – video, data, and voice – on a single Internet protocol network. By 2004 these networks were up and running. Ten years after the launch of the Full Service Network, the dream had been realized.

Finally, Time Warner Cable could offer its customers almost any kind of interactive, multimedia service they wanted. The full scope of the digital revolution was now viable and, most importantly, affordable.

As a sign of just how far Time Warner Cable had traveled, by 2005 the company could no longer be called just a cable operator, as telephone service orders started "screaming out the door," LaJoie says. Time Warner Cable is now the sixth largest residential telephone company in the United States with 4 million subscribers.

But like any good tale, this fable had its scary moments as well. Inventing a new system of communications comes with its complications, LaJoie says. He winces at memories of some "explosive" failures when fresh from the labs networking gear ran head first into the harsh realities of a real-life deployment.

Such tests of mettle, however, are just part of the plot line for two pioneers. LaJoie says that Cisco and Time Warner Cable have had their difficult moments, but like family they have stuck together through thick and thin. "In the end, Cisco always stepped up," he says.

LaJoie says his "utmost respect" for John Chambers, Cisco's chief executive, has helped through the years.

"Working with him has always been a pleasure," LaJoie says. "Given the scope of the tasks he faces as the leader of his company, I have been impressed by how available he has been, how much he pays attention, and how quickly he takes action if we really need something."

A Never-Ending Story

Like any good customer, LaJoie never stops demanding the very best out of Cisco. He says his company will continue to need faster, better and less expensive equipment and services from the networking giant.

And he expects all of these things to keep coming. Thanks to Moore's Law, networking equipment and, as a result, broadband TV services will become increasingly sophisticated and affordable. "Customer expectations will grow along predictable lines," LaJoie says.

Though it is impossible to know exactly what networks will be able to do in five years, LaJoie says digital communications will inevitably become an even more important part of modern society.

"The first thing people will touch in the morning will be their electronic device," he says. "It will be the remote control for their lives."

Happily, the tale of Time Warner Cable's Full Service Network ends in a hard-won triumph. What were impossibly expensive and unmanageable technologies in Orlando 16 years ago have become the everyday trappings of today's networks.

But LaJoie says Time Warner Cable, Cisco and the rest of the industry are far from finished with this story. "We haven't even scratched the surface of what we can do," he says.

Charles Waltner is a freelance writer in Piedmont, Calif.