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Democracy & Technology Blog New Life for Narad?

Back in 2001 I wrote about a technology company with a funny name that in a round-about way helped make the case for telecom deregulation. Narad Networks had developed sophisticated analog signal processing techniques that dramatically expanded the usable spectrum of the coaxial cables used in cable TV networks. With current analog and digital programming running from 5 to 860 MHz, Narad’s network updates would open the spectrum up to 1.2 GHz, boosting by 50 percent the already considerable capacity of the cable companies’ hybrid fiber coax (HFC) networks. Over this newly available spectrum, Narad could run Gigabit or even 10 Gigabit switched Ethernet trunks, enabling dedicated switched Internet services of 10, 50, 100 Mbps — whatever — to homes….Or to small and medium sized businesses currently served by the telephone companies.

Although most businesses are not wired for cable TV, Narad’s research showed that cable networks pass some 70 percent of the nation’s several million SMBs (small and medium businesses). Short runs of coaxial cable or wireless links from telephone poles could easily connect businesses as they signed up. The cable companies already compete in the enterprise market with CLEC leased lines and dedicated fiber connections (e.g., Time Warner Telecom, Cox Business Services), but now they could easily leverage their own existing coax networks and compete with the phone companies for the SMB communications market totalling some $35 billion a year.

Narad, however, struggled during the telecom crash, as all communications providers who didn’t go bankrupt severely curtailed capital investments. The company founders, Dev Gupta and Andy Chapman, left, the company almost ran out of money several times, and management continued to turn over. Many of us lamented the surely imminent demise of this innovative company.

Several CEOs and tens of millions in new venture funding later, however, Narad said in late July that Cablevision, New York’s main cable TV provider, had successfully trialed its system and would begin offering the new broadband business services in Oyster Bay on Long Island. Narad has also had some success internationally.

Although the cable companies are still digesting and leveraging their recent $100 billion digital upgrade and have not yet taken the plunge on Narad-like broadband upgrades, cable’s potential to compete with the phone companies in the mid-range telecom services market is now clear. The phone companies want to offer video. The cable cos want to offer voice, data, and “storewidth” services. Federal, state, and local officials should be telling them: Go for it.

-Bret Swanson

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.