Competition from fibre-to-the-home networks is putting cable operators under pressure. Robert Roe investigates the options available to cable operators wishing to upgrade their networks
Cable operators are used to having the upper hand when it comes to delivering entertainment services to consumers. But as demand for high-speed broadband surges and telecom operators expand into Internet protocol television (IPTV), cable operators must invest in their networks or face losing subscribers to other service providers.
With an increasing number of telecom operators moving towards gigabit services and fibre-to-the-home (FTTH), cable operators are now facing an even greater challenge: should they upgrade their networks in order to compete more effectively with FTTH operators or should they become FTTH operators?
One of Google Fiber’s objectives has been to accelerate wireline broadband investment by creating competition, says Julie Kunstler, principal analyst, intelligent networks and components, at market research firm Ovum. And it’s certainly been successful in that respect. ‘We are seeing a flurry of activity by first- and second-tier equipment vendors as cable operators adopt access solutions to support one gigabit for residential subscribers and 10G for business services,’ she said.
The previous upgrade from pure coaxial cable to hybrid fibre coaxial (HFC) systems in the 1990s was carried out by introducing optical fibre into the main distribution routes of the network. This upgrade can be viewed as the equivalent of fibre to the cabinet (FTTC) for telecom operators – it pushes fibre deeper into the access network and shortens the length of coaxial cable so that the throughput of the network can be increased. This architecture, in combination with the DOCSIS (Data Cable Over System Interface Specification) operating system, gave cable operators ample capacity for television and broadband services – until the gigabit obsession started to take hold.
The cable industry has several paths to gigabit broadband, explained Dan Rice, vice president, access network technologies at CableLabs, the non-profit research and development consortium for the cable industry. Depending on the current configuration of the network, some of these would be minor changes, while others could be considerably more disruptive.
Rice points out that the current generation DOCSIS 3.0 technology that most cable operators have already deployed can, in theory, deliver gigabit broadband downstream. Based on cable, modem capability of bonding 32 channels in the downstream direction yields total capacity of about 1.6 Gb/s (including overheads), which would allow for downstream gigabit services – albeit only for smaller cable customer groups. (Typically, a single optical node in the HFC network will serve anywhere between 250 and 2000 subscribers via coaxial cable.)
He conceded that DOCSIS 3.0 technology is more restricted in the upstream direction. With the amount of upstream spectrum typically available in Europe, a capacity of 160 Mb/s would enable upstream services in the 100 Mb/s range for smaller cable groups. However, bandwidth consumption has historically been quite asymmetric, he says, while the next major generation of DOCSIS technology will enable gigabit capacity upstream.
Released in October 2013 but not yet widely deployed, DOCSIS 3.1 is designed to support speeds up to 10 Gb/s downstream, to enable sustained 1 Gb/s services to consumers. The technology could also enable 1 Gb/s service in the upstream direction if the cable operator chooses to dedicate the frequency spectrum resources on the coaxial part of the network.
‘The network operator has many options to scale speed and capacity based on how they choose to deploy DOCSIS 3.1 technology,’ Rice said. ‘Operators will be able to increase performance over time, as needed, by simply changing the configuration. For example, if an operator choses to expand the use of spectrum for IP broadband using equipment built to the DOCSIS 3.1 cable modem minimum requirements, the increase would be greater than five times over currently deployed capabilities.’
Many configuration changes can be gradual, Rice said: ‘DOCSIS 3.1 is designed to work on existing HFC networks and with existing back office systems. It will coexist with current technologies on the same network. The adoption or deployment should be fairly straightforward because of the backward compatibility benefits.’
New DOCSIS 3.1 customer premises equipment (CPE) can operate as a DOCSIS 3.0 CPE if the network infrastructure has not yet been upgraded. Conversely, DOCSIS 3.0 channels can be ‘bonded’ to the new DOCSIS 3.1 bandwidth, which means it is not necessary to install DOCSIS 3.1 CPE unless the customer orders a faster broadband service. This reduces the initial investment, allowing cable operators to spend money on CPE only where there is a revenue opportunity.
Furthermore, he points out that the migration to DOCSIS 3.1 can be implemented separately on the downstream and upstream channels. This allows for quicker expansion of the congested downstream channels using some of the DOCSIS 3.1 features. Upstream support can be upgraded later when additional upstream bandwidth is required.
However, boosting the upstream bandwidth by changing the cable frequency split is a more serious operation, requiring modification to the amplifiers in the street and new cable modems in customers’ homes as well as upgrades to head-end equipment. The cable network may also be out of service for a prolonged period during the upgrade. The question is, at what point does the disruption become so significant that it would be worth considering replacing the network with fibre all the way to the customer?
‘Naturally, cable operators are looking to leverage their existing assets and what they have in the ground,’ commented Doug Blue, solutions marketing director at Calix. ‘But, I think cable operators are also having a very hard look at becoming fibre providers – and skipping some of the steps of going through a DOCSIS world.’
Optical fibre is the more obvious choice in Greenfield deployments, when cable operators expand into territories where they have no existing infrastructure. There are several technologies that can combine optical fibre with DOCSIS, which are aimed at operators that have both HFC and pure fibre networks. One approach is RF over glass (RFOG), which allows cable operators to provide traditional DOCSIS-based services using DOCSIS hardware over a generic passive optical network (PON).
However, RFOG on its own doesn’t provide any bandwidth enhancements compared to a standard HFC network. ‘Unless you are splitting up optical nodes with RFOG or you are upgrading to DOCSIS 3.1 then you are basically giving the customer the same bandwidth,’ said Els Baert, fixed networks product manager at Alcatel-Lucent. ‘You are just extending the fibre to the home; it increases a little the reliability and the quality of service but not really the bandwidth.’
A better way forward, she suggests, is FTTH combined with standards-based PON technologies because of the extra bandwidth that it brings. ‘With GPON you can have 2.5 Gb/s download speeds, with 10G EPON you can have 10 Gb/s, now with TWDM PON coming you can have even 40 Gb/s and there are more evolutions coming on the fibre to increase that bandwidth even more.’
DOCSIS over EPON could be an interesting alternative for cable operators, she says. CableLabs has defined the DOCSIS Provisioning of EPON (DPoE) standard, and provides interoperability testing and certification for EPON equipment to guarantee that it will work with DOCSIS back office systems. This allows cable operators to provision services across their network regardless of whether that specific customer resides within the cable or the fibre section of their network.
‘DOCSIS provisioning of EPON makes it easier to integrate and operate the OSS/BSS [operations and billing] systems that cable operators are using,’ Baerts explained. ‘DPoE is just a management system; if you look at it from a software perspective the EPON ONTs [optical network terminals] appear the same as cable modems in terms of provisioning and setting up services.’
Baert points out that the higher speeds enabled by fibre networks will allow cable operators to serve not only residential customers but also supply business services. ‘We see that a lot of cable operators don’t typically address business customers so that is a potential growth area for them,’ she commented.
Ovum is starting to see more cable operators focus on the largely untapped business services market. ‘We see some very different approaches by different cable operators,’ said Ovum’s Julie Kunstler. ‘For example, [US cable operator] Bright House Networks began to deploy EPON back in 2006 for business services including mobile backhaul. Now they are in a position to expand their fibre network to begin to support residential services.’ This move into the residential market was only possible because Bright House Networks started on the business side, where the return on investment is faster. This income stream then helped to support the investment on the residential side.
Geoff Burke, senior director of corporate marketing at Calix, is a fan of using one network to deliver any kind of service. ‘There has been a little bit of an epiphany for service providers over the course of the last decade, which is the idea that one [physical] network running separate customer networks is capable of delivering these services overall. Once they embrace this idea then it really causes them to look carefully at their infrastructure,’ he said. ‘They don’t want to be in a position where they are offering business services over fibre and then relying on the DOCSIS infrastructure for residential customers.’
Calix has given cable operators another option with its DOCSIS provisioning over GPON (DPoG) system, which allows cable operators to blend GPON hardware with DOCSIS. The product was unveiled last summer when the company announced that Grande Communications was using it to provide gigabit services to customers in Austin, Texas. The key component of the system is the vendor’s Open Link Cable software, which ‘translates DOCSIS commands into GPON commands’ so that GPON hardware appears to back office systems as if they were a cable modem termination system (CMTS) and cable modem.
Calix says its product was designed to be compliant with the new CableLabs DPoG specification, which was in draft form at the time, but has since been issued. Meanwhile, CableLabs has also launched the OnePON initiative, which aims to simplify the options by bringing both EPON and GPON under one single standard for use in cable networks.
CableLabs’ Dan Rice thinks it makes a lot of sense for cable operators to stick with DOCSIS upgrades. ‘DOCSIS technology has had very economical cost trajectories as prior versions have been deployed at scale and we expect similar if not faster adoption of DOCSIS 3.1 than previous versions, resulting in similar absolute costs and much reduced euro per megabit cost,’ he said.
He added: ‘In most deployments with existing HFC networks, the economics to evolve to the 10G/1G capacities of DOCSIS 3.1 will make more sense than FTTH. But if, for example, 10G/10G-type performance is required then a PON solution would provide the capability. These speeds – whether DOCSIS 3.1 over HFC or PON – are very far ahead of current typical consumer market demand and should both be effective long-term network evolution paths.’
Ovum’s Julie Kunstler believes the limited upload speed is more likely to constrain service offerings and cause consumer dissatisfaction in the future. ‘What I am starting to hear more and more is that if you really want to use the cloud, even for residential users, it requires a lot of upstream bandwidth,’ she said.
She expects to see some adoption of fibre technology by cable operators this year, but thinks it will be a small, incremental uptake rather than sweeping upgrades to the whole network. ‘We are also seeing some adoption of PON by Time Warner and also possibly by Comcast, but these are just rumours and I cannot substantiate that for you,’ she said.
Alcatel-Lucent’s Els Baert stressed that spending the money on upgrading the HFC network may be a short-sighted endeavour that will only increase total investment in the long run. She said: ‘If you are upgrading your entire network to DOCSIS 3.1 and not building any fibre, you are making a huge investment, while not really investing in the future.’
However, Rice points out that DOCSIS 3.1 can be rolled out in a way that is compatible with a FTTH strategy. ‘HFC networks are frequently segmented and managed, resulting in fibre moving deeper into the network. This ongoing network evolution is complementary to an ultimate move to FTTH.’ DOCSIS equipment can be deployed remotely in the network over packet-based fibre-optic links, resulting in what’s called a distributed CMTS architecture – this is analogous to a fibre-to-the-node (FTTN) or fibre-to-the-distribution-point (FTTdP) type approach used by telecom operators today.
Last year, CableLabs completed C-DOCSIS, a modification of the cable platform that was originally developed for China’s high-density multi-dwelling building environment, but now looks as though it could have much wider appeal. C-DOCSIS is designed as a low-cost option for fibre-deep networks that rely on EPON or GPON to the building, then distribute services over coaxial cable via the in-building network. Three versions of the architectures are defined, which differ in how much of the DOCSIS functionality is pushed out to the remote node. CableLabs and the cable equipment vendors are also developing different architectural approaches to support a more gradual transition towards FTTH.
Over the last couple of years, the number of upgrade options that will allow cable operators to reach gigabit speeds has multiplied dramatically. Cable operators now have a large toolset that they can use to help them to offer the latest services and fend off competition from fibre network providers, but the options they choose will depend hugely on the country or region where they are located and their business model as well as the level of competition. ‘Cable operators have plenty of choices, the real issue is the cost,’ commented Kunstler.
One of the reasons that cable network providers are looking at FTTH-style deployments and PON technology is that they are uncertain about the future. Upgrading to networks DOCSIS 3.1 requires equipment both in the network and the customer premises to be upgraded, and network operators have to invest without assurances that the technology will remain competitive in the longer term.
Kunstler described the dilemma that cable operators face. ‘How do you know what your subscriber is going to want in the near future?’ she asked. ‘One way to look at it is if you are going to make an upgrade, you want it to be significant enough that you don’t have to go back and touch the cabling – whether it is fibre or HFC or copper – for many, many years.‘
Calix’s Burke summed it up: ‘Over the course of time all service providers are moving to fibre, and then they will leverage wireless over their last few feet to enable mobility. But all these steps in between are a matter of strategic options. How quickly you get there is a matter of weighing what’s important to you and what’s necessary in your markets.’