Fiber Is the Future for the Cable Industry

Jan. 12, 2023
The increasing use of terms like "Fiber+" to market HFC-delivered services underscores cable MSOs' awareness of the inevitability of an all-fiber future.

If you still had any lingering doubts that fiber represents cable’s future, then consider some of the industry’s latest rebranding initiatives.

Over the past year or so, we have seen several notable cable companies in North America, Europe and the Asia-Pacific region start flaunting “Fiber+” or “Fiber Plus” branding on broadband products delivered over their hybrid fiber/coax (HFC) networks. Other operators are bound to follow, as CableLabs President and CEO Phil McKinney indicated recently in a revealing talk with Craig Moffett, a prominent Wall Street analyst at MoffettNathanson, about the future of cable’s HFC networks.

“There’s a Fiber+ branding effort that really got started in Europe first,” with ONO in Spain (now Vodafone Spain), McKinney told Moffett in the recorded interview. He noted that after the move sparked a legal battle with Telefónica, the incumbent telco in Spain, over what exactly constituted a fiber network, ONO won the case by demonstrating that it effectively operated its own fiber network.

Increasingly, ONO is not alone. Other cable providers around the world have also started slapping “Fiber+” branding on their broadband services and touting the fiber-rich nature of their legacy HFC networks. Besides ONO, the roster includes GCI, the biggest cable operator in Alaska, Shaw Communications, the second largest cableco in Canada, and Vodafone New Zealand.

Last May, for example, GCI Chief Product Officer Duncan Whitney posted a blog about the company’s use of Fiber+ branding to promote its new 2-gig broadband service. He boasted that GCI’s network now features nearly 8,500 miles of fiber-optic cabling, including some 6,000 miles of subsea fiber. In addition, GCI is working on its “United Aleutians Fiber Project,” which will deploy more than 800 miles of subsea fiber to serve as the backbone for 2-gig and other services for remote Aleutian communities in the extreme western end of the state.

In cases where laying fiber is not yet an option, Whitney wrote, “we bridge the gap using a blended network of supplemental technologies, which enables us to keep more Alaskans connected to the world. We call the entirety of this evolutionary network GCI Fiber+.”

For its part, Shaw now uses its “Fibre+” brand to promote the fastest data services delivered over its widely deployed HFC network in western Canada. The cableco rolled out that initiative after it, like ONO in Spain, defeated a lawsuit from rival Telus that challenged the fiber branding. Currently, Shaw’s service offers data speeds as high as 2 gigs down and 1 gig up.

“We are proud of our Fibre+ network…and stand behind its branding and strength,” a Shaw spokesperson told the Business in Vancouver publication in a statement. “We call it Fibre+ because it is truly that: fibre plus more.”

HFC is a fiber network

CableLabs’ McKinney made a similar point in his discussion with analyst Moffett, stressing that the cable industry’s legacy HFC networks are mainly packed with fiber lines, not coax cable. Thus, he argued, those networks are not that much different from the fiber-to-the-premises (FTTP) networks that cable’s rivals are now aggressively deploying throughout the U.S., Canada, Europe and the rest of the world.

“People think of the HFC network as being primarily coax,” McKinney told Moffett, according to a posted transcript of the interview. “If you look at a packet of data that transitions across the cable network, it spends 99.97% of its time on fiber. So, the cable network is effectively a fiber network. It’s using the coax for only the last 100 feet, because that was what was deployed over many, many decades to build that out into the infrastructure. So, for all intents and purposes, cable is a fiber network.”

McKinney also argued that cable’s use of Fiber+ branding “educates the marketplace to the reality that what you may think of as an HFC network, and this perception that it’s coax that's going literally miles and miles back to some location, is not the case.”

Other top cable-tech executives are starting to make the fiber case for cable as well. Take Elad Nafshi, executive vice president and chief network officer of Comcast Cable. Speaking at the RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference in November, Nafshi stressed that cable’s HFC networks already consist mainly of fiber, with coax accounting for just the link to a mere “few hundred feet” to the subscriber’s home.

In defense of HFC

Of course, these early moves to embrace fiber branding do not mean that the cable industry will, or should, junk its HFC networks and DOCSIS technology or the terminology for them overnight. Far from it.

Indeed, in his conversation with Moffett, CableLabs’ McKinney spent much time defending HFC and DOCSIS. He insisted that DOCSIS technology will last a long time and that cable’s use of FTTP lines may well be limited to certain situations, such as serving commercial and heavy-use residential customers in major markets. He also touted the relatively low estimated expense of upgrading to DOCSIS 4.0 compared to the costs of upgrading to full-fiber networks, citing some recent analyst projections that it would cost less than $200 per home passed to upgrade cable’s HFC networks to the next-gen DOCSIS specification.

Yet the future remains FTTP

Yet, even with these caveats, the cable industry’s pivot to fiber branding is a clear sign that operators see FTTP as their future, whether it’s a near-term, mid-term or long-term goal. McKinney all but acknowledged that in his discussion with Moffett.

“What we’re seeing in the fiber build is edge outs, taking the edge of the network and pushing it into the next community or the next group of homes,” he said. “Everybody should be deploying fiber in any form of greenfield deployment because you have the construction cost. It’s not the cost of the fiber or the cost of the coax or the gear. It’s the labor cost of construction that is the biggest barrier.”

The CableLabs CEO also noted that there are already a few cable operators that “are overbuilding themselves and deploying fiber, rather than have someone else overbuild [them].” Two prominent examples of this trend are Altice USA (in the U.S., of course) and Virgin Media in the UK.

Given the industry’s emphasis on deploying more FTTP lines and need to compete with new fiber rivals, we can expect to see more and more cable operators adopt “fiber” branding in their marketing efforts. McKinney broadly hinted as much in his discussion with Moffett.

“You’ll see more and more of that,” he said, without disclosing the names of any likely candidates. “Stay tuned. There’s more to come on that.”

It certainly makes sense that cable operators are seeking to rebrand themselves as fiber providers. After all, while DOCSIS 4.0, Distributed Access Architecture (DAA), spectrum mid-splits and high-splits, network virtualization, and other new industry technologies offer plenty of promise for the future, they still cannot support the maximum speeds, high reliability, low latency levels, lower operating expenses, and other benefits that only all-fiber networks can deliver.

So it’s all just further evidence that top cable executives increasingly recognize that fiber represents their future. Even if they all don’t quite say so openly yet, they seem to realize that it’s only a matter of time before cable goes all-fiber--or at least mostly fiber.

Cable’s growing embrace of fiber branding is also in line with other fiber-friendly moves that the industry is now undertaking. Besides flaunting their fiber bona fides, operators are increasingly building their own FTTP networks and line extensions and even starting to invest in pure fiber providers.

A prime example of the latter is Cable One, the sixth largest cableco in the U.S. Speaking on the company’s third-quarter earnings call in early November, Cable One Chair and CEO Julie Laulis revealed that her company has plunked $50 million into Zigby Fiber, a fiber service provider formed from its recent acquisition of Frontier Communications’ operations in Washington, Oregon and Montana. While that sum amounts to less than a 10% stake in Zigby Fiber, it still represents a significant investment for the cable operator, prompting Lauilis to refer to Zigby as her company’s “newest strategic growth partner.”

Further, as I have pointed out in my previous BTR columns, cable operators are increasingly stepping up their spending on fiber-friendly PON equipment as they install more fiber links in their regions and seek to supplement their DOCSIS deployments over HFC.

Jeff Heynen, vice president of broadband access and home networking market research at Dell’Oro Group, has been documenting this trend in his quarterly reports. In his latest research report, Heynen found that cable operators spent a record $17.8 million on remote optical line terminals (r-OLTs) in the third quarter of 2022, up from $9.3 million in the previous three-month period and just $2.9 million over the same period in 2021. While that latest quarterly total is still relatively low, he noted, it is still about six times higher than it was just a year earlier.

“I am definitely seeing [an increase] among Tier 2 and 3 operators in North America who, in a number of cases, are using RDOF (Rural Digital Opportunity Fund) money for edge-out projects using r-OLTs,” he wrote in an email response to my questions. “It is beginning to pick up significantly from last year, especially as some larger Tier 1s get involved (Charter, Liberty Global, Vodafone, J:COM).”

Finally, cable operators are embracing fiber branding as they seek to reinvent themselves as not merely cable providers, but as broadband players. In the latest example of this marketing makeover, the NCTC recently switched its full name from the National Cable Television Cooperative to the National Content & Technology Cooperative.

The bottom line is that fiber is “in” and cable is “out” in cable-industry circles these days. Might the National Cable Television Association (NCTA), which has already added “The Internet & Television Association” to its branding, be the next nomenclature domino to fall? I wouldn’t bet against it.

Gary Bolton is president and CEO of the Fiber Broadband Association.

About the Author

Gary Bolton | President and CEO of the Fiber Broadband Association

Gary Bolton is president and CEO of the Fiber Broadband Association.

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