Dedicated bandwidth: Pulling it all together

Apr 3, 2002 12:00 PM

Cable system operators are introducing new services beyond analog video to increase revenues from their last-mile network. These new services are enabled by the $50 billion that U.S. cable operators have spent over the past seven years to drive fiber deep into their network. With billions of dollars of debt on their balance sheets, cable operators are now looking to leverage this investment into new areas of cash flow growth. Digital cable and high-speed data are two of the new services enabled by this upgraded plant. In the fourth quarter of 2001, U.S. cable operators were activating digital set-top boxes and cable modems at the rate of almost 5000 new subscribers per hour.

Beyond digital video and high-speed data, operators are looking toward telephony and video-on-demand to become revenue drivers. Cable operators such as Cox and AT&T Broadband have rolled out circuit-switched telephony on their coaxial cable plant, while other operators such as Time Warner Cable and Comcast have announced that they are waiting for voice-over-IP technology to mature.

Business services are also an emerging area of growth for cable operators. With more than 5 million small and medium-sized businesses (SMBs) passed by cable networks, these customers represent a revenue opportunity of more than $38 billion dollars in annual data, telephony and Internet spending.

Yet for all the new revenue opportunities open to the cable operator, there has been a corresponding increase in network complexity and operational cost. Today, the infrastructures to deliver digital video, high-speed data and telephony over the cable plant require the operation of three different transport mechanisms. New technologies, however, have now made it possible for operators to implement a dedicated, high-bandwidth IP connection to each customer. By moving to this unified transport platform, cable operators can continue to deploy advanced IP services while reducing operational complexity and cost, and simplifying the overall cable plant.

Divergent content, multiple technologies

The upgraded hybrid fiber/coax (HFC) cable network is a tree-and-branch architecture. Broadcast video and other interactive services are transported from the distribution hub to the neighborhood via fiber. In the neighborhood, the fiber terminates in an optical node, where the signal is then transported over the last few thousand feet over rugged coaxial distribution cable. A node typically can serve as many as 1500 homes or as few as 200 homes, with many operators averaging 500 homes served per node. Most of the upgraded plant in the U.S. is capable of carrying 750 MHz of data, with some of the newer upgrades extending to 860 MHz. Existing RF/digital modulation technologies can provide up to 7 bits of data carrying capacity per Hertz, for a total capacity of about 5 Gb/s of digital bandwidth per 750 MHz node. With each node serving approximately 500 homes, this equates to about 10 Mb/s of available bandwidth to each of the 500 homes served by the node.

Downstream signals in the U.S. begin at 54 MHz and can span up to 860 MHz. Upstream transmission from the subscriber to the operator's head-end is possible in the 5 to 42 MHz spectrum. The reason for this highly asymmetrical bandwidth is broadcast analog television that begins at 54 MHz with Channel 2. While the plant's upstream/downstream split could be made much more symmetrical, both consumers and broadcasters require cable to carry Channel 2 programming on their analog televisions. Moving to an all-digital television service could change this, as digital set-top boxes can re-map channel numbering easily.

With approximately 700 MHz of downstream capacity, the cable operator typically carries between 70 and 80 analog television channels. With each analog TV channel consuming approximately 6 MHz of bandwidth, the analog tier typically occupies the spectrum from 54 to 500 MHz.

Digital programming achieves a more efficient use of the available spectrum. Today, digital video is sent to subscribers using MPEG 2 transport, a form of one-way digital broadcast delivery. MPEG 2 compression enables as many as 10 video channels to be fit into a single 6 MHz channel. This is a 10 to 1 advantage over analog video. In 200 MHz of cable bandwidth, over 300 digital video and pay-per-view channels can be allocated.

With analog broadcast typically consuming 500 MHz and MPEG 2 video digital transport using 200 MHz, only a small amount of bandwidth is available for serving individual subscribers with on-demand services as shown in Figure 1.

Cable modems have been the leading technology available for data delivery since their introduction in 1992. This system provides a shared 6 MHz channel of bandwidth among many users, in some instances up to 2000 subscribers. While a shared architecture is effective for residential consumers and very small businesses, it is not practical for businesses with 10 or more employees or those wanting services other than pure data. The newest version of this technology allows the establishment of classes of service within a shared channel. Operators can manage the average bandwidth delivered to their customers by altering how many subscribers are placed on the shared channel.

To date, operators have not been able to offer business-class dedicated bandwidth services using their existing HFC networks. To offer dedicated bandwidth to businesses, most cable operators have had to build a direct fiber drop to the potential customer off their Sonet backbone rings. Cable operators must bear the cost of construction and maintenance for new fiber along with the risk that the customer could move, leaving the fiber investment stranded.

Enter the dedicated bandwidth solution

An alternative to the traditional broadcast architecture is the unicast architecture. In this deployment, the cable operator establishes a dedicated IP connection to each subscriber and delivers to that subscriber a combination of video, voice and data using a packetized format.

While such an architecture has not previously been available to cable operators, advancements in gigabit Ethernet switching, wire-speed routing, MPEG video compression and RF technology now open the door to such an on-demand IP connection on existing cable networks.

An IP-switched architecture converges the delivery of digital video, Internet access, voice over IP and other advanced interactive services in a cost-effective manner. Further, an all-IP network reduces maintenance and operational costs by collapsing the three separate transport services into a single unified IP connection.

An IP-switched network can coexist on the same infrastructure as existing analog and digital broadcast services while enabling new IP-based applications. An example of this dedicated IP transport was demonstrated on January 31st in Lenexa, Kan., when the first MPEG 4 content was transmitted over satellite and delivered to a user over the HFC network of cable operator Everest Connections. The end user was able to control the video stream being fed via satellite, while simultaneously surfing the Internet on the PC and placing a telephone call with an off-the-shelf analog telephone. This "triple play" was delivered over a switched 5 Mb/s IP connection between the head-end and the user's set-top box.

To deploy into the current operating environment, operators are using standard 6 MHz wide TV channels that allow 5 to 40 Mb/s downstream and 0.5 to 8 Mb/s upstream dedicated to each customer. Bandwidth can be provisioned via software from the cable system head-end without a truck roll, allowing operators to easily establish service classes of non-shared bandwidth. Because the bandwidth is dedicated, operators can guarantee service level agreements between the head-end and the customer--an important feature for serving business customers.

With a single 5 Mb/s connection, cable operators can deliver two streams of DVD-quality MPEG 4 video, and two lines of voice and Internet-surfing bandwidth that can be shared with other Internet devices within the premises. By using an on-demand streaming connection, network bandwidth currently consumed by unviewed broadcast channels can be reclaimed while new services are being deployed more efficiently on a customer-by-customer basis.

Advanced business services benefit most from dedicated IP connections. Figure 2 shows a suite of services that can be delivered over HFC networks that previously required fiber optic connectivity.

Figure 2. Business Services and Higher Revenues are Enabled with Dedicated IP Connections

The dedicated switched IP system consists of an IP switch router located at the cable system head-end facility and a gateway IP router located at the customer premises. Essentially, this system converts the cable network from a shared one to a point-to-point architecture without requiring changes to the HFC plant, simplifying implementation and keeping capital costs low.

Multiservice revenue opportunity

With approximately 750 MHz of spectrum to a 500-home node, the return on assets can be measured by the amount of revenue generated by the available spectrum. A common unit of measurement is the revenue generated per 6 MHz channel.

Figure 3 breaks out revenues driven per node for a single 6 MHz channel. Because broadcast television uses a large amount of spectrum to drive around 300 video subscribers per node at $40 per month, it is much less efficient in revenue per channel than the dedicated business service outlined in Figure 2 above. By marketing to the approximately 30 SMBs served by any given node, multiple SMBs can be served within a single 6 MHz channel with dedicated bandwidth.

Residential high-speed data service is the next highest performer. With about 20% of homes taking high-speed data per node, this yields 100 customers paying $45 per month taking up only 6 MHz of spectrum.

Figure 3. Potential Revenue per Channel for a 500 Home-passed Node

By slowly recapturing analog bandwidth and deploying dedicated IP connections to subscribers, the cable operator can eventually repurpose broadcast bandwidth to individual customers for on-demand services via a dedicated stream.

Implementing a dedicated IP connection to each customer also opens the door to new services beyond video, voice and data, including security monitoring, high-speed gaming, videoconferencing and others. Operators can more easily provision these services with a single delivery protocol and without requiring a truck roll. Additionally, using IP as the only transport protocol reduces operator head-end equipment capital outlay and simplifies plant maintenance and operations.

Unite and deliver

Cable operators have clearly signaled their long-term commitment to deploying advanced IP services over their HFC networks. This is exemplified by operators such as Time Warner Cable that are beginning to dedicate lower revenue-generating TV channels for dedicated bandwidth delivery through which each customer can receive an individually tailored set of services.

With the tremendous bandwidth available over the HFC infrastructure, and the fact that cable plant is geographically ubiquitous, cable operators have a strong migration path for deploying revenue-enhancing services that will increase the value of the network and establish cable operators as the provider of choice.

Geoffrey Tudor is President and CEO and Holland Young is Vice President, Customer Operations at Advent Networks. They can be reached at gtudor@adventnetworks.com and hyoung@adventnetworks.com, respectively.

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