May 12, 2008
All-Digital and Switched (continued)
By Jonathan Tombes
Has the pendulum swung away from switched digital video (SDV) and toward an all-digital delivery of TV service? If so, will it swing back to SDV?
Whether and when to deploy SDV is a matter that turns on several variables, headend economics being one of the critical factors we identified in this March 7 issue of CT Reports. As noted then, the economics - and regulatory incentives - for a small operator such as Massillon Cable TV (which runs only two systems) apparently conspire in favor of all-digital.
What about for someone like Comcast? Does it make sense at that end of the MSO spectrum?
Don't forget truck rolls
A recent posting by industry gadfly and LightReading Cable Digital News Chief Analyst Michael Harris speculated on the costs of Comcast's announced plans to go all-digital in 20 percent of its footprint by yearend. Specifically, in his Comcast 30-to-1 Odds note, he compared those possible costs with - not SDV - but with what Verizon appears to be spending for its FiOS build.
It's a provocative exercise, but something is perhaps undercounted in Harris's back-of-the-envelope calculations, namely a recognition of how much interaction with customers an MSO is likely to have in an all-digital transition.
Overlooking or minimizing the expense of truck rolls is easy to do. Massillon President Bob Gessner's analysis of "Spectrum Expansion" options at the NCTC Winter Educational Conference in February focused primarily on an estimated $10 million charge he faced for customer premise equipment (CPE) alone.
One hopeful scenario is customer self-installation. But how realistic is that? There is little data to draw from, but a truck-roll metric we heard from someone close to one of the industry's few all-digital deployments was about 90 percent; or in other words, only 10 percent successful self-installs.
And how expensive are those truck rolls? That depends on the market. It could be twice or three times or even four times the cost of the hoped-for, no-frills $35 digital-to-analog (DTA) adapter that MSOs will need to carry all the TV sets of their subscribers into the era of all-digital video reception. Even if an operator is figuring two DTAs per house, that adds up to significant upfront costs.
Granted that switched and all digital are complementary rather than mutually exclusive, let's look again at the question of timing, or what to do first.
Some of that is technology related. When will these DTAs be ready to ship? As we noted in this February 19 issue of CT Reports, Evolution Digital was showing a no-frills DTA at the NCTC Winter Educational Conference. But Comcast, and the industry at large, would need millions of these things.
As for SDV, are all the vendors ready for prime time?
Comcast's delays on SDV have "nothing to do with the technology," one insider told us last week. However, others are telling us that technology-related delays are impacting some vendors.
For its part, BigBand Networks issued pre-Cable Show news last week aimed at underscoring its leadership in this arena. The features it is touting - variable bit rate (VBR) encoding, video over DOCSIS (IPTV), advanced advertising - all fall into the category of what vendors would have considered two years ago to be second generation SDV.
But there likely will be SDV product news from the other players in this space, namely Motorola, Cisco Systems and Arris. And eventually Verivue will open its curtain ....
As for technology papers and discussions, the session scheduled for Sunday afternoon in New Orleans and to be moderated by Comcast Executive Fellow Dave Fellows and including presenters from BigBand (Doug Jones), Cisco (Xiaomei Liu and Dave Lively) and Motorola (John Ulm) may provide clues on which way the pendulum is swinging.
One clue that the industry remains in test phase for SDV comes from itaas, a company with considerable digital video and on-demand expertise, which released what it calls the industry's first SDV client simulator. In a statement, itaas said this simulator, "already in lab trials with a major MSO, allows cable operators to road test SDV services in order to confidently release and scale the technology."
Test away, but a clock is ticking. The alarm may sound in high-definition as this year's holiday season approaches. Whether it's all-digital or SDV (or both or something else), the cable industry will need a strong HDTV story when it comes to both deep fiber and MPEG-4 powered DBS competition.
- Jonathan Tombes
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