The report starts with a gripping observation:
- Cable multiple systems operators (MSOs) could soon have their backs against the wall as their customer base demands 100 HDTV channels, their RBOC and satellite competitors supply that many, but their own HFC plant can only deliver 12.
Now, it is true that most of cable's bandwidth is eaten up by analog broadcast channels, to the tune of 70 or more on many cable systems. And then there's broadcast digital, digital simulcast, and VOD, not to mention DOCSIS channels for IP services. Available spectrum for HDTV is limited, but in an emergency, MSOs could quickly pare down their analog offerings considerably to reclaim spectrum.
The report further contends:
- Cable, we believe, will face the same issue with its legacy copper-based transport media, in this case coaxial cable, that the telcos are facing with their copper infrastructure.
In those Verizon fiber markets, cable operators may well need to look at network enhancements to stay ahead of the capacity curve. But as the Merriman report notes, MSOs have many options available to do so.
- The MSOs have multiple technology choices in enhancing access bandwidth -- such as new compression technologies, pushing fiber deeper in the network and adding optical nodes, coaxial spectrum enhancement, switched broadcast technologies, and analog spectrum reclamation -- and are likely to opt for combinations of these alternatives.
Cable operators certainly face bandwidth concerns and challenges. But a crisis? Not so much. If there's a crisis, it's among the North American telcos that are now losing a million local phone customers -- a quarter of them to MSOs. Now that telcos are finally positioning themselves to fire back with fiber, cable just needs to be ready to return the volley.
- Michael Harris, Chief Analyst, Cable Digital News