MSOs power up HFC return path
Consumer demand for additional cable-TV services, the availability of lower-cost advanced analog set-top boxes and more than a million miles of installed hybrid fiber/coaxial-cable (HFC) networks have combined to convince multiple system operators (MSOs) that it is time to activate an HFC return path from the home.
With the widespread introduction of advanced analog set-top boxes similar to the 8600X from Scientific-Atlanta Inc., Norcross, GA, the push to upgrade existing HFC networks from "two-way capable" to "two-way enabled" appears to be gaining momentum.
For the past few years, cable-TV operators have been telling set-top box manufacturers that an HFC "return path" was available but inactive because a cost-effective home-terminal device that warranted activation of the path was not available. HFC networks essentially have fiber feeders and coaxial drops that early on provided cable-TV MSOs with operating efficiencies by shortening the long cascades of amplifiers necessary to deliver video signals into the home.
Today, those HFC networks--owned primarily by cable-TV MSOs--when linked with advanced analog set-top boxes, enable a limited return path for impulse pay-per-view buys and other "virtual channels," taking advantage of a cabling investment that went into the ground years ago.
By comparison, few telephone companies have coaxial cable in their existing networks because their plant was designed for two-way voice and data, and consists of a station-to-station fiber backbone with copper plant going to the premises.
According to industry analyst Mitch Shapiro, in Encinitas, CA, "There`s already a rush to get new plant up to 750-MH¥standards that can handle upstream and downstream capabilities, even though cable-TV MSOs have been more cautious about fully equipping that upstream portion of the network." According to Shapiro, the big question for MSOs has always been when consumer demand for two-way delivery would reach critical mass.
And Jeanne Snell, Lucent Technologies spokesperson in Denver, says, "That`s where the state of the current network is significant, because there`s a lot of installed, inactive fiber. What technology and the installed network base have been waiting for, however, is a market push."
In the view of Tim Wilk, director for planning and technology for the transmission systems division at Scientific-Atlanta, the market push is coming not from video- on-demand but from data. "In the wake of the Telecommunications Act of 1996 and the Internet phenomenon, cable-TV operators feel compelled to bundle existing and new services to retain their current subscriber base, fend off 175 channels of direct broadcast satellite and the threat of telephone company overbuilds, and do so in a way that can be `budgeted` over a reasonable payback horizon," says Wilk. "Set-top devices are catching up to what existing networks can deliver, and MSO cost/benefit models can justify the investment."
Wilk also points out, "Right now, the economics are in favor of an HFC upgrade. Applications are going to drive everything, and even though digital video can deliver a lot of channels, MSOs can do the same thing more cheaply with an analog box that also provides data applications." And advanced analog units maximize HFC plant right now, although networks will eventually be asked to support more services (see table).
Scientific-Atlanta`s 8600X set-top box, for example, represents 175% of the cost for a one-way analog device designed to encrypt premium channels, while delivering selected services and events to other paying customers. The 8600X, however, is designed to enable new types of revenue-generating services ranging from electronic program guides to provisioning virtual channels that don`t occupy traditional 6-MH¥slots. Virtual channels can accept local advertising and allow database and directory information to fit into the so-called video blanking interval.
The 8600X accepts downstream data at rates to 75 kbits/sec, and upstream data at about 20 kbits/sec (or about 38.8% faster than a 14.4-kbit/sec modem). It compares favorably with broadcast digital alternatives, which cost four or five times more than one-way analog units. Since Scientific-Atlanta`s advanced analog boxes came on the market in November 1994, the company has shipped nearly 900,000 units.
"Those shipments are our best-selling set-top terminal in the company`s history," says Bill Brobst, corporate spokesperson at Scientific-Atlanta. The company delivered its first set-top box more than a decade ago. In total, about 20% to 25% of the 24 million unit base of addressable set-top boxes could support impulse pay-per-view over HFC networks, according to Paul Kagan Associates, an industry consulting group in Carmel, CA.
From capable to enabled
Nearly 1.1 million miles of hybrid fiber/ coaxial-cable plant is currently installed in the United States, passing about 95% of all TV households, according to the Cable-TV Fact Book, an industry publication. That statistic implies an average household density of about 80 to 85 homes per completed network mile.
While that is a key indicator of what a low-cost solution HFC really is, a critical statistic contained in the data is that 63% of the top 100 systems are so-called "two-way" capable. That means a reverse signal path is already in the ground. Thus, at least one fiber is available to bring a return signal back to the headend, and it can be equipped with return amplifiers, then balanced, aligned and tuned to one or more National Television Standards Committee channels to provide additional service sets that generate additional revenue (see figure). However, "capable" doesn`t mean "enabled" or activated. That reverse path activation percentage is estimated to be 34% of the top 100 MSO network plant.
Cable-TV companies are rebuilding 12% to 15% of their installed plant annually, which suggests that much of that inactive fiber will be fitted with return-path electronics. Meanwhile, most of the larger MSOs have been active with reverse path work. Those companies include Time Warner, Comcast, TCI, Continental Cablevision and Cox. Time Warner has been looking for set-top boxes with analog/digital capabilities, and recently issued a request for proposal that Scientific-Atlanta and its partners responded to in different ways.
First, the company joined with Thomson Consumer Electronics in late April to collaborate on the development of an advanced digital video home communications terminal for HFC networks and proposed this terminal as part of a bid to Time Warner. Second, Scientific-Atlanta is working with Toshiba and Pioneer on an advanced box as part of a separate bid for that request for proposal.
Cox has also been aggressive in return path upgrades and has the additional benefit of clustered plant. Approximately 65% of its 3.2 million subscribers (sold into 5 million homes passed) are in large clusters in San Diego, Phoenix, New England, New Orleans and Hampton Roads, VA.
Cox expects to have 85% of its systems upgraded for digital video and cable-TV modem services by 1998. Like most of the MSOs, Cox is in the process of configuring larger nodes (serving 1000 or more homes) down to 500 home pockets. According to Merrill Lynch, the cost of splitting a node is about $10,000 for electronics, software and optical lasers. q
Paul Palumbo writes from Seaside, CA.