Band of Insiders
Cablelabs Revolutionized Cable by Creating Industrywide Standards
by George Winslow -- Multichannel News, 6/22/2008 8:00:00 PM
|
Sidebars:
Two Decades of Innovation |
In the late 1980s, cable seemed to have entered what some have called its golden age. The vicious urban franchise wars were over and the Federal government had deregulated the industry, allowing operators to raise rates so they could finance new investments. Even better, cable was once again the darling of Wall Street, which was financing a wave of mergers and acquisitions that was reshaping the industry.
Amid the prosperity, however, a handful of visionary executives began thinking about some fundamental problems that might threaten cable’s future. Worried about looming competition from telcos and the limitations of industry’s current technology, they convinced most of the major MSOs to band together and create a new research and development organization, Cable Television Laboratories, which was incorporated on May 11, 1988.
As industrywide R&D efforts go, the initiative was tiny. In 1989, CableLabs’ budget was only $2.5 million. By the late 1990s, it was operating on only $14 million per year, far less than the $1 billion spent by the regional Bell operating companies on Bellcore and electrical utilities on Electric Power Research Institute.
Yet, CableLabs’s technical leadership would help transform the industry by playing a key role in the development of a slew of new services and technologies — digital video, high-speed data, telephony, video on demand, digital ad insertion, HDTV, DOCSIS modems and the PacketCable standards for telephony.
Thanks to these technologies, the cable industry has boosted its revenue sixfold from about $13.4 billion in 1988 to an estimated $81.9 billion this year, according to SNL Kagan data.
“The whole surge of the modern cable industry relies on IP telephony and DOCSIS modems,” said Liberty Media chairman John Malone, who was the first chairman of CableLabs. “By creating standards for those technologies, CableLabs has been an enormous boon to the industry.”
The story of how the industry created CableLabs begins with Richard Leghorn, a Vanguard Award winner at this year’s Cable Show.
Leghorn’s own career mirrors the kind of technical innovation that would later characterize CableLabs. In the 1940s and 1950s, he played a key role in the development of the U2 spy planes and Corona, the first spy satellite. Then, as he built nine cable systems in five states in the 1960s and 1970s, he experimented with a number of new technologies.
But, Leghorn’s background in the high-tech defense and information technology made him increasingly frustrated with the state of cable technology. In 1984, he wrote an exhaustive memo on the need for an industrywide R&D consortium for cable and pitched the idea to the board of the National Cable Television Association.
The idea didn’t take off, but Leghorn persisted; and by 1987, cable was more receptive, recalled Jim Mooney, who was then the head of the NCTA. That October, Mooney agreed to back the idea and help Leghorn set up a committee of operators to explore the idea.
“When Dick Leghorn revived the idea of creating CableLabs, the cable business was very much at the crossroads,” Mooney said. “It had to decide if it was going to become a truly national medium and make the most of the cable platform. Leghorn’s idea for CableLabs pointed the way to achieve those technical advances, much as Bell Labs accomplished the same thing for the phone business.”
Besides Mooney’s support, the project got another big boost, when John Malone, then head of the nation’s largest cable operator, Tele-Communications Inc., agreed to support the initiative and chair an R&D committee.
Like Leghorn, Malone was also growing concerned about the state of the industry’s technology. “The absence of standards and the fact that we were trapped into incompatible proprietary solutions was starting to cost the cable industry big time,” said Malone.
Other operators also embraced the idea. “Cable was at a dead end in terms of its plant technology,” said Jim Chiddix, another early supporter who was then heading up technology efforts at Time Warner’s American Television Communications (ATC) cable systems.
By September 1988, cable operators servicing 75% of the country had joined, agreeing to pay 2 cents per subscriber per month.
In August, after a lengthy search process, CableLabs also hired the Public Broadcasting System’s top technology executive, Richard Green, as president and CEO.
Green arrived at CableLabs with what he calls a “a dappled background,” that would prove crucial to the organization’s success.
After getting a Ph.D. in astrophysics from the University of Washington and working as an assistant professor, Green went to work for Boeing and Hughes, where he did basic research on laser technologies.
From an early age, Green had also been fascinated with television, working nights and weekends at television stations while he was in school. He eventually took a job with ABC, where he managed their Videotape Post-Production department, and at CBS, where he wound up running CBS’s laboratory and shot what may be the first high-definition programs in 1981. He then joined PBS, where he was the senior vice president of broadcast operations and engineering.
During his years in broadcasting, Green was intimately involved in emerging international standards for HDTV and was already an expert in such technologies as fiber optics that would eventually transform cable. But Green’s unassuming personality and the diplomatic skills he’d learned while working at PBS, which was a membership organization like CableLabs, were also crucial.
“[Green] knew the technology but he also knows how to work with people,” Leghorn said. “In the cable industry, we have all these entrepreneurial spirits and getting them to work together is a little like herding wild cats. Dick is a very self-effacing guy but he is very astute in getting the industry to move in the same direction.”
“Green has been absolutely indispensable to the success of CableLabs,” added Landmark Communications president and chief operating officer Decker Anstrom, who worked on the formation of CableLabs while at the NCTA in the 1980s and 1990s. “If they’d picked someone who didn’t learn the industry politics quickly enough or someone who worked on the wrong technological issues or someone who had the wrong personality, things could have gotten off the tracks very quickly.”
Even so, CableLabs faced daunting challenges in its early years. “There are countless examples of laboratories in other organizations failing because they pursued technical strategies that did not have business rewards,” said Green.
To avoid that pitfall, Leghorn had long argued that “the focus needed to be on innovation, which is a business function, not invention.” He believed CableLabs could encourage innovation by developing industrywide standards and by reducing the roadblocks, such as expensive proprietary solutions, that might slow or block the deployment of new technologies.
To achieve those ends, CableLabs was set up as a membership organization that is governed by an executive committee of CEOs at the MSOs. These top executives would set the organization’s strategies and decide which technical issues it should focus on.
CableLabs also has a Technical Advisory Committee made up of chief technical officers who work on implementing the technical roadmap and it has a variety of working groups, composed of engineers from the MSOs and vendors. Working together, these groups come up with technical solutions that would allow a product, such as a cable modem to be deployed across the whole industry.
“The hallmark of CableLabs has not been, 'Gee, let’s invent something and then maybe someone will be interested in it,’ ” Malone said. “The CEOs in the business clearly define what is tactically needed, whether it is a digital set-top box or the development of DOCSIS 3.0, because you need higher speeds to compete.”
With their fingertips on consumer demand and the competitive landscape, cable CEOs and CableLabs’s top management have been remarkably prescient in setting the long-term technology roadmap for the consortium’s efforts.
One of the CableLabs’s first projects in 1989 was to examine fiber optics as a way of overcoming cable’s transport problems. In the early 1990s, it was also actively working on HDTV, telephony, high-speed data and digital compression.
Along the way, CableLabs also dealt with a host of more mundane issues, such as improved video quality and ad insertion.
“There have always been a lot of initiatives that don’t get all the publicity but are the bricks and mortar of this digital world we are building and have very practical benefits,” said Tony Werner, Comcast executive vice president and CTO.
In many cases, simply providing a forum for the exchange of ideas would speed new technology, such as hybrid fiber coax, to market.
During a 1989 CableLabs meeting on possible uses of fiber optics, Chiddix and a group of engineers at ATC, presented some of the pioneering work they’d done in the field. They’d found a way to dramatically increase the capacity of cable networks by using fiber but the cost of the linear lasers made it uneconomical.
“The first lasers cost $20,000 and even at that price the vendor was losing money,” Chiddix recalled. “We needed scale to get the price down. CableLabs played a key role in proliferating the ideas we had pioneered at ATC across the industry. They helped get people involved by making it less of an ATC technology and more of an industry technology.”
With early fiber deployments in 1991, prices began to rapidly drop for lasers and by the mid-1990s, most operators were building hybrid fiber coax networks, a fundamental change in the architecture of cable systems that allowed the industry to dramatically expand capacity for many more channels and new services, such as high-speed data and telephony.
In a more formal way, CableLabs also played a key role in creating national and international standards for newer technologies.
“When cable labs was founded, everyone was going their own way and doing things in a very proprietary fashion,” said Cox Communications senior vice president and CTO Chris Bowick, who is the current chairman of CableLabs’ Technical Advisory Committee. “Each system was an island. You couldn’t easily take equipment from one system and use it on another. If things had gone on that way, there is no doubt the industry would be in a hell of a mess today.”
Leghorn, Malone and the others believed CableLabs would help the industry break out of this technological cul de sac by developing industrywide standards. “The first cable modems cost something like $200 and Broadcom had a hammer lock on the technology,” Malone said. “[Green] was able to define the standards in such a way that others could compete and really drive down the price dramatically.”
But getting the industry firmly behind the idea of using national and international standards would take time, even with DOCSIS, which is often cited as CableLabs’s greatest achievement.
Early on, CableLabs’s executive committee backed the idea of creating an industrywide standard for cable modems but even after the creation of the DOCSIS specifications some vendors continued to push their proprietary standards.
“CableLabs has worked on standards for HDTV and MPEG, but when we issued DOCSIS 1.0 it received a lukewarm reception partly because it was the first time CableLabs had done a major specification in a new technology,” Green said. “There were manufacturers who continued with their proprietary product, making the assumption that DOCSIS wouldn’t get off the ground. So you wound up with many more proprietary modems being deployed than DOCSIS modems.”
Over time, however, the creation of an international standard for DOCSIS and other technologies drove down prices of cable modems and other gear. “You can purchase a digital set-top box today for $30 that is equivalent with what we started with at $300,” Malone said.
Seeing those savings and the success of the high-speed data product, operators have since enthusiastically backed the creation of international standards such as PacketCable telephony standards and other technologies.
“As we migrated from analog to digital, it has been critical that we were able to leverage an industry-wide footprint for new products rather than being tied to a proprietary solution from one or two vendors,” said Mike Hayashi, executive vice president of advanced engineering within the advanced technology group at Time Warner Cable. “If we had two different [quadrature amplitude modulation] standards out there, which could have happened without CableLabs, we would never have had DOCSIS.”
Green: Creating Standards That Worked
11/07/2009Having Fun Being First
10/12/2008CableLabs Releases Tru2way Reference Code
06/15/2009Green to Leave CableLabs
09/28/2008
