After years of promises and months of delays, ubiquitous high-speed Internet connections are almost here. At least a few Orange County companies hope so.
Companies that offer everything from the gear that drives the Internet to the content that flows over it are betting on the rapid adoption of high-speed, always-on connections. Their hope is the so-called fat pipes of broadband Internet access will make possible a range of full-motion video, high fidelity sound and remote networking that opens the door for a variety of off-site services.
Thanks to faster rollouts of cable Internet and digital subscriber line service from the likes of SBC Communication Inc.’s Pacific Bell, Cox Communications Inc. and Comcast Corp. and dozens of smaller service providers, broadband is set to take off nationwide, and here in OC.
Part of that growth is made possible by the work of OC businesses, which have positioned themselves at the heart of the high-speed revolution.
It starts with companies like Broadcom Corp. and Conexant Systems Inc., two of the biggest chipmakers in the high-speed networking market. Their semiconductors are the building blocks of high-speed service.
“Orange County is playing a very major role,” said Nick Burd, director of Conexant’s DSL division. “Between ourselves and Broadcom, the area is ideally positioned to benefit from what’s taking place in the market in terms of the demand for broadband services. The need for speed is clearly there.”
Broadcom has its hands in almost every form of broadband around, designing chips used in cable TV set-top boxes, cable modems, digital subscriber line equipment, wireless networking gear, office networks and satellite connections.
The company, already dominant in the home and business markets, has been on an acquisition run, including its two most recent purchases, Mountain View-based BlueSteel Networks and Atlanta-based Digital Furnace Corp.
Conexant,Broadcom’s cross-county rival specializing in networking and DSL chips,has been on a shopping spree of its own with the purchases of Maker Communications, Microcosm Communications, and Oak Technology. The buys shore up Conexant’s expertise in network processors, fiber optics and wireless broadband networks.
Both companies sell to makers of networking equipment and specialized modems used for high-speed connections. Customers include Pacific Bell, Cox, Comcast and a host of smaller access providers throughout OC that are scrambling to meet subscriber requests.
At Forefront of Trend
A recent report from SBC Communications mentioned a 100,000-subscriber backlog for DSL services, and other broadband providers report similar demand.
“Orange County was one of the first areas we launched our Internet service and still has one of the highest penetration levels of any system in the nation,” said Kip Simonson, marketing vice president for Cox’s local Internet operations. “As a county, we’re probably further along than the rest of the nation.”
Though overall penetration rates are low now, most of the county now has access to some sort of broadband. Once services become widely available in all areas, observers expect demand to surge.
According to market research firm Cahners In-Stat Group, almost 9 million individual subscribers worldwide will have broadband connections by the end of this year, a number that could jump to nearly 49 million by 2003.
Competition between DSL and cable providers, a dispute once confined to online bulletin boards and Internet-savvy technicians, has gotten more intense with television commercials aimed at mainstream consumers.
But at current growth rates, there appears to be room for more than a few players. Huntington Beach DSL provider Flashcom Inc. recently snagged $84 million for its national launch, and even contractors like Telecore Inc., which focuses on DSL installation for regional phone providers, are profiting from growth in demand.
Getting A Piece of the Pie
Other infrastructure companies are supplying components used in high-speed corporate networking and equipment used by Internet access providers. Entridia Corp. of Irvine recently snagged $15 million toward developing high-speed routers, which manage data flow, giving preference to high-bandwidth applications such as streaming multimedia and phone calls placed over the Internet. Similarly, Irvine-based NewPort Communications (no relation to Irvine-based Newport Corp.), makes specialized, low-cost components for fiber-optic networks.
PairGain Technologies Inc., whose employee roster once included Broadcom founders Henry Nicholas and Henry Samueli, makes equipment used in DSL networks. The company is being acquired by Minneapolis-based ADC Telecommunications Inc.
But once all the broadband pieces are in place, users are going to want to use that bandwidth for something. Some OC companies are getting an early jump.
Content creators are positioning themselves to be ready when wide broadband penetration becomes a reality and users begin watching movies, making phone calls and listening to their favorite radio stations on line.
While some of that is already happening with standard dial-in connections,take the controversy generated by the MP3 audio format,anyone who’s tried downloading multimedia clips or making Internet telephone calls knows that the experience is far more enjoyable with a high-speed line.
Riding Coattails
From the number of Internet content companies popping up in Los Angeles, it appears Hollywood will continue to rule the entertainment arena. But several OC companies are hoping to ride the area’s coattails or provide the back-end technology to make online entertainment a reality.
SRS Labs Inc., the Santa Ana developer of sound-enhancement technologies run by AST Research Inc. co-founder Tom Yuen, hopes to make its SRSWOWcast site an entertainment destination. The company is trying to create an online hub for artists and recently signed a deal with Mandalay Sports Entertainment for original programming on sports stars and other celebrities.
AudioRamp.com, a Tustin firm headed by Yuen’s fellow AST co-founder Safi Qureshey, has created an Internet-ready personal stereo that automatically transfers music over the Internet to listeners’ favorite machines. While users can operate the device on ordinary phone lines, company management says the system will fly on a broadband connection.
And less than eight months after launching, Irvine’s www.com already has become the web’s second-most popular music broadcast site, behind Yahoo’s Broadcast.com. Like AudioRamp, the service runs acceptably on ordinary connections, but shines at higher speeds.
Last month the company spun off a Los Angeles-based operation called CODEC.com (the name comes from a common abbreviation of code/decode) to focus on the technology behind broadcasting sound and video over high-speed connections.
eSynch Corp. of Tustin performs a similar service, helping other content providers to stream sound and video over the Internet by encoding and hosting the multimedia stream. And Odetics Inc., a broadcasting equipment maker not known for its dot-com business, is hoping to ride the broadband wave with a system that helps traditional broadcasters put their content online.
Irvine-based Digevent and Lake Forest-based VideoScape.net are taking the process a step further by producing broadcast events and integrating them with web-based content. Digevent officials are generating revenue by producing things like online press conferences, but officials hope to make money from a series of original programming. To that end, the company hosts shows on everything from personal finance to playing guitar.
A gigantic question mark hovers over Broadband Interactive Group, the well-funded joint venture formed last year between Broadcom Corp. and Gotcha International. The project, which is supposed to produce content catering to the extreme sports crowd, has yet to launch, and neither company is giving further details about it.
Pratical Applications
Flashy multimedia isn’t the only use for broadband. On a more practical level, services like remote networking and remote software hosting are putting the network back into the Internet.
FutureLink Corp., which moved to OC late last year, is an application service provider, a fast-growing industry segment. ASPs host common software that is accessed remotely by customers, typically over high-speed Internet connections. So instead of, say, storing a copy of a company’s accounting program on a local hard drive, users can access FutureLink’s servers instead, utilizing the software as usual from on-site PCs. The idea is designed to save money on maintenance and upgrades by leaving technical tasks to third-party experts.
Personable.com, funded by and aligned closely with Kingston Technology Co. Inc., wants to be an ASP for the masses by renting out popular software such as Microsoft Corp.’s Office suite to individuals and small businesses.
According to Cahners In-Stat, ASPs will be one of the most lucrative businesses to stem from broadband applications.
The sense of mobility engendered by remote hosting could be move a step further by wireless broadband providers, who hope to persuade users to cut the cord entirely.
Powerwave Technologies Inc. makes signal-boosting equipment that cellular phone providers are using for new wireless Internet services. And STM Wireless Inc. provides broadband Internet service for other access providers via satellite.
Microsemi Corp., Santa Ana, makes a variety of components used in high-speed wiring, cellular phones, microwave devices and handheld PCs, all of which are parts of a wireless broadband infrastructure.
“I think growth is going to be sustainable for many, many years,” Conexant’s Burd said. “The ability for people to put marketing plans together and put broadband in front of people in various forms and guises is limited only by the imagination.” n
