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July 27, 2009
BigBand Networks Inc. (Nasdaq: BBND) says it has developed a product that enables cable operators to support IPTV set-tops and other IP-capable displays without disrupting their legacy RF-based video systems.
BigBand's Converged Video Exchange (CVEx) is a software-based "video control plane" that provides cable operators with a single product that can deliver linear (real-time) and non-linear (on-demand) video services to IPTV boxes as well as the millions of deployed RF-based boxes that use MPEG-based digital video transport technology. (See BigBand Gets Urge to Converge.)
In addition to delivering video to TV sets, BigBand says the CVEx, an extension of the vendor's control plane for switched digital video (SDV), can be adapted to help MSOs pipe video to PCs and cellphones.
Cable MSOs are becoming increasingly interested in IPTV as they look for ways to compete with the hybrid RF-IP video services from competitors such as Verizon Communications Inc. (NYSE: VZ), as well as the pure IP services offered by AT&T Inc. (NYSE: T).
In addition, cable operators are keen to tap into a rich ecosystem of IP set-top boxes and to deliver content to a wide range of mobile and fixed video displays.
The big challenge facing the cable service providers, though, is how to utlize IP video capabilities without abandoning their standing video infrastructures. (See How Will Cable Deliver IPTV?)
BigBand says service providers can achieve such convergence by using its "vIP PASS," a recently unveiled system that lets MSOs "bypass" the core cable modem termination system (CMTS) and deliver IPTV services through edge QAMs. South Korea's LG Powercom Co Ltd. is the first (and only, so far) operator to deploy it. vIP PASS is one of the integrated elements of the new CVEx system, according to BigBand VP of marketing John Holobinko. (See BigBand Lays Cable IPTV Groundwork and Koreans Take Cable IPTV for a Spin .)
Dipping into cable's bandwidth pool
One of the key concepts of the CVEx is to treat cable's spectrum as one massive pool of bandwidth that can be shared by RF and IP devices alike. Currently, a cable operator that has built out to 750 MHz, for example, uses the bulk of its individual 6 MHz channels to deliver broadcast and on-demand video services, with just a sliver of the spectrum that's being used today to deliver IP-based cable modem offerings. However, operators are expected to leverage more of that bandwidth for managed and "over-the-top" IP video services as they expand deployment of Docsis 3.0, a new CableLabs platform that bonds multiple 6 MHz channels to deliver speeds in excess of 100 Mbit/s.
Holobinko says CVEx breaks down cable's RF and IP "silos" by creating a convergence point that allows broadcast, multicast, and unicast video services to be delivered to older set-tops and newer, IP-based devices.
The CVEx, as BigBand describes it, serves as a master translator to ensure that source video can be read and displayed on different types of end points. "The devices will think the entire bandwidth speaks their language," Holobinko says.
The result is a more efficient use of spectrum and the avoidanace of content duplication, as cable operators won't need to create two versions of a video-on-demand (VoD) title -- one for RF-based digital set-tops and another for IP devices. This concept is also taking hold at other cable suppliers. For example, VoD specialist Concurrent Computer Corp. (Nasdaq: CCUR) has developed a multi-screen upgrade for its MediaHawk 4500 video server and back-office system. (See Concurrent Upgrades for Mobile & PC VoD.)
In terms of spectrum allocation, BigBand's approach differs from another that MSOs are considering, whereby they "cap" the RF side of the network and begin to layer on IP-based video services. In that scenario, operators would all but stop buying RF-based digital set-tops and instead begin to purchase and deploy IP-capable boxes. From that point on, all new video services would apply to only the new IP boxes, or perhaps to a new type of hybrid gateway device that can speak both RF and IP.
Down with the ERM?
Because the CVEx is capable of meting out network resources to specific applications, BigBand's system would make standalone, RF-based edge resource managers (ERMs) redundant. That won't please ERM vendors like Cisco Systems Inc. (Nasdaq: CSCO), Camiant Inc. , Motorola Inc. (NYSE: MOT), and, most recently, SeaChange International Inc. (Nasdaq: SEAC). (See Motorola Buys Vertasent and SeaChange Joins Video Management Fray.)
Holobinko says BigBand's CVEx integrates the ERM function and goes a step further, because it also manages cable's IP-based network resources and enables new applications, such as targeted advertising, to be deployed across different video formats (e.g., IP, RF, VoD, broadcast, and multicast).
"An ERM is an RF-based bandwidth manager and nothing more," Holobinko contends, labeling such a standalone device "a dead-end product."
Holobinko says BigBand expects to deliver the first version of the CVEx for deployment by the third or fourth quarter of 2009. Nearer-term, it will show it off to MSOs at the CableLabs Summer Conference (Aug. 9-11) in Keystone, Colo.
The first CVEx release will support BigBand's SDV and vIP Pass components, with VoD and SIP (Session Initiation Protocol) support to follow. Holobinko says the CVEx has also been developed to work with two quasi cable interactive/VoD interface standards: Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s Next Generation On Demand (NGOD) platform and Time Warner Cable Inc. (NYSE: TWC)'s Interactive Services Architecture (ISA).
Not surprisingly, BigBand won't say who is first in line to try out CVEx but agrees that one of the vendor's SDV partners is among the most likely candidates. Cable operators that meet that criterion include Time Warner Cable, Bright House Networks , Cablevision Systems Corp. (NYSE: CVC), Charter Communications Inc. , and Vidéotron Telecom Ltd.
A new growth engine?
The CVEx is coming into play as analysts and investors continue to wonder where BigBand's next big growth wave is going to come from.
Last month, Jefferies & Co. Inc. analyst George Notter pondered just that question, speculating that SDV deployment activity has already peaked, as more MSOs flirt with analog reclamation in the near-term before later casting an eye on switched architectures. BigBand says its SDV system passes more than 24 million homes. (See Comcast's $1B Bandwidth Plan .)
Notter still upgraded BigBand, whose stock had been down 30 percent since April, to Hold from Underperform, noting that BigBand was trading at about 11 times his 2010 base business earnings per share projection, and that the vendor's video processing product portfolio holds significant strategic value. Notter also upgraded the stock because he believes any M&A-related premium has already been sapped from the stock. BigBand's previously been considered a takeover target, but such chatter has waned considerably during the past year or so. (See BigBand OKs 'Change of Control' Exec Packages and BigBand for Sale?)
Notter still thinks BigBand may ultimately be acquired by a larger vendor, with Arris Group Inc. (Nasdaq: ARRS) as his top candidate.
— Jeff Baumgartner, Site Editor, Cable Digital News
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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