Cable Confronts Bandwidth Crunch

Shaking off two years of disbelief and dismay, the cable industry has finally started dealing with the prospect of an impending bandwidth shortage.

Cable operators and equipment suppliers, alarmed by an explosion in bandwidth use by cable subscribers over the last couple of years, are now drawing up plans to boost capacity at both the headend and plant levels. Instead of debating whether the coming bandwidth crisis is genuine, they're looking at ways to confront the crisis by splitting fiber nodes in half, converting systems over to more efficient switched digital video delivery, testing pre-Docsis 3.0 channel-bonding technologies, and expanding their systems' RF capacity to 860 MHz or 1 GHz.

Cable technology strategists are also looking at boosting their QAM power, instituting out-of-band spectrum overlays, and upgrading to MPEG-4 video compression standards. They're even weighing such previously unthinkable moves as building fiber-to-the-home (FTTH) networks and adopting PON architecture, just like some of the big phone companies.

"We know there's a need for more bandwidth," says Bob McIntyre, CTO of Scientific Atlanta . "We just have to decide how to do it."

At a conference sponsored by PK Worldmedia Inc. in Houston Tuesday, McIntyre and other cable engineers spelled out these measures to cope with the approaching bandwidth storm. The conference, held the day before the opening of the Society of Cable Telecommunications Engineers (SCTE) 's annual Emerging Technologies show, found cable officials soberly agreeing that skyrocketing subscriber bandwidth consumption is threatening to overwhelm even their fattest broadband pipes.

"Bandwidth consumption is definitely increasing, and the average consumption rate is definitely increasing," said Patrick Knorr, general manager of Sunflower Broadband , a small, independent cable operator based in Lawrence, Kan. "It's definitely a real problem; there's definitely a storm coming."

Cable technologists blamed the new bandwidth crunch at least partly on the surge in high-definition TV (HDTV) sets and channels. They noted that HD programming demands three to four times as much bandwidth as standard digital TV channels, leaving relatively little room for other fare.

Conference speakers also noted that such prime cable rivals as DirecTV Group Inc. (NYSE: DTV) and Verizon Communications Inc. (NYSE: VZ) seem determined to outflank MSOs by offering several dozens or, in DirecTV's case, even hundreds of HD channels to their customers.

"Video is going to drive this thing and keep driving it," SA's McIntyre said. "We know we're going to have to compete."

In addition, panelists blamed the startling increase in Internet video use over the past couple of years. In particular, they focused on the sudden rise of YouTube Inc. , which now serves up 120 million video streams per day and draws more than 34 million unique users each month to its Website.

Jeff Binder, senior director of Motorola Inc. (NYSE: MOT), warned that the big broadcast networks may soon pose an even greater threat to the cable industry's video business model than YouTube. He cited CBS Corp. (NYSE: CBS)'s plans to stream its primetime programs on the Web for no charge a day earlier than their first run on the TV network.

"It's not so much that everyone is rushing to the Web to watch TV but that content providers are shifting that way," he said. "Prepare your networks for the primetime on-demand wave."

Knorr, whose cable system serves a major college town, said he's already seeing early signs that younger consumers are opting for Internet video downloads over traditional cable video service. In Lawrence, home to the University of Kansas, 5,000 of the cable system's 40,000 subscribers only take high-speed data service. These subscribers account for a sizable 20 percent of the system's cable modem customers.

"Customers are using the Internet more hours per day," he said. "There's an absolute risk of people dropping basic video service for Internet video."

Cable engineers also attributed the swiftly expanding bandwidth needs to the growth of video on demand, digital video recorders, and other time-shifting techniques. For instance, Dom Stasi, CTO of TVN Entertainment Corp. , pointed out that his company now supplies 3,500 hours a month of VOD content to cable operators, up from a mere 150 hours per month in 2001.

"The flood of content is what's really going to make the game or break the game," Stasi said. "It's content that's still king, not resolution or aspect ratios."

Thanks to these trends, some tech executives contended that the bandwidth crisis may never actually end for cable operators. They predicted that the industry will constantly find itself needing to add more capacity to satisfy its customers and fend off competitors.

"There will always be a need for more upgrades," McIntyre said. "We are always going to need more bandwidth."

— Alan Breznick, Site Editor, Cable Digital News