A New Chapter For Cable
At the end of February, [email protected] (Nasdaq: ATHM)
will pull the plug on its remaining customers, closing a chapter of Internet history -- and opening another one for the American cable industry.
The new chapter is seeing cable operators rolling out their own state-of-the-art router backbones, rather than relying on [email protected] to provide Internet connectivity, and that promises to be exciting from three points of view:
All of these developments were happening anyhow, but the implosion of [email protected] has accelerated the pace considerably -- much to the delight of equipment manufacturers.
In order to understand what’s going on, a little history is necessary. When operators started rolling out cable modems, they struck deals with [email protected] to handle their requirements for Internet backbones. To begin with, it made a lot of sense because they were just getting started. But over time, things changed. Traffic volumes soared, and the potential for offering advanced services to a wider range of customers became clearer. Also, operators realized they had developed the expertise to take [email protected]'s job in house -- saving them a lot of money.
To cater to these developments, the cable operators started roping together previously isolated islands of infrastructure to create regional networks. These are based on fiber rings linking a master head-end to subsidiary head-ends, called hubs (see Cable Networks: A Primer).
At the same time, improvements were being made to cable modem technology, enabling operators to offer better quality, more secure telecom services over their existing infrastructures. This is embodied in the Data Over Cable Service Interface Specification (DOCSIS) 1.1, a standard from Cable Television Laboratories (CableLabs).
Equipment implementing the DOCSIS 1.1 standard -- cable modems for customer sites and cable modem termination systems (CMTSs, the cable equivalent of DSL access multiplexers) for operator sites -- has started arriving.
So far, two CMTSs have passed DOCSIS 1.1 compliance tests. The C4 from Cadant, now part of Arris Network Technologies (Nasdaq: ARRS), was first (Pssst! Wanna see the C5?). The elegantly-named uBR7246VXR from Cisco Systems Inc. (Nasdaq: CSCO), the CMTS market leader, was second (see Cisco Claims Cable First).
The rollout of DOCSIS 1.1 gear means that cable operators need to be able to support equivalent levels of quality-of-service on their Internet backbones. This was another factor weighing in favor of them building their own router networks.
“Before, they didn’t have the level of control, because they outsourced the Internet backbone to [email protected],” says Kevin Mitchell, directing analyst of service provider networks for Infonetics Research Inc. “Now they are building those networks and want that control.”
Router vendors are already making hay. Riverstone Networks Inc. (Nasdaq: RSTN), Celox Networks, Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), and Cisco are all selling routers that aggregate local CMTS output and/or drive backbones.
However, another bunch of equipment manufacturer are taking things a stage further and developing hub-based combined CMTS/routers.
Cisco has done this under its own steam, but four other vendors have got a leg up by acquiring CMTS startups:
Table 1: Acquisitions
|Vendor||Newly Acquired Partner||Product||Docsis 1.1 Certified?|
|ADC||Broadband Access Systems||Cuda 12000 IP Access Switch||No|
|Arris Technologies||Cadant||C4 CMTS||Yes|
|Juniper Networks||Pacific Broadband||G10 CMTS||No|
|Motorola||RiverDelta||Broadband Services Router (BSR) 64000||No|
The next few months will be the calm before the storm. Deals are beginning to happen -- Riverstone won a metro ring router contract with Cox Communications Inc. (NYSE: COX) in November (see Riverstone Edges Out Cisco at Cox), for instance -- and a lot of routing gear is said to be in cable operator labs.
The real action will start when CableLabs begins widespread certification of the Docsis 1.1 CMTSs. One certification wave just ended, and others are planned to start in April, July, and October.
— Carl Weinschenk, special to Light Reading