Cable’s fight with fixed wireless

May 31, 2024
A transition to fiber is necessary for cable operators to stay competitive. 

It’s not easy being a cable operator in the North American market right now.

That’s what Jeff Heynen, Dell’Oro Group’s vice president of broadband access and home networking, said during the Fiber Broadband Association’s “Cable’s path to fiber” webinar. And it’s a common sentiment.

The largest cable operators have reported net broadband subscriber losses, and Heynen believes this is due to fixed wireless access (FWA) competition as well as an increase in footprints and expansion of fiber overbuilders.

“In a market where cable operators have historically faced little competition, they now are facing significant competition and are having a difficult time keeping up and are certainly going to have to change their strategies in certain markets.”

Heynen gave T-Mobile as an example of FWA expansion, noting that its recent acquisition of US Cellular will expand its rural FWA footprint. But T-Mobile still understands the importance of fiber.

“T-Mobile has always known that capacity constraints are an issue on the fixed wireless side,” he said, “so they’re acquiring Lumos for FTTH expansion, but then also doing partnerships with SiFi, Intrepid Networks, and others that provide open access fiber networks, to become an ISP and be able to expand their coverage of fiber services and take advantage of the branding and customer cache that they have on the broadband side through that fixed wireless service.”

The housing market isn’t helping cable operators either. People are moving less, and housing start rates remain low—two factors that Heynen says drive new subscriptions. Add to that the end of the Affordable Connectivity Program (ACP), and you have a recipe for a challenging environment.

Despite this, Heynen reported some silver linings. For one, FWA subscriber growth is leveling off.

“The growth on a quarterly basis is starting to peak, and some of those capacity constraints in densely populated areas and even in some urban areas—those remain unchanged, so the fixed wireless operators aren’t going to jeopardize the higher margin mobile subscribers and the performance of those networks to support those services anymore,” he said.

But for cable operators to stay competitive, they must evolve.

“People still continue to value their broadband subscriptions,” he said, “and generally, when they are satisfied with the value that a broadband provider is giving them, they stick and stay loyal to those providers. And that nets higher ARPU in addition to the new services that all operators are trying to provide.”

How are cable operators evolving?

According to Heynen, cable operators are increasing CapEx to support upgrades to DOCSIS 3.1 as well as DOCSIS 4.0 rollouts, but many of these operators still have limitations with upstream bandwidths across their systems.

“They’re working hard to do mid and high splits where they can in order to improve that upstream bandwidth to remain competitive and also to adhere to some of the requirements of 100 Mbps/20 Mbps for the BEAD qualifications,” he said.

Heynen described a path forward in which Tier 1 operators implement DOCSIS 4.0 in current areas and use fiber for new expansions, and smaller operators temporarily use DOCSIS 3.1+ before switching to fiber.

“Regardless of either of these paths that an operator chooses,” said Heynen, “there are equipment and technology updates that all of these operators are investing in today to improve the signal quality and performance of their networks.”

Heynen said that DOCSIS 4.0 rollout is being inhibited by factors like a lack in availability of outside plant pieces and difficulty securing labor. Additionally, DOCSIS 4.0 will be delayed by the presence of DOCSIS 3.1+, which will extend the lifespan of the CCAP platforms.

“Some of the larger deployments like Charter and Cox and Comcast—some of those rollouts are simply going to take longer, I believe, than what we anticipated before.”

Heyen reported that shipments of customer premise equipment (CPE) units are increasing, and he predicted that most units purchased in 2024 and 2025 will be for DOCSIS 3.1+.

Transition to fiber

According to Heynen, many operators are already on the path to fiber, a trend that he said can be gleaned from increasing deployments of remote optical line terminals (R-OLTs).

“There is a long-term path for every cable operator toward fiber,” he said. “Some are on that path and have already made that transition today, and those numbers are reflected in some of the R-OLT numbers. R-OLTs have become a preferred platform for cable operators who already have outside plants and are working to offer fiber in adjacent markets.”

Heynen reported that Charters’s Rural Digital Opportunity Fund (RDOF) initiative drove R-OLT deployments in 2021 and 2022 and says operators will continue to use and rely on R-OLTs because they can be integrated into existing node locations.

“These node locations typically have local powering,” he said. “They also already have pedestal access in some cases, and so all the equipment necessary to support basically peeling off new markets or expanded markets from those existing node locations that may be supporting hybrid fiber-coaxial (HFC) customers today but in the new markets will be supporting fiber.”

OLT deployments also depend on adoption rates, according to Heynen, in addition to BEAD wins and continued RDOF buildouts.

“There’s no question that cable operators are in the mode of greenfield buildouts being fiber-based,” he said, “and now, because of some of the challenges in terms of the overall market, in terms of competitiveness, there’s a need to switch over to fiber for a long-term comfort level they may not have with HFC.”

The transition to fiber is also being hastened by the capabilities of distributed access architecture (DAA), particularly virtualized cable modem termination systems (vCMTS).

“vCMTSs provide operators with a software-based platform that does edge processing and can function as a virtual broadband network gateway (vBNG),” said Heynen. “So, the challenges that existed before—in terms of managing subscribers and traffic flows as you did historically differently between a DOCSIS environment and a fiber environment—some of those things now get eliminated and sort of centralized in a single platform that’s software-based and so it becomes easier for operators to begin to mix and match which physical media they end up using in their networks.”

For related articles, visit the Broadband Topic Center.

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About the Author

Hayden Beeson

Hayden Beeson is a writer and editor with over seven years of experience in a variety of industries. Prior to joining Lightwave and Broadband Technology Report, he was the associate editor of Architectural SSL and LEDs Magazine. 

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