Total Rebuild Isn't Always Necessary

As a cable operator, you are probably under great pressure to provide more channels and revenue-generating services to retain your existing subscriber base and attract new customers. These new services consume bandwidth, so systems quickly become channel locked and unable to support new analog or digital services, such as Internet access, video on demand (VOD) and high definition TV (HDTV). You essentially are trying to fill the same pipe with more content, and that inevitably will lead to the need for a network upgrade. However, a network upgrade doesn’t have to be an overwhelming capital expenditure. There are ways to optimize your infrastructure and increase bandwidth without carrying a huge deficit on your books. But let’s look at the traditional method of upgrading a network first. The complete upgrade This approach usually involves a near-total network rebuild, replacing amplifiers and passive components, including the replacement of older 450 MHz or 550 MHz amplifiers with 750 MHz or 870 MHz amplifiers. This also results in the need to change spacing and often passives throughout the network. The strand and cable usually are left intact, although a percentage of the cable may have to be replaced. This has a number of drawbacks. For one thing, it is time consuming from start to finish. In the face of competition from direct broadcast satellite (DBS) and overbuilders, not to mention franchise pressures, time is of the essence, yet a complete rebuild is lengthy. Second, it will take years to pay off this large capital investment. You have to wait until the new network is complete before you can start generating new revenues (through offering new services) to pay off the capital expense. And by the time you realize your return on investment (ROI), it may very well be time to overhaul your network again. The "previously enjoyed" approach If you are determined to rip out and replace your entire infrastructure, it can be done for slightly less capital spending if you are willing to use refurbished components, which are readily available. However, this really doesn’t alter the drawback of the rip and replace approach because the savings from using refurbished equipment and components is only a drop in the bucket of the overall cost of a complete network overhaul. It still will consume much of your time and resources, require heavy capital funding and possibly interrupt subscriber services. It also will mean a delay in rolling out new services that generate revenue for you, which means you still are looking at a long ROI cycle. It is most important to note that a complete network overhaul, whether with completely new or refurbished equipment and components, is not always necessary, even if it is the conventional wisdom. Do it quicker, for less: The amplifier upgrade A better, more cost-effective option is a smaller capital expenditure that enables you to deliver more services quickly-it’s known as a "drop-in amplifier upgrade." There are several benefits to the drop-in amplifier upgrade approach. It can utilize existing 450, 550 or 750 MHz amplifiers and increase the forward upper bandwidth limit respectively to 550, 625 or 860 MHz while adjusting operational gains so the amplifiers retain their current position in the network without the need to re-space. No new connectors are required, and only rarely are increases in power supplies necessary, which immediately reduces the cost of the overall endeavor. (Passives should be sweep tested to determine their upper frequency limit. Some older 600 MHz-capable passives may not work well at 750 or 860 MHz.-Ed.) A drop-in amplifier upgrade project is also easier to implement: The amplifier modules are taken from their housings and replaced with modules that have been bandwidth upgraded, aligned, tested and, if desired, return path activated. The benefits of drop-in amplifier upgrades are numerous. First and foremost are the financial considerations, among others: Today’s service-driven market requires that cable operators be nimble in offering and implementing enhanced broadband products. Time to market is especially important in countering competitive offerings from digital subscriber line (DSL), overbuilders and satellite providers. A drop-in upgrade is by far the quickest way to get Internet, VOD and other services up and running. In many cases, a drop-in amplifier upgrade is the only cost-effective and timely solution to achieving increased channel capacity to generate additional revenue streams. From both an economic and timeliness standpoint, drop-in amplifier upgrades have proven to be effective in achieving the higher forward and return bandwidths needed to offer expanded programming and other revenue-generating services. The hybrid approach Of course, there is always the pressure from your technology staff that "shiny and new" is always better, but that pressure must be balanced with the business drivers you face, particularly competing services and subscriber demand. For one thing, a complete overhaul can trap you in a negative cycle of sizeable capital projects every several years. By the time you start reaping dividends from one network overhaul, it’s time to start all over again. There will be situations where some equipment does need to be ripped out and replaced. But this too can be done in an incremental approach in conjunction with a drop-in amplifier upgrade. There is a compelling reason to take this approach, especially if you must finance replacement of any or all of your network infrastructure: A drop-in amplifier upgrade will translate into the ability to deliver new services quickly. The revenues generated by these services then can be taken and applied to the capital expenditures of a new equipment upgrade of a portion of your infrastructure if and when it is absolutely necessary. In addition, it may make sense to go with amplifier upgrades in certain areas where increased bandwidth is required but it is hard to justify a complete rebuild. This is particularly true for providers serving rural markets-a drop-in amplifier upgrade can help to increase revenues and maintain market share against competitors in those areas without a hefty capital investment. Given the rapid growth and consolidation in the cable industry, this approach is ideal for operators that have inherited infrastructure that needs to be upgraded for more bandwidth. However, it goes against a well-established mindset that a complete rip-and-replace overhaul is the "only" way to upgrade the infrastructure to compete and offer new services. Not questioning this mindset, however, means missing an opportunity to remain competitive while on a tight budget. By applying the drop-in amplifier upgrade approach in places where it provides an immediate pay-off, you can finance the more expensive upgrades over time while growing your subscriber base and maintaining service quality. Decisions, decisions Ultimately, optimizing your network is not just a technology decision; it’s a business decision as well. And by insisting on having a state-of-the art network for your flagship system, it may no longer be feasible to put resources into the rest of your systems. Again, the mindset that shiny and new is the best for your business and subscribers can cloud the fact that an amplifier upgrade approach can be the way to go to optimize your entire infrastructure and continue to compete effectively in the marketplace. Audley Alexander is president of CableServ. E-mail him at [email protected].