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33
Cable Television Technology Deployment
Richard R. Green
Cable Television Laboratories Inc.
The national information infrastructure (NII) is envisioned as
having several components: an interconnected web of networks;
information content, consisting of technical and business
databases, video and sound recordings, library archives, and
images; the software applications necessary for users to access and
manipulate these stores of information; and the network standards
that promote interoperability between networks and guarantee the
security of information transmission. This infrastructure will
potentially connect the nation's businesses, schools, health care
facilities, residences, and government and social service agencies
through a broadband, interactive telecommunications network capable
of transmitting vast stores of data at high speed. Because
information is a crucial commodity in an increasingly global
service economy, the NII is of critical importance to the
competitiveness and growth of the United States.
The cable television industry is providing a significant part of
the technological infrastructure needed to make this
telecommunications network a reality. This white paper discusses
trends, predictions, and barriers surrounding the deployment of an
advanced cable television network architecture over the next 5 to 7
years. This discussion lays the foundation for the subsequent
consideration of the trends, projections, and barriers to the
deployment of new services over that advanced cable
architecture.
Trends in Cable Television Network
Deployment
New technological developments within the cable industry are
transforming the existing cable architecture into a
state-of-the-art, interactive conduit for the NII. These
developments are outlined in detail below.
The Evolution of Cable
Cable television reached its current form during the mid-1970s
when the technology was developed that allowed cable customers to
receive satellite transmissions via the cable architecture that had
evolved from its beginnings as Community Antenna Television. This
new delivery system enabled cable companies to offer customers more
channels than standard terrestrial broadcasting companies. Cable
then surpassed its original mandate to bring television reception
to rural or obstructed areas and became a means for delivering new
types of programming through specialty channels for sports, news,
movies, home shopping, weather, and so on, and through pay-per-view
channels. Cable television is a major video service provider, with
63 percent of all U.S. TV households subscribing to cable. As
significant, 97 percent of U.S. households have access to cable
facilities, making cable a nearly universally available
telecommunications infrastructure.
Cable television historically operated through the technology of
coaxial cable, implemented in a "tree and branch" architecture.
Video signals, in analog format, from satellites, broadcast
transmissions, and local television studios are received or
generated at the cable facility's headend, which serves as the
point of origination for the signals to be distributed to
subscribers via coaxial cable. A trunk cable carries the signal
from the headend to the feeder cable that branches from the trunk
into local neighborhoods. Signal amplifiers are placed into
this
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coaxial cable network to prevent the signal from degrading over
distance and producing noise or distortion. Finally, a drop cable
is run from the feeder cable into a subscriber's home and is
attached to the television set.
Channel capacity for cable systems has grown from an average of
12 channels, mostly retransmission of broadcast signals, to an
average of over 40 channels today. The number of cable subscribers
served by systems with 30 channels or more has doubled from 48.7
percent in 1983 to 95.4 percent in 1993. Channels provided now
include satellite delivered cable programming, and a variety of new
educational, shopping, and entertainment networks. Using this same
architecture as a platform, cable companies are currently exploring
their role in the NII by initiating new applications and offering
access to other networks and resources, such as the Internet. The
expansion of cable's role in the NII requires building on the
foundation that was laid over the last 20 years.
The Role of Fiber Optics
The cable industry has been upgrading its coaxial cable
infrastructure into a hybrid fiber optic/coaxial cable (HFC)
network. Cable companies have installed fiber-optic trunk lines to
replace these major arteries of the cable architecture with wider
bandwidth (higher capacity) links. Optical fiber is constructed
from thin strands of glass that carry light signals faster than
either coaxial cable or twisted pair copper wire used by telephone
companies. It allows signals to be carried much greater distances
without the use of amplifiers, which decrease a cable system's
channel capacity, degrade the signal quality, and are susceptible
to high maintenance costs. With further upgrades, hybrid
coaxial/fiber technology will also be able to support two-way
telecommunications. Therefore, a broadband cable network that is
capable of delivering more channels as well as high-quality voice,
video, and data can be created without replacing the feeder and
drop lines with fiber optic technology. This is the reason that the
cable industry is perhaps the best positioned industry to deliver
on the promise of the NII with a reasonable and prudent amount of
investment.
Cable companies began widespread installation of fiber
technology into the trunk of the cable architecture during the late
1980s. This use of fiber improved signal quality and lowered
maintenance costs. In effect, fiber upgrades paid for themselves in
terms of immediate cost reductions and service quality
improvements. At the same time, the installed base of fiber served
as a platform for further deployment of fiber to serve new business
objectives.
In the early 1990s, cable further pioneered the installation of
"fiber trunk and feeder" architecture in some of its markets. This
approach runs fiber deeper into the network, segmenting an existing
system into individual serving areas comprising roughly 500
customers. Time Warner provided a "proof-of-concept" of this
approach in Queens, N.Y., with its 1-gigahertz, 150-channel system
completed in 1991.
This evolutionary step offered a number of benefits. Backbone or
trunk fibers may carry a multitude of available cable channels out
to fiber "nodes," and remaining coaxial cable to the home can carry
a particular targeted subset of the available channels. Thus,
customers may be presented with more neighborhood-specific
programming. Penetration of fiber deeper into the network also
reduces the number of amplifiers, or active electronics, remaining
between the subscriber and the headend. In some designs, amplifiers
may be entirely eliminated, resulting in a so-called "passive"
network design. Removal of amplifiers considerably simplifies the
use of the coaxial cable for return signals from the home or office
back to the headend and beyond. The portion of bandwidth reserved
for return signals, usually in the 5- to 40-MHz portion of the
spectrum, is often subject to interference and other impairments.
Any remaining amplifiers must be properly spaced and balanced, a
labor-intensive process that must by performed on an ongoing basis.
Other technical impairments are unique to the return path, and
technical solutions must be optimized. These obstacles are the
focus of current industry research and product development. A Cable
Television Laboratories (CableLabs) request for proposals issued in
the fall of 1994 has spurred a number of technology companies to
accelerate the refinement of technology to address return path
issues. It appears that the full two-way capability of the coaxial
cable, already installed to 90 percent of homes, will be fully
utilized beginning in the next 12 to 18 months.
Full activation of the return path will depend on individual
cable company circumstances ranging from market analysis to capital
availability. There may be intermediate strategies employed by some
of these companies to speed the deployment of two-way or
interactive services. Such strategies might include alternative
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return paths offering support for asymmetric services, services
that may require a narrowband information signal that triggers
delivery of broadband downstream information. Narrowband
return-path options include wireless technologies such as personal
communication service (PCS) or use of the public telephone network
for Touch-Tone signaling or use of a narrowband modem.
Hybrid networks, then, are capable of delivering a variety of
high-bandwidth, interactive services for a lower cost than fiber to
the home, and still provide a graceful evolutionary path to full,
two-way, broadband communications. Cable companies estimate that
most subscribers will be connected to cable via fiber-optic
technology by 1996 to 1998.
The Transition to Digital
Television
Digital compression is another technological development that
will vastly increase channel capacity in addition to fostering
interactivity and advanced services via cable. In contrast to
current analog technology, which can collect noise (such as shadows
or snow) during transmission over the air and through cable,
digital compression technology delivers a signal sharply and
clearly while employing a fraction of the bandwidth used by analog
technology. Digital technology converts a video signal into a
binary form that is stored in a computer, compressing signal
information into a fraction of its original size while still
permitting its easy transformation into video signals for
transmission. The result is that approximately 4 to 10 digital
channels can be delivered over the same bandwidth historically
required to deliver 1 analog channel.
Thus, compression technology will enable cable customers to have
a greater diversity of programming options such as delivering niche
programming to narrowly targeted audiences, expanded pay-per-view
services that will rival the video rental market, multiplexing
channels (carrying a premium movie service on several different
channels with varying starting times), and high-definition
television. Digital compression upgrades make economic sense for
consumers as well, since the converters necessary to decompress
digital signals will be provided only to those cable customers
subscribing to these new services.
The cable industry has led the development of digital
compression technology, and standards for digital compression have
been established. The cable industry's innovative work with digital
television was spearheaded by CableLabs' 1991 efforts with General
Instrument Corporation and Scientific-Atlanta to form a cable
digital transmission consortium, which emphasized cable's
leadership role in the creation of digital transmission.
technology. CableLabs has worked with the industry to foster
convergence of digital coding and transmission for cable industry
application, to provide technical support for the cable industry's
work with the consumer, computer, home electronics, and
entertainment software industries, and to cultivate awareness of
digital compression technology. Cable companies will be ready to
commence the delivery of the technology after hardware/software
protocols are implemented. The industry is working to encourage its
vendors to accelerate development, and CableLabs recently invented
a universal analog-digital demodulation technique to enable the use
of equipment using different forms of modulation being used by
different vendors.
The cable industry also has looked closely at the impact of
deploying digital video compression technology in the real world.
CableLabs conducted a 2-year digital transmission characterization
study, to (1) determine how well cable systems can transmit
high-speed digital data, (2) gauge the maximum bit rate that can
reliably transmit compressed video and audio, both NTSC and HDTV,
and (3) identify the optimum modulation techniques for achieving
three goals: maximum data rates, minimum data errors, and minimum
costs for terminal equipment. This information has been distributed
to vendors so that they understand the world in which their
equipment must perform.
Advanced Television
Cable's leadership in digital compression manifested early in
the development of high-definition television. This form of
advanced display technology allows cable companies to bring
subscribers a television picture with greater clarity and
definition than current transmission standards permit. In the NII,
new forms of
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information and video display will be just as important as new
and expanded transmission media, and telecommunications companies
must design networks that support such display technology.
The Federal Communications Commission convened a committee in
1987 to develop a broadcast standard for high-definition video
transmission. Although Japan's NHK-MUSE analog solution was favored
owing to its early deployment in Japan, cable industry-led efforts
proved that a digital solution was a better choice for reasons of
flexibility and efficiency. Since that time, cable industry
representatives have worked with the FCC's Advisory Committee on
Advanced Television Services to develop an industry digital
compression standard. The cable industry presently has the
broadband capacity to transmit HDTV; in fact, several cable systems
in the United States and Canada already have experimented
successfully with the delivery of HDTV in several locations, and
CableLabs is working on further testing of HDTV standards of
transmission.
Regional Interconnection
An important architectural and economic component of cable's
ongoing evolution is the construction of regional fiber optic
networks to link headends and ''regional hubs," so that cable
operators in the same region can share services with one another in
order to eliminate headends. Capital intensive network components,
such as video storage, signal compression, or advertising
insertion, may be shared among operators in a regional hub, thereby
permitting operators to offer more services to customers. Beyond
the economic benefits, regional hub designs allow cable operators
to interconnect with other telecommunications services so that
cable can provide video, audio, and textual data to homes and
businesses from a variety of sources, and subscribers can request
the delivery of specified services (such as electronic newspapers,
home shopping, or video teleconferencing). Regional hub systems are
being built in San Francisco, Denver, central Florida, Boston, Long
Island, and Pennsylvania, among many other markets.
Interconnection of cable headends with each other and with other
types of networks raises issues of interoperability. Cable already
has the incentive to work toward standards for video transmission
and other services in order to link cable systems together. Such
standards must be extensible to other types of networks and have
global compatibility as well. Both the cable industry and its
competitors acknowledge that interoperability is critical to
successful deployment of, and access to, the NII; thus, there is a
great incentive for industries to cooperate to arrive at standards
and otherwise foster open networks.
For example, CableLabs has tested the MPEG-2 (Moving Picture
Experts Group) standard for compression and decoding of digital
video and audio bitstreams, which allows software, hardware, and
network components from different manufacturers to communicate with
one another. The MPEG-2 standard will likely be implemented in
1995. Cable is also active in the ATM Forum, an international
consortium chartered to accelerate the use of ATM products and
services. ATM refers to a cell switching technology featuring
virtual connections that allow networks to efficiently utilize
bandwidth. The cable industry views ATM as a technology with great
long-term potential, and the ATM Forum is a useful venue to discuss
interoperability specifications and promote industry cooperation.
The ATM Forum is not a standards body but works in cooperation with
standards bodies such as ANSI and CCITT. And finally, CableLabs has
taken a leadership role in the Digital Audio-Video Council (DAVIC)
that was recently created to promote interoperability among
emerging digital audiovisual applications, such as video on demand,
particularly in the international marketplace. This
interoperability among technologies will ensure that technological
development will be less costly, that the free flow of information
is promoted, and that the NII will be brought to consumers more
quickly.
Information Technology
Convergence
Cable is in the thick of communications and information
technology convergence activity. As part of the ongoing development
of cable technology applications, the cable industry is launching
initiatives with the computer industry to combine high-capacity
transmission with the latest developments in software technology.
For example, software developments will enable cable carriers to
provide the "road maps" customers will need to
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navigate the information superhighway (such as interactive
program guides). Other developments will allow cable to offer
expanded services, such as teleconferencing, transaction
processing, and home shopping. Intel and General Instrument, in
conjunction with Tele-Communications, Inc. (TCI), and Rogers
Cablesystems of Canada, are working to create a cable delivery
system that is capable of sending data to personal computers at
speeds that are up to 1,000 times faster than today's modems. Intel
is also developing services tailored to the cable market, including
multimedia online services, personal travel planning, software
distribution, and Internet access, which will allow the personal
computer to become a powerful communications tool in the
foreseeable future. Elsewhere, Silicon Graphics is playing an
integral role in Time Warner's Full Service Network in Orlando,
Fla. And Microsoft recently announced the demonstration of its
server software architecture called Tiger for the delivery of
continuous media, such as voice and video on demand. Tiger, which
is deployed in a cable system's headend and in software for in-home
receivers, is being tested by Rogers Cablesystems Limited in Canada
and by TCI in Seattle.
Outlook for Future Deployment of Cable
Television Architecture
Cable companies plan to invest about $14 billion to institute
equipment and plant upgrades through the end of the decade. Some
cable companies now predict that the construction of fiber/coaxial
hybrid networks will be complete between 1996 and 1998. Upgrade
costs for this hybrid network are relatively low since cable's
broadband coaxial cable to the home is already in place, making the
total investment in broadband/digital technology cheaper for cable
than for competitors, such as telephone companies, to develop. The
cost of media servers (the digital storage devices that cable
systems will use to handle simultaneous requests for data, voice,
and video services to the home) and of set-top boxes or home
terminals that consumers will use to access multimedia and other
digital services are relatively high at present, but will decline
as production increases. Set-top boxes with digital decoders, which
will bring such services as movies on demand and on-screen program
guides to the home, are expected to be widely available in 1996 to
1998. Costs of servers and switching technology that could bring
advanced services such as true video on demand or video telephony
are expected to continue to fall and will likely be incorporated
into cable architectures around the end of the decade.
Today, fiber nodes are being installed, upgrade planning is in
progress, regional hubs are being developed, and a number of cable
MSOs are conducting near-video-on-demand, video-on-demand, or full
service network trials, in places like Orlando, Fla., Omaha, Nebr.,
and Castro Valley, Calif. Satellite-based video compression,
near-video-on-demand services, and some first generation
interactivity, such as customer navigation or program selection,
will be deployed in 1995 and 1996.
By 1997 and 1998, 750-MHz upgrades should be complete in many
areas, with that capacity likely allocated to 78 analog channels
and the equivalent of 100+ digital channels. Also in this time
frame, near-video on demand will be a mature service, second
generation interactivity will begin to appear, and deployment of
telecommunications services such as telephony, personal
communication service (PCS), high-speed data, and perhaps video
telephony will begin. By 2000, broadband, full-service networks
will be widespread, featuring ATM/SONET technology, media servers
used to provide true video on demand, full motion navigation tools,
and advanced television services.
Barriers to Future Deployment of Cable
Network Architecture
The ability of cable companies to make necessary investments in
network upgrades and new technology may be affected by regulatory
issues currently being debated within Congress. The telephone
companies' state-regulated monopoly over local telephone service is
a primary hindrance in the development of a competitive
telecommunications marketplace. Moreover, the rate reregulation
mandated by the Cable Act of 1992 has amounted to a loss of $2
billion in cable industry revenue through 1994. Capital formation
critical for technological development requires a stable and
competitively neutral regulatory environment. The cable industry's
development of the hybrid fiber/coaxial network has nevertheless
resulted in cable's increased ability to
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act as a competitor with telcos since the hybrid system provides
a higher capacity than phone companies' twisted pair wire.
Legislation is being debated in Congress that explores the
possibility of eliminating the barriers to entry into local cable
and telco markets and preempting state regulations that deter phone
companies from making their network available for use by the cable
industry. Regulatory reform efforts are under way in many states as
well. State-imposed restrictions on competition within local
telecommunications markets must be lifted so that cable companies
can develop competitive services on a national scale; otherwise the
information infrastructure may not become national in character.
Moreover, competition must be promoted so that consumers can choose
among service providers and so that diverse services will be
available.
Trends in Telephony Deployment
This discussion has described the historical and prospective
evolution of cable television architectures to deliver
entertainment and educational video. This deployment has reached a
watershed in that evolution, as the existing cable platform becomes
capable of delivering a range of new services, including
competitive telephony services.
Telephone service has historically been a monopoly service, but
this situation began to change with the opening of the old Bell
systems as early as the 1950s. By the 1970s, long-distance markets
had become competitive, and technological and regulatory forces led
to the divestiture by AT&T of its local telephone companies. In
the 1980s, further advances in technology led to the birth and
rapid growth of competitive telecommunications companies, called
Competitive Access Providers (CAPs), that targeted network access
services connecting local telephone customers to interexchange
carriers. Such competitive options were initially limited to large
business customers, but the trend has led inexorably to the need to
open up the local loop to competition. This trend has led a number
of cable television providers to recast themselves as full-fledged
cable telecommunications companies. Several cable companies operate
competitive access subsidiaries, and a consortium of cable
companies now owns Teleport Communications Group, one of the two
largest competitive access companies.
Outlook for Deployment of Telephony
Services
Many cable companies are assessing their technological and
financial capabilities for competing in the telecommunications
business. The advanced capabilities being provided by the evolving
cable architecture will provide a platform capable of providing
telephony services. A request for proposals (RFP) for
telecommunications service was issued by CableLabs in 1994, and the
RFP served to announce the intent of six leading cable companies to
buy up to $2 billion worth of hardware and software. This equipment
would enable cable operators to provide telephone service to
residential and business customers over cable television hybrid
fiber/coax networks. The RFP has focused vendors on devising
affordable answers to issues of reliability and bandwidth
management of multiple services over the same HFC network. Further,
cable companies are fully aware of the particular demands of
lifeline telephone service, and the RFP stipulates requirements for
full network reliability.
Regional hub evolution has already led a number of cable
companies to deploy class 5 telecommunications switches.
Continental Cablevision in New England, Cablevision Systems on Long
Island, and Time Warner in Rochester, N.Y., and Orlando, Fla., are
among the companies that have done so, aggregating a large number
of customers on a regional basis in order to share costs.
Cable companies Tele-Communications, Inc., Comcast, and Cox
Cable formed a consortium with Sprint in 1994 to provide
telecommunications services nationwide. The consortium's initial
action was to participate in PCS spectrum auctions, but plans also
commit the companies to invest in network upgrades and to provide
capital to other cable companies that may wish to upgrade plant in
order to participate in the telecommunications venture.
Time Warner in Rochester, N.Y., may be the first cable company
to provide head-to-head competition with a local telephone company.
Regulatory actions have cleared the way for competition, and Time
Warner has
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devoted resources to upgrading its HFC network in Rochester and
installing a complete service management system accommodating
back-office functions such as billing.
Personal Communication Service
Personal communication service, or PCS, is a form of wireless
two-way communication using a lightweight handset similar to
cellular telephone technology. This technology is compatible with
existing cable network architectures. Using microcells that
transfer a user's call from one cell to another as the user
travels, PCS uses the cable industry's fiber optic backbone and
feeder plant to interconnect the cells, and thus cable has a
built-in advantage over other potential providers by virtue of an
existing infrastructure. PCS will distinguish itself from cellular
telephone service primarily by its lower cost and greater
convenience. More than 26 cable companies received FCC approval to
test PCS technology. Cox Cable received the FCC's "pioneer's
preference" license for spectrum space to explore PCS systems, and
Time Warner has successfully completed testing in Orlando, Fla., of
PCS technology and its interconnection with the cable
infrastructure. The Sprint-TCI-Comcast-Cox consortium successfully
bid for licenses covering 29 of the top 50 markets, covering 180
million POPs (points of presence), making it the largest winner in
the recent PCS spectrum auction.
Barriers to Deployment of Telephony
Services
Current modes of telecommunications regulation hamper cable
efforts to enter the telephony business. In particular, a number of
states still prohibit or hinder any competition to the entrenched
local telephone company monopoly. The cable industry is seeking to
safeguard competition by careful removal of regulatory
restrictions. The cable industry is supporting telecommunications
reform proposals currently before Congress. These proposals will
clarify the rules governing the development of the NII. Ultimately,
competition will best stimulate development of new technology and
services; furthermore, domestic competition will best build U.S.
competitive strengths.
Current legislative proposals can provide a rationally managed
transition to foster facilities-based competition for telephone
service. Permission to enter the business must include provisions
for reasonable access to unbundled elements of the public switched
telephone network, as it is in the public interest for
interconnection to be as fair and as seamless as possible.
The ability to make decisions in a competitive environment in
turn will stimulate appropriate investments in R&D and
technology deployment. Presumably, appropriate allowances can be
made for joint ventures and mergers, especially for small companies
serving lower density areas, to permit the capital formation
necessary for building a truly national information
infrastructure.
Apart from regulatory barriers, cable companies have recognized
that providing lifeline and other telecommunications services
requires a high standard of customer service. The cable industry in
1994 initiated a comprehensive customer service program including
"on-time" guarantees and other elements that it recognizes are
crucial elements in playing its part in the NII. Further, the
industry is implementing a new generation of network management and
business support systems that are an integral part of a multiple
service endeavor providing transactional and other two-way
services. In fact, cable is deploying state-of-the-art systems for
telecommunications that give it an advantage over existing
telephone companies, which are hampered by dependence on "legacy"
network management and business support systems.
Trends in Deployment of Personal
Computer-Based Services
Cable companies have historically carried a number of data
services. These have ranged from news and weather feeds, presented
in alphanumeric form on single channels or as scrolling captions,
to the X*Press information service, a one-way transmission of data
over classic cable systems. X*Press has transformed itself in
recent years, forming a multimedia educational service called
Ingenius in order to respond to the ongoing changes
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in the cable infrastructure, which now supports expanded
capabilities. X*Press/Ingenius is now joined by a host of
information providers targeting cable as the delivery mechanism of
choice for advanced data services.
These changes parallel those taking place in the commercial and
residential data transmission markets. The PC explosion of the
1980s was rapidly followed by leaps in computer networking
technology. More and more people at work and at home were becoming
familiar with computer networking, ranging from commercial services
such as CompuServe or Prodigy to the wide-ranging global Internet.
Increased awareness has led to increasing demand for service, and
for enhanced levels of service. Cable is in a unique position to
meet these demands.
The same highly evolved platform that enables cable to provide
telephony also supports high-speed data services. Here, cable's
high bandwidth pipeline offers a strong advantage in delivering
useful data services accessible by residential and commercial
customers over their personal computers and other data
terminals.
Information Services
Cable technology can provide customers with access to a variety
of information services, including catalog shopping, financial
data, and household bill-paying. Because cable systems have a
higher capacity for data, audio, and video information, cable
subscribers can send and receive information services through their
computers at a much faster rate than traditional telephone lines
offer. One such service, Ingenius Executive, is offered by cable
systems across the country and permits subscribers to connect their
personal computers to their cable, using a software interface to
receive information services via their computers without tying up
their telephone lines. Ingenius Executive subscribers may access
news, sports, and weather information as well as stock market and
consumer information. Ingenius also operates a service called
X*Change, which provides subscribers with a news feed from
journalists in more than 20 locations throughout the world, as well
as other educational data. The on-line service Prodigy is offering
similar services in several markets across the country via Media
General, Cox Cable, Viacom, and Comcast. Some of the informational
features available through Prodigy over cable include reference
databases that offer Consumer Reports, restaurant reviews,
and political profiles; children's features such as Sesame
Street, National Geographic, and the Academic American
Encyclopedia; stock quotes and charts of key economic
indicators; travel services; bulletin boards; shopping; and local
community information. Several continually updated videotext
services are available via cable as well, such as UPI DataCable,
which features international and national news, financial reports,
and weather, or CNBC, a commercial-free version of the cable
channel's programming combined with financial presentations to
corporate clients.
Companies may take different or evolving approaches to on-line
service access. For some applications, customers may be accessing
information stored on CD-ROM databases at or near the cable headend
or regional hub. Some forms of information, such as encyclopedias,
are particularly suited for such an approach. This may serve as a
transitional approach until wide area cable interconnections are in
place to allow information access from any remote sites. Some forms
of frequently updated material may require such networked
access.
Internet Access
In addition to these information services, upgraded cable
networks are now able to provide high capacity access to the
Internet to customers with home computers. With a cable connection
to the Internet, businesses and consumers can pay a flat monthly
fee for access and can receive electronic mail, access to USENET
discussion groups, ability to connect to computers around the world
via telnet, and access to information archives through file
transfer protocol (ftp) and gopher. This option was recently
offered to Continental Cablevision customers in Cambridge, Mass.,
in a joint project with Performance Systems International, Inc.
Subscribers receive Internet access for a monthly fee through a
cable converter box that does not interfere with cable television
service and works at speeds hundreds of times faster than telephone
modem calls. The half-megabit per second cable link allows
customers to download large data files in a fraction of the time it
takes over the telephone, and it even
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provides enough bandwidth to watch videos over a personal
computer. Cable's Internet gateway not only allows customers faster
access to the Internet but also a greater variety of creative
applications of Internet multimedia features.
LAN Interconnection
Some larger businesses presently use cable-provided facilities
to link their local area networks to transmit high volumes of data.
The evolving cable network architecture will soon enable smaller
businesses to benefit from advanced telecommunications services.
TCI and Digital Equipment Corporation are working jointly to
develop new business telecommunications applications using TCI's
HFC facilities and DEC's computer networking (Ethernet) technology.
Cable's high bandwidth infrastructure combined with DEC's computer
networking technology will allow remotely located LANs to share
computer resources and data. Cable networking technology also will
enhance opportunities for product design and manufacturing as well
as science and engineering research. For example, Times Mirror
Cable, DEC, and Arizona State University have tested a broadband
metropolitan network called Economic Commerce Net (EC Net) that
supports manufacturing applications for aerospace businesses in the
Phoenix area. EC Net allows these businesses to collectively
improve manufacturing by offering desktop videoconferencing on
manufacturing processes, a computer aided design (CAD) tool that
permits remote businesses to view and manipulate designs
simultaneously, and a multimedia storage and retrieval facility for
data, video, purchasing specifications, and other information.
Cablecommuting
The cable industry's HFC infrastructure has the potential to
increase the already popular notion of working from home via the
information superhighway. Approximately 8 million Americans already
work through some form of telecommuting, and cable's high-volume,
high-speed broadband technology will allow millions more to
"commute" to work through cable. This technology will lessen the
burden of commuting for both businesses and their employees who may
be geographically isolated, physically disabled, or single parents.
TCI is currently testing a cablecommuting project that will allow
its Denver area customer service representatives to receive
customer calls at home. TCI is also testing a service, developed by
Hybrid Networks, Inc., in the San Francisco area that transmits
high-speed data over a standard cable channel and low-speed data
through telephone lines to create an interactive corporate/home
network. In addition, technologies such as video teleconferencing
and high-speed fax transmission that will be delivered via cable in
the future will enhance cable commuters' options.
Research Support
The cable industry's broadband architecture will allow
researchers in a variety of fields to share advanced computing
applications or scientific instruments from remote locations,
resulting in comprehensive research at a fraction of current costs.
One such network is being offered by Cablevision Systems in the New
York City metropolitan area. FISHNet (Fiber optic, Island-wide,
Super High-speed Network) is a high-capacity fiber optic network
that links the State University of New York-Stony Brook with the
Brookhaven National Laboratory and Grumman Data Systems. The system
has been used to revolutionize the efficient use of medical imaging
and diagnostic techniques as well as to develop modeling procedures
for the transport of contaminants in groundwater.
Outlook for PC-Based Applications
Personal computers continue to penetrate the home market.
Moreover, most home PCs today include a CD-ROM attachment. This
indicates strong demand for content-based services running over
PCs. CD-ROMs, however, may be a short-term solution. Network-based
content servers interconnected via cable company high-speed
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links are a more efficient way for customers to access updated
databases, news, and other forms of information.
Further, data networking has been an explosive growth area
within information technology in recent years. Business
applications require more and more bandwidth, especially in
interconnecting disparate LANs, and cable is the provider with the
greatest capacity to meet the mushrooming demand for bandwidth.
Barriers to Deployment of PC-Based
Services
There appear to be very few barriers to cable deployment of
high-speed data transmission. The cable platform is steadily
evolving to a hybrid digital and analog transmission system. Data
modems already exist, and improved models are under development by
such companies as Intel, LANCity, Zenith, General Instrument, and
Hybrid Networks, Inc. Modem prices are dropping
precipitously—LANCity announced in May 1995 that its 10 Mbps
cable modem was priced at $595, compared to several thousand
dollars just 8 months earlier. Return path issues that were
mentioned previously in connection with cable plant upgrades also
will need to receive attention in the context of PC-based services.
Customers may not desire totally symmetrical data communication,
particularly residential user, but the return path still must be
reliable. Bandwidth demand for return signals may be very dynamic,
requiring cable systems to be able to allocate frequency in an
agile manner. Upstream, broadband transmission over cable is
expected to be fully supported within 5 years.
Trends in the Deployment of
Interactive Television
The convergence of telecommunications and computer technology is
transforming American society. In the cable industry, the
convergence of cable's high-speed transmission capability and
computer hardware and software intelligence is not only enabling
cable to deliver telephony and high-speed data services, but is
creating new opportunities in entirely new forms of entertainment,
education, health care, and many other areas. Cable companies, such
as Time Warner in Orlando, have now deployed operational systems
actually delivering such services.
Video on Demand
Digital compression technology, which enables cable companies to
offer a greater number of channels as well as interactive
capability, ensures that video on demand will be part of the
information superhighway's features. This service allows customers
to select from a range of movies, sporting events, or concerts for
viewing at their convenience. Many cable operators, such as Paragon
Cable in San Antonio, are already offering the less costly option
of near-video on demand, which allows customers to view programs
with start times every 15 or 30 minutes. True video-on-demand
systems are currently being tested in Omaha, Neb., by Cox Cable; in
Yonkers, N.Y., by Cablevision Systems; in Orlando, Fla., by Time
Warner; and in Littleton, Colo., by TCI. A specific service, Your
Choice Television (YCTV), packages and delivers television programs
on demand. For about $1 per program, viewers can order a weekly
program up to a week after it airs and a daily program the day
after it airs. YCTV has been tested in eight markets, including
Continental Cablevision in Dayton, Ohio, and TCI in Mount Prospect,
Ill.
Interactive Entertainment
With the pioneering technology that allows interactive
capability, many new information and entertainment options are
being created within the cable industry. For example, the ACTV
network, which was tested via Continental Cablevision in
Springfield, Mass., and is now being offered to subscribers in
Montreal, allows viewers to alter the content of the TV screen
during the course of a program. Viewers can call up
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statistical information on players during sporting events, watch
a synopsis of the daily news headlines, and choose the stories on
which to receive detailed reportage, or even change the pace of an
exercise program. Interactive commercials will soon be available on
ACTV so that customers may receive more information or discount
coupons for particular products or services.
Education and Distance Learning
Cable technology has enabled the development of interactive
educational applications and distance learning that improve not
only the way students learn but also the way teachers teach. Jones
International's Mind Extension University has been offering college
courses via cable television for years, and cable companies are
expanding educational opportunities by building networks devoted to
education. Students can now learn from national experts or students
in different cities, access online libraries from around the world,
or take "virtual field trips" to museums while remaining in the
classroom. One such interactive learning pilot project, called the
Global Laboratory Project and currently run by Continental
Cablevision and the National Science Foundation, connects students
in Cambridge, Mass., with those from 27 other states and 17 foreign
countries to explore environmental problems. The students monitor
climate change, pollution, and ultraviolet radiation and share
their data among themselves and with scientists to gain a global
perspective on the environment.
As part of its effort to expand learning opportunities through
the use of cable technology, the cable industry has initiated a
nonprofit program to provide schools with basic cable service,
commercial-free educational programming, and teacher support
materials. The project, Cable in the Classroom, serves nearly
64,000 schools and supplies more than 525 hours of commercial-free
programming for educators each month. Highlighting the industry's
role in distance learning, Continental Cablevision now operates an
interactive learning network called the Cable Classroom in Enfield,
Conn. It permits teaching in one school district and simultaneously
offering to several others advanced math and language classes that
would otherwise not be offered because of low enrollments. Because
the system uses two channels, the teacher can also view the
students and home cable customers can change channels to watch
either the students or the teacher. The Cable Classroom also offers
teachers professional development by conducting interactive
meetings with teachers in four Connecticut school districts. In
another example, the Ohio Cable Foundation for Education and
Technology is promoting distance learning through a range of
applications throughout the state. For example, TCI in Zanesville
provides data retrieval services and other multimedia distance
learning applications.
Interactive Program Guides and
Navigators
Because of the expected explosion in future cable programming
and service choices, customers will seek greater choice, control,
and convenience with regard to their viewing environments. These
needs will spur demand for a personalized form of channel
navigation. Several interactive subscriber guides are being
developed and tested. One of these on-screen guides, StarSight, is
available in Castro Valley, Calif., through Viacom Cable. Time
Warner has developed its own navigation system for the Orlando Full
Service Network.
Interactive Shopping and
Advertising
Companies like Time Warner are testing interactive shopping
services, such as ShopperVision, that enable customers to see and
evaluate products over interactive video catalogs before
purchasing. Immediate ordering and the requisite billing and
payment mechanisms are integrated as well.
Interactivity will permit cable subscribers to request consumer
information on businesses, products, and services at the touch of a
button. Real estate advertisements have been among the first to
make an impact in the burgeoning marketplace. A program called Home
Economics, available throughout New England via Continental
Cablevision, permits viewers to request specific information about
homes. Moreover, an interactive channel devoted to classified real
estate advertising is in the works; the Real Estate Network will
provide customers with
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the ability to view real estate in full-motion video and to
access details on contractors, mortgage rates, and lending
institutions.
Games
The Sega Channel, a joint venture between Time Warner and TCI
that offers a library of Sega video game titles for download
through cable systems, is being tested in several markets.
Subscribers use a "tuner/decoder" cartridge that tunes in the
channel, provides a menu, and downloads a game choice.
Scientific-Atlanta and General Instrument Corporation are presently
manufacturing adapters that will permit their set-top boxes to
serve as vehicles for the Sega games. Multiplayer games are also a
possibility across full service networks such as Time Warner's
Orlando system.
Health Care
The cable industry's bridge to the information superhighway has
important consequences for new developments in health care. Through
the use of telecommunications technology for medical applications,
doctors can consult with researchers or specialists in other
locations, conduct video seminars throughout the country, consult
visual information from remote libraries or medical centers, and
share medical records or images such as X-rays. Paragon Cable in
Portland, Ore., uses its institutional network to transport a
telemedicine or "cablemedicine" network that connects 12 medical
facilities and schools throughout the city to provide information
from video conferences held across the United States. Cable also
has the potential to deliver a standardized means of electronic
health insurance claim filing, and personalized health information
systems are being tested that use terminals in the home to connect
consumers to a health care databank that advises customers about
self care based on their personal medical records.
Outlook for Interactive
Television
The preceding discussion outlined a variety of potential
interactive services that may be provided over cable. The range of
experiments, both technical and market trials, appears to bode well
for the flexibility of cable to provide the services. There have
been no technology hurdles discovered in making the cable systems
perform at a level needed to support interactivity. Consumer demand
for such services over the next 5 to 7 years is the wild card for
all prospective services. But early cable trials point to reasons
for optimism. TCI's trial in a Denver suburb compared near video on
demand (offering a small selection of hit movies starting every 15
minutes) to video on demand (offering a large library of movies,
starting immediately on demand). Indications were that customers
are receptive to increases in choice and convenience. The initial
reports on the new DBS services also indicate increased buy rates
from customers given a larger menu of programming from which to
choose. Thus, along the dimension of upgraded entertainment
services with elements of interactivity in terms of navigation and
control, it appears that consumer demand will support growth of
such services over the next 5 to 7 years.
More advanced levels of interactivity also appear to make sense.
The same desire for choice and convenience appears to be driving
early success for the Sega Channel, which delivers video games to
the home. The availability of more video game choices in the home
is attractive, and one might assume further that adding elements of
interactivity, such as multiplayer games, would drive increased
customer acceptance.
In the area of shopping and related services, many providers are
optimistic about market prospects. Electronic commerce over the
Internet is spawning a flurry of activity by companies trying to
perfect a secure means of conducting business over electronic
networks. Cable's broadband capability appears to provide
significant enhancement to such commerce as a natural showcase for
products through video catalogs incorporating customer
interaction.
As noted above, the cable platform supporting such interaction
is likely to be widely available within the next 5 years.
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Barriers to Deployment of Interactive
Television
Barriers to interactive services may manifest as financial
concerns or as marketing uncertainties. As with data services,
interactive services will take advantage of the in-place cable
platform capable of flexible, high-capacity support. Deployment of
interactive services will require only incremental investments,
largely in the customer premise equipment necessary to plug into
the cable platform. Such an incremental approach will minimize
financial risk given remaining uncertainty about the potential size
of the market. As noted above, technology and market trials give
reason for optimism. Nevertheless, cable's evolutionary approach
offers welcome security in the event that forecasts are too
optimistic.
Conclusion
Cable television companies operate a highly evolved platform
capable of delivering a variety of telecommunications and
information services. Additional technology components that will
enable particular services contemplated for the national
information infrastructure to run over that platform appear to be
coming on stream at reasonable time frames and cost levels. The
evolutionary nature of cable allows cable companies to invest
incrementally and cost effectively only in those technologies that
serve clearly defined needs or market demands. There are no
significant technological or financial barriers to continued
deployment of cable architecture. However, regulatory uncertainty
still remains problematic.
Addendum
1.
For your company or industry, over the next 10
years, please project your best estimate of scheduled construction
of new broadband facilities to the total residential and small
business customer base, in 2-year increments.
The cable industry already provides broadband facilities to 64
percent of television households, and makes such facilities
available to 96 percent of television households. Cable facilities
are available to approximately 90 percent of business locations as
well, although businesses have not historically subscribed to
cable. Beyond this level of service, cable companies are currently
upgrading existing systems by migrating fiber optics deeper into
networks, creating individual service areas of roughly 500 homes.
This expands available bandwidth to around 750 MHz. The deployment
of such upgrades may develop as follows:
1995
25 percent
1997
65 percent
1999
80 percent
2005
90 percent
2.
Over the same period, please project dates when
each family of service will first become available, and its
subsequent penetration of the total base, again in 2-year
increments.
Telephony
Capabilities for providing wireline telephony over cable will
track the progression of cable system upgrades as described in the
response to question 1. Telecommunications switch deployment is
under way as systems migrate to regional hub designs. Several cable
companies have formed partnerships with Sprint and other companies
to provide a full range of telecommunications services, including
wireless personal communications services. Actual penetration of
such cable-provided services in a competitive market is difficult
to project. In the United Kingdom, cable operators offering local
telephony service have reported selling telephony services to over
20 percent of homes where the service is available, indicating a
significant market for competing providers of
telecommunications.
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PC-Based Applications
Digital, PC-based applications may be rolled out almost
immediately, based on cable's broadband pipe into the home and the
development of affordable cable modems, which are probably less
than a year away. Alternate return paths such as telephone lines
could be used in a hybrid approach. Availability of a broadband
return path for such services will follow the progression of cable
system upgrades as described in the response to question 1.
Penetration of such services is difficult to project, particularly
in the face of phenomenal growth rates in Internet
connectivity.
Interactive Television
•
1996—First generation interactivity
(navigation or program selection), satellite-based digital
compression for near video on demand.
•
1998—Early deployment of second generation
interactivity, such as multiplayer video games.
•
2000—Deployment of full service networks,
enabling server-based true video on demand, full motion navigation
tools, video telephony types of services.
Again, it is important to note that interactive services may be
deployed on an incremental basis matched to customer demand, once
an upgraded infrastructure is in place. Thus, availability of these
services will closely track the progression of cable system
upgrades as described in the response to question 1. Evidence from
early interactive field trials indicates a definite customer
preference for increased choice, convenience, and control by the
customer.
3.
Please outline the architecture(s) that will be
used to build this broadband plant.
This question is answered in the foregoing white paper.
4.
Please outline the peak switched digital bandwidth
(in kbps or Mbps) available to an individual residential or small
business user when you launch broadband service, and how that
bandwidth can evolve to respond to increased peak traffic and to
new, high-capacity services (which may not now exist).
Cable's existing bandwidth to the home, combined with upgrades
described previously, will reach 750 MHz. Using 64 QAM digital
modulation, this implies a total digital bandwidth of close to 3
gigabits per second. Allowing for preservation of existing analog
services, available bandwidth would be closer to 1.3 gigabits per
second. Current industry plans call for reservation of the 5- to
40-MHz portion of the spectrum for the return path use by customers
for upstream transmission. Using QPSK or 64 QAM digital modulation,
35 MHz could handle anywhere from 50 Mbps to 135 Mbps. Thus, the
amount of raw bandwidth available over cable is substantial.
Cable modems under development call for effective bandwidths up
to 27 megabits per second per 6 MHz channel. The actual amount
available depends upon usage within the roughly 500 home nodes
described previously. Assuming subscriber penetration of 60 percent
gives 300 potential users. For PC-based services, one may further
estimate that 40 percent of homes have PCs (numbers are roughly
similar for cable or noncable homes). Further, less than 20 percent
of PC homes have PCs with modems, so that the range of potential
data service users may fall anywhere between 8 percent and 40
percent. Assuming growth in PC penetration, we may assume that 33
percent of subscribers are potential data transmission customers,
or 100 homes. And probable peak usage will be less than 33 percent,
so that one might expect 33 simultaneous users. Thus, close to 1
mbps would be available given the above assumptions. Of course,
data are packetized so that individual customers would use
considerably less than a full Megabit per second at any given
time.
This is a lower limit. One might initially increase capacity by
allocating additional 6 MHz channels on demand. Cable companies may
migrate fiber further into distribution networks, creating even
smaller nodes and expanding bandwidth from 750 MHz up to the
feasible maximum of 1.2 GHz. Cable companies are researching
dynamic bandwidth allocation techniques allowing the flexibility to
meet demand. Digital modulation techniques will also continue to
allow greater amounts of data to be transmitted over existing
bandwidth.
5.
Please project the capital investment you or your
industry plan to make on a per-home-passed basis to install
broadband infrastructure, and on a per-subscriber basis to install
specific services.
The cable industry plans to spend $28 billion over the next 10
years on plant and equipment upgrades (according to Paul Kagan
Associates). This works out to approximately $460 per subscriber.
Upgrades to evolve cable systems to
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multipurpose platforms cost in the range of $100 to $150. Costs
are rapidly dropping for cable modems necessary for PC-based data
services, and should reach the $200 to $300 range in the next year
or two. Capital investment for such services is incremental, and
will be matched to new revenue streams, which may in turn expand
capital available for further technology deployment. Costs for
telephony service over cable are difficult to quantify because they
are highly dependent on penetration assumptions. Interactive
television applications may require server and other technology
costing as much as $500 per subscriber when widely deployed. Again,
investment will be incremental and matched to new revenue
streams.
6.
Please respond to the concerns raised in Vice
President Gore's letter regarding the ability of users of your
network to originate content for delivery to any or all other
users, versus the control of all content by the network
operator.
The cable platform is steadily evolving to a hybrid digital and
analog transmission system. Data modems already exist, and improved
models are under development by such companies as Intel, LANcity,
Zenith, General Instrument, and Hybrid Networks, Inc. Return path
issues that have been raised in connection with cable plant
upgrades do not appear to present obstacles to customer generation
of content. Bandwidth demand for return signals may be very
dynamic, requiring cable systems to be able to allocate frequency
in an agile manner. Upstream, broadband transmission over cable is
expected to be fully supported within 5 years.
7.
Please specifically enumerate the actions that you
or your industry believe that the federal government should take to
encourage and accelerate the widespread availability of a
competitive digital information infrastructure in this country.
Current modes of telecommunications regulation hamper cable
efforts to enter the telephony business. In particular, a number of
states still prohibit or hinder any competition to the entrenched
local telephone company monopoly. The cable industry is seeking to
safeguard competition by careful removal of regulatory
restrictions. The cable industry is supporting telecommunications
reform proposals currently before Congress. These proposals will
clarify the rules governing the development of the NII. Regulatory
relief from some cable pricing regulation will permit rational
capital investment. Ultimately, competition will best stimulate
development of new technology and services, and further, domestic
competition will best build U.S. competitive strengths.
Current legislative proposals can provide a rationally managed
transition to foster facilities-based competition for telephone
service. Permission to enter the business must include provisions
for reasonable access to unbundled elements of the public switched
telephone network, as it is in the public interest for
interconnection to be as fair and as seamless as possible.
The ability to make decisions in a competitive environment in
turn will stimulate appropriate investments in R&D and
technology deployment. Presumably, appropriate allowances can be
made for joint ventures and mergers, especially for small companies
serving lower density areas, to permit the capital formation
necessary for building a truly national information
infrastructure.
Representative terms from entire chapter:
cable industry
