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CABLE SHAPES UP! Members of CableFit #teamplatform at NCTA get ready to run a St. Patrick’s Day 8K road race, spanning the U.S. Capitol grounds and National Mall on March 9, (back row, l. to r.): Julie Hance, Ethan Buch, Frank Gallagher, Kristin Buch, Steven Morris, Lisa Hamilton, Scot Donaldson, Rob Stoddard, Rick Stoddard; (front row, l. to r.): Kelly Allers, Kat Stewart, Esther Song, Carleigh Blewett, Lisa Otto.  NCTA’s team finished 11th in a field of 54.

April 1, 2011

The Need For Greater Speed Shifts Into High Gear

Modems soon will be clocking speeds of 200 Mbps as cable and other service providers accelerate their quests for a viable three-stream strategy: upstream, downstream and revenue stream.

With residential and enterprise consumers alike demanding greater speeds, service providers — most notably MSOs — are integrating higher speeds deeper into their business models and developing innovative new technologies to do so. And, indeed, it’s speed that’s driving the technology and business engines, albeit with some formidable bumps.

“Companies want to exploit the speed advantage, but price is a sticking point,” says Mike Paxton, principal analyst/digital entertainment at the research group In-Stat. “Cable is probably the biggest benefactor of higher speeds. The mentality is: More speed is better, and people understand that. It’s causing the telcos to scramble.”

New Downstream?

Such Tier 1 MSOs as Cox Communications and Comcast are doing some scrambling themselves to move the speed needle forward, particularly with the upstream.

“The paradigm shift is toward lots of consumption, so device manufacturers are treating the cloud as storage,” explains Jeff Finkelstein, senior director/network architecture at Cox. “That challenges us to come up with delivery opportunities, and means upstream is the new downstream. That’s what we now have to worry about.”

It also means a series of technical and strategic decisions are looming, he notes: “There’s growth with the upstream but there’s not a lot of upstream capacity when uploading videos, so it’s incumbent upon us that capacity in the network meets customer requirements. And upstream demand is very difficult to predict.”

Difficulties aside, breakneck speeds — both upstream and downstream — are changing traditional approaches to each.
According to Jack Moran, fellow of the technical staff at Motorola Mobility, “Clearly, speed is a key driver moving forward, and business application services are driving the need for more speed. If you’re talking 100 Mbps of true throughput, business can take advantage of that. But there’s a huge difference between residential and business.”

Motorola, he adds, is peeking beyond the 200 Mbps threshold: “We’re looking at modulation technology, speed breakthroughs and the cost impact, and it’s not insignificant.”

Cisco is in the speed mix as well, comments John Sweeney, the company’s manager of product management. “Near term, we’re bonding four channels in the upstream and looking to expand the upstream bandwidth. Cable operators are interested in the modems to take advantage of that upstream bandwidth.”

He continues, “Some are picking 5-megahertz-to-85-megahertz-capable modems and then re-aligning their networks to get more upstream capacity.”
And they’re looking for more speed, too. Comcast, for example, is pushing higher speeds into its residential and business services markets.

The Sweet Spot

“Speed has been the consistent driver. We’ve doubled DOCSIS 3.0 to 12 Mbps and to the extreme tier of 50 Mbps on the residential side, and 100 Mbps for enterprises. We’ve had to swap out some chassis and allocate different upstreams and downstreams, and balancing consumer interest and appeal with higher speeds is challenging,” a Comcast spokesman notes.
So where’s the sweet spot?

“We’re testing different speeds with different prices going forward. We want to be in the mix with the fastest tier options available,” he adds.

Finding that sweet spot is tricky. Says In-Stat’s Paxton, “We’re seeing increased demands for greater speeds from enterprise and some consumers, but we’re not seeing that 1-Gig speed demand from users. They are extremely reluctant to pay extra for bandwidth. Beyond those two segments, we haven’t found the sweet spot for higher speeds.”

At least not yet. With the growth of video and IP traffic, maintains Paul Crann, senior vice president/product management for BigBand, the sweet spot may be in sight.

“We’re seeing tremendous proliferation of video and IP traffic growth. Greater speeds are allowing for more advertising, faster development schedules and more pressure to efficiently manage bandwidth,” he points out. “And data rates are showing tremendous growth. Clearly, people are acting faster.”

And smarter, especially with what’s at stake.

“If we want to sell speeds at different tiers, we can determine how much speed and how much capacity we need,” Cox’s Finkelstein continues. “When we see certain thresholds being reached, we know we have to increase capacity. Today, there is no absolute space, time or platform, so that will dictate upstream speeds.”

Videocalling is the next big thing, he maintains, but with some caveats: "That will be a huge driver for upstream capacity. We don’t see it yet, but there are contenders.”

The favorite, concludes Paxton, is cable:  “Cable is having success pitching 3.0 services and greater speeds to the enterprise market, and the business model is changing. They are better-positioned to offer higher speeds.”

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