TORONTO – Keying off an internal CableLabs research paper, a Wall Street Journal report said yesterday that cable operators may need to spend billions on more rounds of network upgrades.
The newspaper story (subscription required) quoted the leaked document from Cable Television Laboratories – the cable industry’s R&D and specifications arm – saying that broadband video growth at places such as Google and YouTube, coupled with the multibillion-dollar spend by Verizon to get fibre to the premises and roll out digital television, will require CableLabs members to dig into their wallets for yet another rebuild.
The story also printed grouchy-sounding reaction from the CTOs at Comcast and Time Warner Cable, who refuted the CableLabs report’s findings and the reporter’s premise.
Canadian CableLabs members include the likes of Rogers Cable, Cogeco Cable, Shaw Cable, Mountain Cable and others. Rogers Communications chief strategy officer Mike Lee told Cartt.ca that the WSJ report was wrong and that Rogers has no rebuild plans anywhere near a drawing board.
"The cable industry has always wanted to add more capacity and historically, the way to add more capacity has always been through rebuilds," said Lee. But most of Rogers systems are now 860 MHz which "represents about five gigabits into the home."
And as more channels are added – even additional high definition channels, not to mention a DOCSIS 3.0 upgrade on the data side and a rapidly growing number of voice over IP customers – "we have a number of different levers to pull on from a technology perspective to pull on to open up more capacity," said Lee.
Technology like switched digital and MPEG 4 and moves such as analog repatriation and increased node segmentation will ensure enough capacity for anything, as far as Rogers can see, said Lee.
"The CableLabs report projected out with very generic assumptions and didn’t take into consideration all of the options in its projections," he added.
Lee conceded that the pressure on U.S. cable operators is greater right now than on Canadian MSOs, given the aggressive build out by Verizon of its digital TV and high speed Internet broadband plant. The huge American telco is pushing fibre right to the premises (FTTP), so that the only copper links are in the home. The pressure to respond to such a build out doesn’t exist here.
"The regional telephone companies (in Canada) are not on a fibre to the premises plan," said Lee
"We are well protected and will be able to deliver a premium product under any circumstance… we have more than sufficient number of tools and existing capacity that the 1 GHz rebuild is not even an option on a list. It’s not discussed at all."
As for CableLabs itself, it responded to the newspaper story on its report thusly:
“The report shows that no major investment is needed for cable to compete with FTTP networks. In addition, the document suggests a long range approach to address the potential future competitive demands on the cable network into the next decade. In this context the report postulates a very speculative scenario. However, the report counsels an evolutionary, cost effective approach to development and identifies network components (i.e., CMTS) that will now follow a volume-based cost reduction curve. In the next decade, equipment and network costs will certainly be reduced and alternate technologies developed to meet consumer demand and wring even more capacity out of today’s fiber-rich cable networks.
"Cable operators have several tools at hand – including switched digital video and digital simulcast – to allow for evolutionary, non-capital intensive expansion of bandwidth to meet the services that FTTP networks can deploy well into the next decade. For example, the report demonstrates that by using switched digital techniques, cable operators can meet broadband demand past 2010 and provide a user experience similar to that of a FTTP broadband user – all at 25% of the cost of FTTP."
