Switch is on for Cox, Time Warner Cable

While switched digital video is picking up steam this year with cable operators such as Cox and Time Warner Cable, it’s not reaching critical mass like digital simulcast deployments did last year.
 
Some of cable’s top chief technical officers chatted about industry matters during a panel earlier this week at the NCTA National Show in Atlanta and switched digital video (SDV), also known as switched digital broadcast, was one of the topics. One of the primary benefits of SDV is that it frees up bandwidth because it only delivers the channel a customer is viewing. Customers in the same node who are watching the same show, such as an episode of "Desperate Housewives," are grouped together. A trail by Time Warner Cable in Austin, TX, found that only 45 out of 170 channels were being simultaneously viewed in a service group of 1,000 homes. The rest of the 125 channels occupied spectrum while being unused by subscribers. By creating virtual programming with SDV, bandwidth that is saved can be used for other services such as high-speed data, VOD, VoIP and HDTV. During the panel discussion, TWC CTO Mike LaJoie said his company has SDV deployed in Austin; Columbia, SC; and a third unannounced system. He said it will be in four to six systems next year and that the bandwidth savings thus far have exceeded 50 percent. "We’ll be more aggressive next year. It’s not that hard to do," he said. LaJoie said today’s VOD is a switching architecture and that SDV provides a faster channel change for subscribers while being transparent to them. Cox CTO Chris Bowick said his company trialed SDV several years ago and is working with TWC on the technology. "There’s not a sense of urgency like there was with simulcast," Bowick said. "We’ll probably be in two markets (with SDV) this year. We’d like to go faster, but we want to get it right." Comcast‘s Dave Fellows said while SDV was "very important," Comcast is content to ride in the slipstream of Cox and TWC this year. Rogers CTO Dermot O’Carroll said his company has played around with switched digital in the lab and plans to have market trials this year. "We’ll se how well it scales and then launch it everywhere," said O’Carroll, who added that a company-wide launch could be next year. Fear of competition not a factor Moderator Leslie Ellis asked the panel if it thought the cable industry was being hurt by telcos. "Tremendously hurt," Fellows quipped, "They have 95 percent of my phone customers." When asked about fiber vs. HFC, LaJoie said cable currently has an advantage for one reason; "because it (HFC) exists." "They (telcos) have a bigger piece of the pie for us to go after," LaJoie said. "It’s going to take a long time (for telcos) to dig up 42 million yards." Bowick said Cox had the opportunity to start from scratch in its New Orleans system after the hurricanes, but after evaluating fiber-to-the-home and fiber-to-the-curb opted to stick with HFC. Bowick said one advantage cable has over DBS is the ability to bundle customers, while LaJoie said DBS providers talk about HD channels because that’s "all they have to talk about," but also noted that the competition "has raised the bar for all of us." LaJoie was even more to the point when asked about IPTV.  "It’s a buzzword like freakin’ fiber," he said. "It’s a silly discussion. Who cares how it gets there?" HD-DVRs in Demand A variety of topics were discussed during the panel. LaJoie said downloadable conditional access "is the sleeper, but very important." Fellows said Comcast’s Residential Network Gateway set-top box, which is part of its RNG initiative, would cost under $100 after additional memory was added for OCAP and DSG, along with advanced codecs. The box was originally slated to cost $50. Fellows said Comcast would add about 10 points of digital penetration this year. Comcast anticipates that 45 percent of its boxes are SD, 35 percent are HD-DVR, 12.5 percent HD and 7.5 percent SD-DVR. Bowick and Fellows acknowledged there was a shortage of set-top boxes at their companies at one point this year, but said that was due to Cox and Comcast underestimating the demand. TWC was able to meet the demand because of an aggressive forecast. While the shortage is over, all four of the panelists said HD-DVR set-top boxes were in the highest demand from customers.