Cable's Cost Per Bit Plummets

ATLANTA -- SCTE Cable-Tec Expo 2011 -- Docsis IP network traffic is up, but cable's cost per bit for delivering it is headed down. Way down.

Here at an Industry Partnership panel Tuesday Arris Group Inc. (Nasdaq: ARRS) Chairman and CEO Bob Stanzione said costs are decreasing at a rate that is roughly inversely proportional to traffic increases. In other words, if downstream traffic is rising 50 percent per year, then the cost per bit for delivery is heading downward at the same rate.

Stanzione believes those costs will lower radically as MSOs start to deploy super-dense Converged Cable Access Platform (CCAP) products, which are expected to start showing up sometime next year and help cable MSOs make the push toward an all-IP infrastructure. (See Cable Rethinks 'Modular' CCAP .)

Motorola Mobility LLC President Daniel Moloney suggested that the industry should start paying attention to upstream traffic growth again, too. Greater demand will continue to fuel channel density increases in the downstream and the upstream. That density will should contribute to lower costs for transport in both directions. (See Moto Softens Up Before CCAP .)

But how low will things go?

Mark Palazzo, VP and GM of Cisco Systems Inc. (Nasdaq: CSCO)'s Access Network Business Unit, told Light Reading Cable in a separate discussion that downstream port costs are about $500 per downstream on the vendor's 3G60 cable modem termination system (CMTS) blade. That compares to per-port costs of about $4,000 about four years ago.

Palazzo declined to set a target for CCAP port pricing, but did acknowledge that Cisco anticipates that they'll be significantly less than $500.

And speaking of CCAP, Arris's Stanzione told showgoers that it's now his company's No. 1 priority.

— Mari Silbey, Special to Light Reading Cable; and Jeff Baumgartner, Site Editor, Light Reading Cable