Friday, January 6, 2017

Symmetrical 10-Gbps on HFC is Possible, But Only with Big Changes in Business Model

Symmetrical 10 Gbps on a hybrid fiber coax network is possible, researchers at Cisco believe. But what is possibly in technology terms would also require a major shift in business model, essentially doing away with linear video as we now know it.

There are many important assumptions, however. The new full-duplex capability is not backwards compatible with DOCSIS, and much depends on how much former video bandwidth can be repurposed for internet data, as well as how much operators want to spend to extend network bandwidth beyond the now-standard 806-MHz upper limit, to about 1.2 GHz.

The newer frequency plans that would allow more capacity (upstream and upstream) are are not easy to achieve without replacing nearly all active gear in the distribution network. The full 10-Gbps duplex mode literally requires removing all amplifiers (active elements) beyond the optical node.

That is significant. Full 10-Gbps duplex is likely to require a move to a “passive” optical network that removes all RF amplifiers from the network. Though copper plant would still be used to reach customer locations, that copper would be “passive,” with no active elements in the series.

Consumer terminals also would have be changed to handle the new frequency plans. And key decisions about reducing video bandwidth would also have to be made, to free up more bandwidth for internet bandwidth.

There is, in other words, “no free lunch.” To upgrade beyond 1 Gbps to 10 Gbps, video bandwidth would have to be reduced. That implies either an end to the “hundreds of channels” video menu or a way of switching video “on demand,” for each customer. Both those decisions would be highly disruptive to the present business model, and would not be undertaken lightly.

That is analogous to what AT&T has done with its linear video delivery and on-demand access. Essentially, AT&T is offloading linear video to the DirecTV network, freeing up nearly all the remaining bandwidth on the terrestrial network for IP services and bandwidth.

For cable operators to entertain the notion of symmetrical 10-Gbps service, video likewise would essentially have to be removed from the fixed network. For that reason, virtually nobody believes that choice is conceivable for the near future. Only a massive shift of its own customers away from linear video to on-demand video would allow a change that radical, and that is not expected in the near term (next five years).

Also, there is some thinking that linear video might still drive most of the video revenue for most cable operators as far out as a decade, as tweaks in the packaging continue to be made, adding more on-demand features to the linear packages. That “sell-through” model is fundamental for the cable TV business model, and is similar to plans offered by some telcos where the best prices for internet access require purchase of a fixed voice line.

So symmetrical 10-Gbps service on a hybrid fiber coax network seems possible, though not without massive changes (removing all amplifiers, changing consumer gear.

No comments:

Many Winners and Losers from Generative AI

Perhaps there is no contradiction between low historical total factor annual productivity gains and high expected generative artificial inte...