Cable Moves Toward the Big 3-0

Though the premise of Parks Associates' report on broadband penetration is a little far afield, it does provide food for thought.

The report’s main conclusion is that by 2012, 33 million homes in the United States will have broadband with speeds of 10 Mbps or higher. Just a bit more than half of that number — 5.7 million, or 9 percent of U.S. broadband homes — had such speeds at the end of last year.

The interesting quote is from Yuanzhe (Michael) Cai, the firm’s director of broadband and gaming and, presumably, the writer of the report. He suggests that high bandwidth deployments to date have been driven by competition between the cable and telephone industries.

He concludes:

As consumer excitement over pure bandwidth subsides, however, service providers will have to deliver appealing, bandwidth-intensive, value-added services such as HD video streaming and content placeshifting in order to retain customers and increase ARPU.

Cable operators and telcos thought they were doing that all along. The quote doesn’t quite ring true, simply because people never were enamored by high bandwidth in and of itself; instead, the key always has been the expanded service package that it made possible. There’s nothing new in the need for compelling services.

The release refers to the DOCSIS 3.0 as the cable industry’s main weapon in this battle. It seems that this version of DOCSIS — which stands for Data Over Cable Service Interface Specification — gets less attention than FiOS, U-Verse and other telco fiber initiatives.

While DOCSIS 3.0 is an impressive technology — it can run at 160 Mbps downstream and 120 Mbps upstream — it isn’t happening just yet. In a bigger piece about Charter Communications recent earnings call, Light Reading reports that Charter Communications executives said the company will test DOCSIS 3.0 during the second half of the year. Deployments won't be made until 2009. Mediacom is even a step further behind, with only lab tests slated this year.

Broadband Reports notes a Wall Street Journal piece from mid February that said Comcast - the largest U.S. cable operator - is expected to be the only operator to “seriously” upgrade to the spec this year. The company is expected to have 20 percent of its footprint - including, apparently, south Florida - running DOCSIS 3.0 by the beginning of 2009. Other operators are biding their time and, according to an analyst cited in the Journal piece, waiting to see how Comcast fares. The story says smaller operators in the U.S. are fine with older versions of DOCSIS. Videotron is offering “pre-certification” technology reaching DOCSIS 3.0 speeds of 30 Mbps and 50 Mbps.

Where there are possibilities — even in early stages such as lab tests and trials — there are sure to be vendors. Last month, Motorola unveiled a line of DOCSIS 3.0 gear. CED Magazine reports that the family is based on Texas Instrument's Puma 5 chip. The lineup includes the SB6120 Surfboard cable modem and the SBV6120 and SBV6220 digital voice modems. The products support channel bonding, IPv6 and advanced encryption standards that are in the DOCSIS specification.

Cisco already announced its entry into the DOCSIS 3.0 game. In January, the firm introduced the DPC-3000 Channel Bonded Cable Modem. This story says the modem can bond four upstream and downstream channels and is backward compatible with earlier DOCSIS iterations. The product will be available in the spring, the story says.

There clearly is a silver lining to all this: The parry and thrust of cable operators and telcos means that broadband's evolutionary path — cheaper and faster — is continuing.