CableLabs Delays Next DOCSIS-Testing Wave

Cable Television Laboratories Inc. is giving modem
manufacturers more preparation time for the next round of interoperability testing, as
last round's winners move quickly to leverage their certified status.

The eighth testing wave of modems submitted for
certification under the industry's Data Over Cable Service Interface Specification
standards will begin March 22, instead of today (March 15), as originally planned.

CableLabs pushed the schedule back due to vendor feedback.
Manufacturers indicated that they did not believe that they had enough time to receive and
review the ream of results released March 3 from wave-seven testing, to resolve their
shortcomings and to upgrade their product in time to submit it for the next testing round.

"Our process is an open process in which we always
listen to the vendor community and listen to our members and do the best that we can to
work with them," DOCSIS project leader Rouzbeh Yassini said. "It's working
together to improve the efficiency of the process, to get more vendors certified on the
next go-round."

CableLabs will add an extra week to the interval between
each of the four-week-long certification waves planned for the rest of this year, while
reducing the number of remaining waves to five from six to make up the time.

In its first certifications, modems submitted by Thomson
Consumer Electronics and Toshiba America Consumer Products met DOCSIS 1.0 standards -- the
protocols for determining that modems and headends from various manufacturers work
seamlessly with each other.

Interoperability is expected to eventually pave the way for
widespread retailing of cable modems, as consumers are assured by the industry
certification that their equipment is portable from one service provider to another.

The actual number of vendors submitting equipment for wave
eight will be determined at Wednesday's (March 17) deadline. So far, the seven
companies that failed wave seven have indicated that they would participate, and up to
eight others involved in the process so far can apply for certification.

On schedule is CableLabs' process for qualifying
headend cable-modem-termination-system equipment submitted for DOCSIS testing, Yassini
said. Results on equipment submitted by 3Com Corp., Cisco Systems Inc., Motorola Inc. and
Nortel Networks are expected to be released March 22.

Meanwhile, as preparation for further testing continues
elsewhere, the first two DOCSIS 1.0-certified vendors hit the marketing gas and signaled
for production ramp-ups almost immediately after getting the March 4 certification news.

Fred Berry, Toshiba's director of product marketing,
said the company sent letters to 100 MSOs the day after certification, apprising them of
the news. He added that Toshiba has been "flooded with calls" seeking
information about its PCX-1000 modem.

"We're really like a coiled spring, being ready
to deploy product to retail," Berry said.

The company had stepped up production in advance of
certification, with shipments of upward of 10,000 units just before and after the results
were disclosed.

Thomson said it held off on boosting production before
certification, having produced about 10,000 "compliant" modems beforehand for
sampling and trials by major MSOs, but it plans a rapid ramp-up of certified product.

"We have very big runs planned going into next month
and the month after," said Carl Bruhn, general manager of Thomson's broadband
group. "We'll be able to produce more than the industry orders."

Thomson's plant in Juarez, Mexico, has annual
production capacity of about 4 million units for digital set-top boxes, multimedia
monitors and cable modems, Bruhn said -- a scale that he contended will be necessary to
survive as the modem business increasingly depends on retail.

Bruhn noted that despite its accelerating growth, the modem
business was still relatively small -- probably too small for five to 10 major
manufacturers. This plays to the strengths of mass-market-oriented producers such as
Thomson, Sony Corp., Toshiba and other consumer-electronics-oriented players that are able
to price the market competitively with the confidence that they can win high-volume

"It's our intent to play big, and that's
what MSOs are looking for from us," Bruhn said.

Vendors still awaiting certification, while confident that
they can pass the next wave of testing, nevertheless may be feeling some pressure from
their customers.

Although broad retail-modem deployment is not expected
until late this year, the inability of such major vendors as 3Com and Nortel to become
certified has raised some eyebrows.

"One customer has told me that they're
concerned," said Oscar Rodriguez, vice president and general manager of Nortel's
broadband-technology division. "What I've been telling them is that Nortel
Networks is committed to certification and to getting them product, and I believe
that's been well taken."