Cable modem/CMTS

Cisco Alters CMTS Vision With '20/20' Card

Is Cisco Systems Inc. (Nasdaq: CSCO) casting a vote in favor of an "integrated" cable modem termination system (I-CMTS) architecture?

It appears so, as Cisco now offers a CMTS line card that packs in 20 downstream ports and 20 upstream ports, and is tagged for Docsis 3.0 deployments that rely on the I-CMTS approach, Cable Digital News has learned.

That would be quite a departure from Cisco's historic Docsis 3.0 CMTS strategy. Until now, Cisco's been focused on the "modular" CMTS (M-CMTS), a CableLabs -specified architecture that physically separates out the upstream and downstream components. In that scenario, upstream traffic flows through the "core" CMTS chassis, while downstreams get piped through relatively inexpensive edge QAM devices from Harmonic Inc. (Nasdaq: HLIT) and other suppliers.

Multiple sources confirmed that Cisco is starting to sell the new card, but the company's still being tight-lipped about it. Cisco "won't be in a position to comment on any further product speculation at this time," a spokeswoman wrote in an email to Light Reading.

Still, the emergence of the 20/20 card looks like an acknowledgment by Cisco that, in order to remain competitive, it must complement its M-CMTS wideband portfolio with an integrated product line that's favored by rivals such as Arris Group Inc. (Nasdaq: ARRS) and Motorola Inc. (NYSE: MOT).

"It's always good to hedge your bets," says Jeff Heynen, directing analyst for broadband and video at Infonetics Research Inc. , who is also aware that Cisco's starting to circulate the new 20/20 card.

In Cisco's case, placing that bet is strategically important because it's a foregone conclusion that the M-CMTS won't catch on with every operator that intends to upgrade to wideband. That also goes for some MSOs that are using Cisco's pre-Docsis 3.0 CMTS gear but may shy away from the more complicated modular architecture.

Offering an I-CMTS product may help Cisco maintain its CMTS market share as MSOs migrate to Docsis 3.0, and perhaps allow it to catch some new business, Heynen notes.

And keeping and winning those accounts is becoming harder in the Docsis 3.0 era, even for Cisco.

Arris's I-CMTS strategy has been paying off big time. In the second quarter of 2009, Arris shot past Cisco in CMTS revenues for the first time ever, a move fueled by Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s aggressive wideband deployments. More recently, a big run on Arris CMTS gear late in 2009 contributed to what could be the vendor's best quarter ever (Arris is scheduled to issue fourth-quarter results this afternoon.). (See Arris Snares CMTS Crown From Cisco and Arris Swirls With MSO 'Budget Flush'.)

An industry source said Cisco's new card could factor in at Time Warner Cable Inc. (NYSE: TWC), which is getting ready to expand wideband beyond its original deployment in New York City, and is believed to be favoring an I-CMTS architecture. TWC, the source said, has been testing the 20/20 card in the lab, and could award its stamp of approval sometime in the second quarter. (See TWC Fights FiOS in NYC.)

Has the M-CMTS run out of legs?
Cisco's integrated move is also coming into play as questions swirl about the future of the modular CMTS. In the U.S., Comcast is using Cisco's M-CMTS in markets such as Minneapolis/St. Paul, Minn., but it's been leaning on Arris and the I-CMTS in many of its other Docsis 3.0 markets.

Among other examples, Guangzhou Digital Media Group of China is delivering IPTV services using a modular system from CMTS and edge QAM startup Casa Systems Inc. (See Chinese MSO Does IPTV With Microsoft.)

Some MSOs in Europe are also using M-CMTS, and may look to Casa and Cisco for help, but "the vast majority of systems are still integrated," Heynen says.

The M-CMTS is considered to be much more complex than the I-CMTS, which could be a big turnoff for MSOs that don't have the engineering resources of a major operator like Comcast. However, the M-CMTS does offer one key advantage: the cost per bit is lower because the architecture relies on cheap edge QAMs for the downstreams.

But that advantage may be fleeting, because I-CMTS densities continue to improve. "That makes the M-CMTS architecture moot from a pricing perspective," Heynen says, but allows that bit costs between the integrated and modular schools of thought likely won't reach parity for at least another year or two.

At the same time, the concept of the "universal" edge QAM (a version that allows the sharing of resources for Docsis, video, and voice traffic) seems to be falling short of the ideal -- another trend that might not bode well for the future of the M-CMTS. Instead, operators will likely have to continue applying edge QAM capacity toward individual services and applications (video-on-demand, Docsis, switched digital video, etc.). (See Universal Edge QAM Market Heats Up.)

"I'm not sure the concept [of the universal edge QAM] has really taken off," Heynen says. Multiple industry sources familiar with the status of universal edge QAM development have offered similar opinions.

Although the growth prospects of the M-CMTS appear to be in some doubt, Cisco's not bailing on the architecture. In fact, it's still investing in it. Last fall, the company told Cable Digital News exclusively that it's developing an M-CMTS blade that supports 60 upstream ports. That product, the 3G60, is expected to start shipping in the third or fourth quarter of 2010. (See Cisco Aiming to One-Up Cable's Upstream .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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