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WSJ report: Cable will have to deploy FTTP

August 17, 2006 By Jeff Baumgartner, CED

Cable operator feathers were surely ruffled Thursday morning in the wake of a front-page report in the Wall Street Journal suggesting that the cable industry will have to spend billions more on upgrades in order to stay competitive with fiber-to-the-premises (FTTP) networks being rolled out by Verizon and other telcos.

The WSJ story cited a leaked report created by CableLabs that provided thorough analysis of the FTTP threat and what cable’s options are.

Among the findings is that cable financials for upgrading plant to fiber-to-the-home will eventually be better than continuing to enlist various tools and levers that can squeeze more bandwidth from existing HFC (hybrid fiber/coax) networks.

The WSJ story did not specifically address what tools are available to operators, but it’s generally known that operators plan to use an array of methods well before they have to take fiber all the way to the home. Among those bandwidth-saving tools: node splits, switched digital broadcast, reclaiming analog spectrum, and migrating to MPEG-4 or other advanced compression schemes, to name a few. Operators also have the option of expanding spectrum beyond 750 MHz or 860 MHz, and into the realm of 1 GHz and higher.

Some top engineers quoted in the story also did not concur with all of the findings in the CableLabs analysis.

“I wholly disagree with the conclusions,” Time Warner Cable CTO Mike LaJoie told the paper. Time Warner, by the way, is a significant champion of switched digital video technology, having already deployed it in markets such as Raleigh, N.C.; and Austin, Texas.

Some assumptions in the report “are not reflective of what our reality is. This report does not reflect our view,” added David Fellows, the CTO of Comcast Corp.

People familiar with the CableLabs analysis are quick to point out that it does not suggest that operators need to make any quick moves to FTTP, but that the capacity it has now and the changes that can be made to existing 500-home nodes will give it plenty of room through the next four or five years.

Sources also indicate that CableLabs is not suggesting that FTTP needs to enter the cable picture in legacy markets until node sizes reach below 125 homes passed.

While the leaking of the report and subsequent coverage on Thursday morning caused a furor in cable circles, particularly at time in which investors were starting to cozy to cable’s outlook and its success with services such as IP telephony, it is likely also serving as sweet music to the ears of vendors that make FTTP gear.

So far, cable has for the most part foregone using FTTP, relegating it only to “greenfield” situations. Among recent deployments, CableOne Inc. has teamed with Wave7 Optics on an FTTP network that will serve a new residential development in Rio Rancho, N.M.

But, on the other side of the fence, Cox Communications has said previously it still prefers to use HFC for new builds because the architecture provides plenty of capacity and headroom.

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