Cable Has Plenty of Capacity
A new report from Sanford C. Bernstein & Co. Inc. squashes speculation on Wall Street that MSOs lack sufficient network capacity to compete with telco fiber services. This differs from an alarmist analysis issued early this month from Merriman Curhan Ford & Co. (See Cable's Looming Bandwidth Crisis?)
Indirectly, Sanford Bernstein Senior Analyst Craig Moffett argues the crux of cable's challenge is not the capacity of their HFC networks. Rather, it is the legacy contracts with programmers that lock up the majority of their spectrum with analog cable TV channels.
By reclaiming much of that analog spectrum, splitting fiber nodes, and employing switched broadcast video (SBV) techniques, Sanford sees plenty of headroom for cable's service offerings, including HDTV and VOD.
The report argues that this three-pronged approach offers:
- ...a low-cost path to capacity expansion that keeps cable fully
competitive with even the most fiber-rich next generation networks
(including Verizon’s FiOS network) without a costly rebuild.
The report notes:
If the idea of an all switched network sounds familiar, it should be. SBV is simply cable’s more spectrum-efficient equivalent of the telco model of IPTV, only delivered over a plant with vastly higher capacity than a telco’s legacy copper infrastructure, and with a logical and low-cost migration path to get there.
Each analog channel consumes 6 MHz of capacity (or roughly 1/125th of the total capacity of an upgraded cable plant). Re-claiming that channel slot frees up enough capacity to launch 2½ more channels in HDTV (each of which consumes about 2.4 MHz), or ten more digital channels (each of which consumes about 0.6 MHz), another ten QAMs, each capable of delivering an additional VOD stream, or another doubling of broadband [Internet] capacity (which today operates out of a single 6 MHz channel slot).
This is where things get interesting:
Until digital penetration reaches 100% – being left off the analog tier means reduced distribution. And that means lower affiliate fees, and lower advertising revenue.
— Michael Harris, Chief Analyst, Cable Digital News