Late last month, we visited the Western Cable Show, traditionally one of the industry's two big shows. Cable shows of the past were amazing -- especially for anyone who came out of a telco background. As befit an industry which was as much about content as it was about delivering it, shows were filled with all the glamor and glitz of Hollywood. The convention floor included provocatively attired models from adult channels, celebrities signing autographs, beer and wine flowing freely, energetic young things from the outdoor channel climbing ersatz rock walls, and evenings full of competing parties.
Of course there was technology stuff too, and over the last few years it grew in scale and scope. But content was the backdrop against which everyone came, built and renewed relationships, in the family industry that cable had been. Those days are gone.
It wasn't only 9/11 and the down economy that caused the change. Industry consolidation played a huge role. If you can personally visit a handful of key decision makers to sell your products, why spend lots of money selling yourself and your company to people who don't pay your bills?
WCS attendance was down 48% over last year and the organizing committee has the challenge of determining whether and how to go forward.
Despite that gloomy description, lots still happened at this years' show. Although the specifics are about cable, many of the technologies and vendors cut across the larger context of broadband. Much of this year's show was about formation of the value chain for the next stage of industry development. Many told us that while they hadn't had much opportunity to sell to cable operators, they were delighted to be doing business development with other vendors exhibiting and attending. For some of those present, the big issues were surviving until the next show and how to get real revenues and the next round of funding.
Cable's Magic Trick: How Bandwidth Keeps Growing
How much life is left in the cable plant? There's been lots of discussion, both in this newsletter and in debates with fiber providers who think that fiber to the home is the only way to offer the full range of digital services in the future. While we remain convinced that anyone building in a greenfield environment should have their heads examined if they don't use fiber, the reality in North America is that cable passes the vast majority of residences and that over the past five years, cable operators have made large investments in upgrading and rebuilding their physical plants. Although fiber deployments are happening in new communities, it's hard to see how anyone could get the funding to build a new FTTH plant in North America, where telephone and cable company wires each pass almost all homes and most families already subscribe to both.
But how will cable operators deploy all the new services and accommodate the growing traffic which eat up their bandwidth resources? How will they carry increasingly symmetrical services in the face of limited upstream bandwidth?
While we were at the Western show, we looked at several developing technologies designed to expand the digital carrying capacity of existing cable plants and came away thinking that cable operators may be able to get enough extra capacity to phase in a lot more digital services over their existing cables.
This magic trick of creating more bandwidth comes from three technologies, and have a multiplicative effect. The first (BigBand) addresses broadcast video and increases the channel carrying capacity of existing digital multiplexes; the second (Narad) moves data services away from the traditional cable bandwidth and claims to carry additional gigabits per second over the existing physical plant; and the third (Rainmaker) claims to double the efficiency of any service through wavelet modulation.
BigBand Networks - Squeezing more video into existing channels
At the show, we met with Sylvain Riviere of BigBand Networks, which provides technology to make better use of the bandwidth assigned to current digital broadcast multiplexes.
Today's digital cable multiplexes are created by taking existing multiplexes from satellites and combining them with individual digital and encoded analog channels. With today's technology, this requires separate boxes for each incoming and outgoing multiplex, and complex and often manual systems to keep track of the channel assignments.
BigBand has a line of "broadband multimedia-service routers" which cable operators use to carry broadcast-quality video, audio and data throughout a cable system's backbone network. These routers move all the de-multiplexing and re-multiplexing into a single box, with a management software suite that includes dynamic control of variable bitrate encoding to fit more channels in a fixed bandwidth, and scheduled changes of channel assignment.
Sylvain discussed with us some additional methods they plan to add to their software. These promise to further increase the carrying capacity of existing channels for broadcast and on-demand video.
Narad Networks - Taking advantage of unused bandwidth
While BigBand squeezes more digital video into the existing channels, Narad Networks moves other IP services out of the bandwidth assigned for traditional cable delivery and into unused portions of the cable frequency spectrum.
In North America, the typical "hybrid fiber-coax" (HFC) cable plant assigns the bandwidth from 50 to 750 or 860 MHz to "downstream" delivery (from the cable system to the home) and assigns 5 to 35 or 42 MHz to "upstream" delivery (from home to the cable system). This bandwidth allocation works fine for television services, but is a problem for data services (which share the bandwidth with other cable services). The allocation is not only highly asymmetric (much more bandwidth is downstream than upstream), but even worse the upstream bandwidth is comparatively noisy; thus fewer bits can be transmitted per Hertz upstream than downstream. As more homes install cable modems, cable operators are forced to limit the upstream data rates even as users want to share music, digital photos and videos with their family and friends.
Narad's approach is to carry switched IP services in the bandwidth above the high end (750 or 860 MHz). Since cable amplifiers don't transmit the higher frequencies, Narad replaces them with combined amplifiers and GigaBit Ethernet switches. The amplifiers handle the lower frequencies in the traditional way, while the switches handle bidirectional data.
Narad's "Virtual Fiber Architecture" offers two options for switched IP services. The first uses the bandwidth from 860 MHz to 1 GHz to derive bidirectional 100 Mbps ("Fast Ethernet") service; the second uses 1 to 2 GHz to derive bidirectional 1 Gbps ("Gigabit Etherner") service. They claim that both will operate on existing cable plants without any effect on existing cable services running below 860 MHz.
Narad's approach, when and if proven by upcoming field trials, promises cable operators that they will be able to provide switched Ethernet services to business and residential customers without having to rebuild the physical cable plant (but needing to replace the amplifiers and other boxes between cable segments).
Rainmaker Technologies -- Getting more bits from existing bandwidth
Any approach to transmitting data -- whether video, voice, or data -- depends on a modulation scheme. In North American cable systems, the downstream modulation is either 64 QAM or 256 QAM, which operate in 6 MHz channels at 30 and 40 Mbps respectively. The ratio of bits per second to Hertz is the "efficiency" of the modulation scheme - thus their efficiency is about 5 and 6.5 bits per Hertz, respectively.
At the show, we met with Paul Chin and Mark Laubach of startup Rainmaker Technologies. Rainmaker proposes to use wavelet modulation rather than the traditional QAM modulation, and to operate digital services in wider channels than the traditional 6 MHz allocation. They claim that this approach will provide 170 Mbps downstream in 18 MHz (combining three 6 MHz channels) and 100 Mbps upstream - at a cost similar to today's DOCSIS modems operating at much lower data rates. This provides an efficiency gain of nearly 2:1 downstream and 4:1 upstream.
Rainmaker's modulation approach, when and if proven, applies both to traditional services carried in the existing bandwidth, as well as to new services such as those proposed by Narad. While their emphasis to date has been on cable, they are agnostic as to type of broadband access - the same modulation approach could be applied to DSL, fixed wireless, and satellite delivery of broadband services.
A note of caution: Narad is just about to roll out its first trial systems so we'll need to stay tuned on how well they actually do in the field. Rainmaker is even further from actualization -- they are seeking funding to build units and run trials. Other companies are also active in this "bandwidth magic" space and we'll be tracking how they do in the harsh real physical world.
Interactive Content: The Bandies
Although the Western Show is increasingly dominated by technology, the creative side of new media was highlighted by one mini-Hollywood-style event. The Bandies is an annual awards show, started last year by the efforts of a small group led by Michael Collette, formerly at ICTV (still a marquee sponsor) and now an SVP at OpenTV. The event is put together largely by volunteers from the industry and recognizes excellence in interactive content. Awards were given in such categories as best two-screen content, best enhanced TV content, killer app and newest new thing. The awards have their own Oscar-type trophy: designed by artist Al Honig, the trophy isn't the familiar knight standing on a reel of film, but instead mimics the shape of a TV remote.
We strongly support the Bandies efforts to promote really great interactive content. From the limited clips we saw during the awards, the industry is still taking its first baby steps toward producing such content. To be fair, we suspect that judging interactive content and applications by viewing short video clips is akin to judging a movie by still photos of a few frames. For the record, we really liked Karaoke by Oddcast.
An interesting postscript: After the awards, we left the theater to have a late dinner. As we got into the only visible taxi, we were approached by a couple of people also leaving and agreed to share the cab with them. During the ride, they told us that they'd been contestants, and said we really couldn't appreciate their application from the clip that was shown. In the back of the cab one of them proceeded to pull out his PC and demoed the real thing for us, while the other continued to sip the drink he conveniently still had in hand! They were clearly the creative types the industry hopes to attract!
Migration to DOCSIS 1.1 -- Underpinnings for new revenue
We've written before about DOCSIS, the standardized and now dominant cable modem technology in North America. As readers will remember, the original DOCSIS 1.0 has been superseded by DOCSIS 1.1, which adds QoS and the ability to carry tiered services. While the 1.1 standard has been around for some time, the first DOCSIS 1.1 cable modem termination systems (CMTSs) and cable modems were approved by CableLabs only recently. (See "Cable Broadband Maturing" in BBHR 11/14/2001 for more on DOCSIS 1.1 and new services.)
At the Western show we talked to several companies to get a feel for how long it will take to get the 1.1 technology out in the field so operators can start generating new revenue from its features.
Cadant Inc. -- A "carrier class" DOCSIS 1.1 CMTS
We talked with Tim Doiron of Cadant, whose C4 CMTS was specifically designed for DOCSIS 1.1 and its services. The Cadant C4 was one of the first two CMTSs recently "qualified" by CableLabs.
Primary telephone service is the most important new revenue stream enabled by DOCSIS 1.1, and it's no surprise that Cadant is based in the Chicago suburbs -- home to many telephone switching companies -- and that its lead technical staff come from Bell Labs. Lots of companies use the term "carrier class" and it has started to feel like so much marketing fluff; unlike some others, we suspect that these claims will be justified by Cadant's product.
Cadant's equipment is already installed at several major cable operators, and we expect to see major deployments of IP-based telephone service next year.
In last month's issue, we observed that the "next generation head-end equipment" suppliers were being acquired at a rapid pace by established infrastructure providers to provide QoS and advanced services. Cadant was the last of the independents.
At the Western show, Cadant and ARRIS announced an "agreement in principal" for ARRIS to acquire Cadant. ARRIS is the leader in "HFC" (circuit-switched) telephony over cable and makes the other CMTS qualified for DOCSIS 1.1.
We think this acquisition is good for the cable industry. It combines Cadant's technology with ARRIS's respected position, installed base with major MSOs, and widespread sales organization. The combination promises to accelerate the rollout of DOCSIS 1.1 CMTSs and the launch of new services.
Will Cable Modems Be Ready?
More than two years elapsed between the publication of the DOCSIS 1.1 specifications and the certification of the first compliant modems. During this time, many modem vendors introduced products which were said to be "upgradeable" to DOCSIS 1.1. We remember that some of the pre-DOCSIS 1.0 modems proved not to be upgradeable, so we were interested in what the key vendors had to say about the reality of 1.1 upgradeability.
At the show, we met with Chris Boring of Toshiba , whose DOCSIS modems are widely deployed by the cable industry and which makes one of the two modems certified for DOCSIS 1.1. Chris told us that Toshiba has shipped about two million DOCSIS 1.0 modems, and that 1.6 million of these (80%) can be upgraded to 1.1. Toshiba plans to put the earlier modems in for certification with 1.1 firmware -- once they are certified, Toshiba can upgrade existing modems to 1.1 with a firmware download.
We also talked at the show with Dan Moloney of Motorola , which also has a large installed base of DOCSIS 1.0 modems. Dan said that around 80% of the Motorola 1.0 modems could and would be upgraded to 1.1 once their new firmware has passed certification testing.
We found these discussions very encouraging. While some DOCSIS 1.0 modems (including many from other vendors) cannot be upgraded, we believe that the majority can be upgraded with a firmware download. Therefore many homes (three million between Toshiba and Motorola alone) already have the equipment to receive the new services once DOCSIS 1.1 CMTSs are deployed.
CedarPoint Communications - Simplifying new telephone service
We observed earlier that telephone services are the most promising source of new cable revenue. While some operators (such as Cox and AT&T Broadband) have rolled out circuit-switched "HFC" telephony, others decided to start with packet-switched telephony and have been waiting for DOCSIS 1.1. Now that 1.1 is ready, operators will need to decide which systems to deploy to support telephone service. The 1.1 CMTS is an important component but provides only the transport; many other systems are required for full-blown telephone service.
At the show, we met with David Spear, CEO of startup CedarPoint Communications. CedarPoint thinks that the full array of systems for cable packet telephony is very complex, and has created what they believe is a new category of equipment to simplify deployment. Their Cable Media Switching Systems integrate all the functionality for cable telephony -- both packet and circuit-switched -- into a single box. Instead of buying each subsystem from a different vendor and integrating all the systems, the cable operator can buy a single standards-based package from CedarPoint. Once proven, this approach should make it much easier for operators to start to generate new revenues from telephone services. If CedarPoint is correct about the need for such an integrated system, expect to see other vendors challenging them in this space.
As with many other vendors we met at the show, CedarPoint is access agnostic. While they're focused on cable, their technical approach is applicable to any form of residential broadband access.
Network Management -- Keeping services working for the customer
In the previous issue, we expressed our concerns about cable plant reliability. We've been waiting a long time to see operators ready to install systems to provide the kind of availability expected for telephone service and for mission-critical business data services.
C-COR.net -- Tying the pieces together
At the show, we met with Paula Weaver, Doug Engerman and Tom Burke of C-COR.net's Broadband Management Solutions group. C-COR is a long-time player in the cable industry, and has been assembling a portfolio of companies to provide a comprehensive approach to network management.
We were very impressed with their demonstration of the new "COR-Convergence" network management system. It ties together all the pieces -- physical plant monitoring, data from SNMP MIBs, system maps, the billing and customer care system -- to do root cause analysis and link to dispatch to fix the problem.
They mentioned that the demo was based on a system currently in a field trial, and we couldn't help noticing that the map on the screen looked just like Tampa Bay. That's the flagship system for Time-Warner Cable, so it's a good bet that TWC will take the industry lead in deploying integrated network management systems -- as they have in many other technical innovations.
( www.c-cor.net )
We also met briefly with Stargus . Stargus is not attempting to build an integrated system like the C-COR system, but rather is building the element management system to process data from the DOCSIS MIBs (in our previous issue we mentioned that Stargus has brought together the key people who developed these MIBs). Their demo showed that poor system performance as perceived by the customer could come from two distinct causes: problems in the physical cable plant, or congestion caused by user demand exceeding plant data-carrying capacity. Their systems use a balanced approach to analyse both and isolate the cause. ( www.stargus.com )
In the new year, we plan to visit both C-COR.net and Stargus, and we'll report in more depth in a future issue.