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Arris/BigBand Could Resurrect Modular CCAP

Arris Group Inc. (Nasdaq: ARRS)'s proposed purchase of BigBand Networks Inc. (Nasdaq: BBND) could resuscitate the notion of a modular version of the Converged Cable Access Platform (CCAP), a super-dense access architecture being developed to help cable operators migrate to all-IP networks. (See Arris Snaps Up BigBand .)

So far, much of the talk and vendor attention around CCAP has involved an integrated implementation that combines the system's Access Shelf (for the downstream and upstream PHY and MAC layer) and Packet Shelf (for packet processing). Arris and Motorola Mobility LLC fall in that camp, and Cisco Systems Inc. (Nasdaq: CSCO) might develop an integrated CCAP product as well. (See Moto Takes Long View on Cable Access .)

So far, no vendor has committed to developing the Packet Shelf piece of a modular CCAP, though Alcatel-Lucent (NYSE: ALU) and Juniper Networks Inc. (NYSE: JNPR) have at least considered it. (See AlcaLu Undecided on Cable Gear Opportunity and Juniper Still Not in Love With CMAP .)

Some haven't been so enamored with the idea. RGB Networks Inc. , once an Access Shelf candidate for CCAP (when it was called Converged Multiservice Access Platform (CMAP)), scrapped its product development plans after deciding that the near-term opportunities for the technology were too limited. (See RGB Shelves CMAP Product Plans .)

One industry source said the development of a modular CCAP has been in jeopardy because it requires traditional routing companies and edge QAM makers to integrate technologies that they aren't overly familiar with. Plus, they've been hesitant to go through all that integration work and expense if the payoff is questionable.

Arris swept those concerns aside during a call Tuesday with reporters and analysts, stressing that the addition of BigBand would speed up the development of a modular CCAP while also helping with near-term plans to create an integrated implementation.

That work is expected to involve linking Arris's new E-6000 Converged Edge Router with the video processing and edge QAM capacity of BigBand Media Services Platform (MSP). (See BigBand Plots Plans for Comcast's CMAP.)

Having both architectures "just opens the market broader for us, [and] allows us to get a larger share of this," said Arris Group President of Products Bruce McClellan.

Arris is working with "elite customers" on trials of the E-6000, which supports IP video alongside raw high-speed data applications, McClellan said. Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) are Arris's largest customers.

Arris and the telcos
The BigBand deal would quickly help Arris to diversify its customer base, which has been cable-centric and has, at times, caused Arris's fortunes to ebb and flow based on the buying patterns of its two largest customers. With BigBand, Arris would find itself doing more business at other major MSOs, including Cox Communications Inc. and Cablevision Systems Corp. (NYSE: CVC).

Arris would also get exposure to the BigBand's telco customers, including AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). BigBand CEO Amir Bassan-Eskenazi said the telcos represent as much as 35 percent of BigBand's revenues.

Arris CEO Bob Stanzione downplayed suggestions that Arris's newfound relationships with the telcos might upset its MSO masters. "The technologies of cable and telco have been merging for some time," Stanzione said. "I think it just makes us an even stronger vendor to the industry in which we operate."

Other deal tidbits
  • Arris expects to reduce BigBand's operating expenses by $7 million per quarter by the third quarter of 2012, as it trims off costs associated with BigBand being a public company.

  • Arris intends to have the BigBand portion of its business reach break-even by mid-2012.

  • There is a breakup fee. The companies haven't disclosed it yet, but Multichannel News pegs it at $5.5 million, should BigBand end up receiving a better offer. Arris, you may recall, lost out on Tandberg Television when Ericsson AB (Nasdaq: ERIC) swooped in and sweetened the pot. (See Tandberg Board Backs Ericsson Bid .)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • Jeff Baumgartner 12/5/2012 | 4:51:28 PM
    re: Arris/BigBand Could Resurrect Modular CCAP

     BBND had aspired, in a way,  to become sort of what Arris is now, or will be once it adds BBND to the fold. Well before CMAP/CCAP, BigBand was in position to create a modular or integreated type of convergence platform when it made and sold both eqam and cmts gear, as Arris does today. But BBND scuttled its CMTS product in 2007 amid a larger restructuring.  The fact that it had a tough time increasing its small share of the CMTS market also had a bit to do with that.  Still, I wonder if that was the right move or if they bailed on cmts too early. JB


     


     

    msilbey 12/5/2012 | 4:51:26 PM
    re: Arris/BigBand Could Resurrect Modular CCAP

    Perhaps BigBand underestimated how long the CMTS would have to exist before cable evolved to a new platform? The move did seem preemptory at the time, but then again, I imagine the development costs are pretty high.

    SabrinaChow 12/5/2012 | 4:51:22 PM
    re: Arris/BigBand Could Resurrect Modular CCAP

    I couldn't agree with you more Jeff.  BigBand had the right stuff from a technical standpoint but it was obvious that they were lacking in terms of CEO level understanding of financial fundamentals and industry vision.


     


    Their vIP Pass docsis bypass product came about from the CMTS know-how that was retained from the Cuda fallout but with the advent of the cable modem/rf gateways it appears that the ship has sailed.  It will be interesting to see what ARRIS does with that product.

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