Facing the Future

When CableLabs was formed in 1988, cable operators held virtual monopolies in franchise areas. No more. As the organization celebrates its 20th anniversary, its members face some of the toughest competition in its history.

“The competition is coming from everywhere,” satellite, telcos, the Internet and mobile, said Mike Hayashi, executive vice president of advanced engineering within the advanced technology group at Time Warner Cable, who had been active with CableLabs since the early 1990s. “Our competitors include anyone who goes after the same eyeballs of our customers. That means we need the flexibility with our networks and technology to move faster and respond quicker to the competition than we ever had before.”

That is making innovative new services and the role played by CableLabs in developing those applications more important than ever, Hayasi and other cable executive say. But the bruising competition and the lightning speed of technological change are also posing some important challenges for the CableLabs as the organization ponders its future.

“Competition is healthy for us and the cable industry,” said CableLabs president and CEO Richard Green. “Competition has pushed us as an industry out in front in telecom services and created a very competitive platform that isn’t encumbered by some of the legacies most of our telecom competitors have.”

Examples of that competitive advantage can be found in several of the newer CableLabs specifications.

DOSCIS 3.0, for example, will allow operators to provided consumers with blazing Internet speeds of 160 Mbps, giving cable a compelling response to telcos deploying fiber to the home, Green said.

Tru2way, formerly known as OpenCable, will allow the industry to introduce interactive services and advanced advertising services, which could produce significant new revenue streams in the future. And the upcoming PacketCable 2.0 technologies will allow operators to deploy multimedia or converged services, allowing consumers to access video on a variety of devices and giving cable an alternative to the services Internet protocol-TV providers are touting.

“In many ways, cable’s telecom platform is increasingly software-based,” Green said. “As new services come along, we have a competitive advantage because we don’t have to swap out a lot of equipment.”

Still, CableLabs and the MSOs aren’t resting on their laurels, Green and others stress.

“The technology cycles are getting shorter,” said Chris Bowick, senior vice president of engineering and chief technical officer at Cox Communications and the current chairman of the Technical Advisory Committee at CableLabs. “We have to ensure that we are going to be able to deliver the next generation and next revision in a very rapid fashion. We have an excellent foundation for this industry to compete long term but we can’t just wash out hands and say, 'OK, we’re done.’ What’s beyond DOCSIS 3.0? We can’t just stop at 160 Mbs per second as the bandwidth limit. What’s DOCSIS 4.0, 5.0 going to look like?”

Amid the proliferating new consumer technologies, the MSOs and CableLabs will need to maintain a focus on profitable technologies. “The biggest challenge for us is to identify priorities,” said Marwan Fawaz, Charter Communications executive vice president and CTO. “There is no shortage of potential initiatives. Along with the CableLabs executive team, we need to make certain we focus on the right priorities to drive the business.”

And, it will have to achieve these ambitious goals with the cost-conscious budgets that have always governed CableLabs. The organization’s budget currently stands at about $50 million, according to Green. It now employs about 165 people, up from 50 in 1994, when the budget was about $13 million. At any given time, there are also about 40 visiting engineers from vendors, MSOs and outside companies working at the facility.

While CableLabs has a long string of technical accomplishments, its $50 million budget is small compared to in-house R&D efforts by the telcos or high-tech companies like Microsoft, which spent over $6.5 billion on R&D in 2006, Sun Microsystems ($2.0 billion) Google (1.2 billion), Yahoo ($833 million) or Apple ($758 million), according to CIO Insight.

Despite this disparity in funding, CableLabs has built up a world-class laboratory and technical facilities.

CableLabs CTO Ralph Brown said the $16 million facility covers about 14,000 square feet of lab space, taking up nearly one-fifth of the CableLabs headquarters in Louisville, Colo.

“As part of the certification process, we keep one of every product we’ve certified,” Brown said. “We have six headends. That allows us to replicate just about any environment and gives us an infrastructure that I don’t think anyone in the world has.”

To speed up the certification process, CableLabs is now running eight certification waves a year with each overlapping wave running about eight weeks, Brown added.

To prepare CableLabs’s staff for an increasingly technological and competitive landscape, Christopher Lammers, executive vice president and chief operating officer said the organization has undertaken several important initiatives.

This year, for example, CableLabs is starting to send staff members to cable systems as operators deploy new services. Lammers, who had an operational background running cable systems before joining CableLabs 11 years ago, said “the experience will help [staff] better understand the business and operational drivers of our business. It will give them a much wider view of what the operators face beyond just the technology.”

“I think it is really a great idea,” said Hayashi. “It will really give them a better understanding of what we need in the field.”

Meanwhile, CableLabs continues to look for new talent. Late last year, Lammers said the organization hired two more people with backgrounds in computer, software and Internet. “We have to evolve our skill sets to support the changing needs of highly sophisticated communications network,” Lammers said.

Lammers and others also stress the important role that CableLabs continues to play in fostering technological collaboration between the MSOs, manufacturers of equipment, international standards organizations and increasingly software and computer companies.

“We are in the business of driving industry consensus, that is where our success lies,” Lammers said.

Thanks to this cooperation, Lammers said it took less than 4 years from the start of the DOCSIS project to the first deployments later this year. “With each implementation of DOCSIS, from 1.0, to 1.1, 2.0 and 3.0 we’ve reduced the time frame,” he said. “We’re on Internet time now.”

Executive vice president and chief strategy officer David Reed added that the organization remains focused on technologies that have a business payoff, thanks to the involvement of CEOs on the executive committee that sets the direction for CableLab’s work.

“If you look at who has been chairman over the years — starting with John Malone [then head of Tele-Communications Inc.], Glenn Britt [head of Time Warner Cable] and now Brian Roberts [head of Comcast] — it’s a who’s who of cable,” said Reed. “They are the kind of top strategists for the industry who have really kept CableLabs moving in the right direction.”

Typically, the CEOs will set out a problem that they would like solved. In the early 1990s, those executives wanted to find a new way to deploy telephony because they believed it would be difficult to make money on phone services using the traditional switched architecture used by phone companies, Reed said.

That led to the development of a new voice over IP standard, PacketCable 1.0 which the cable industry has since deployed so successfully.

With a problem to solve, Reed and his team will do an assessment of current technologies and come up with the industrywide requirements for the new technology. In the case of PacketCable, that meant coming up with a list of features for cable telephony.

Then CableLabs will collect potential solutions from vendors and draw on those technologies to come up with general industrywide specifications, which will be written by teams of vendors and cable engineers.

These specifications can then be tested on a wide array of equipment in the lab and eventually submitted to an international body for approval.

“The contribution that CableLabs has made to the industry is streamlined process for innovation,” Reed said. “Instead of waiting for a long time for a consensus to emerge, which often happens in standards bodies, we can knife through all the different alternatives and take the best of breed to solve the problem because we’ve put together a set of requirements for the technology.”

Another key component to this collaborative process that CableLabs uses to spur innovation is patent pools of intellectual property rights.

To speed the rollout of MPEG digital video encoding and compression, Green said CableLabs created a royalty pool called MPEG-LA, which was spun off as a separate entity.

Later, CableLabs set up royalty-free pools for DOCSIS and PacketCable, Lammers explains. In contrast, tru2way does have a royalty bearing pool because it is based around multimedia home platform (MHP), which was set up with a royalty pool.

“It is counterintuitive that vendors would benefit by putting their IPR [intellectual property rights] into a pool or that we would be able to convince them to give up those valuable rights,” Lammers said.

Over the years, however, the successful deployment of DOCSIS and PacketCable has demonstrated the advantages of pooling their technology, Lammers added.

By removing the barrier of high royalty payments and creating industrywide standards, the products can be brought to market much quicker, which benefits MSOs and vendors by shortening their technology development cycles.

At the same time, the patents pools primarily deal with the interoperability of the products. The vendors retain valuable intellectual property rights that allow them to design products that work better than their competitors.

The creation of worldwide standards also benefits manufacturers by allowing them to sell their product globally, thus creating economies of scale that also helps drive down prices for the MSOs.

“The model has worked very well for MSOs and the manufacturers,” Lammers said.

Expanding this collaboration into the software, Internet and consumer electronics industry will be increasingly important in the future as the architecture of cable networks becomes increasingly reliant on software.

“The interesting thing for me is that the cable system is becoming more and more of a software system,” said Ed Miller, senior vice president of broadband network services at CableLabs. “If you go back to the original days, it was all hardware — antennas, amplifiers and cable. It was all plumbing. But with digital, cable modems, voice and now [tru2way], the whole network structure is becoming more software based and more flexible.”

Don Dulchinos, senior vice president of advanced platforms and services at CableLabs, added, “Tru2way will speed innovation on their traditional video platform. A lot of things that cable companies have tried to do over the years have been hamstrung by the legacy equipment and the limited number of vendors they could use. It created a mindset that you can only change as fast as the set-top box vendors make changes. But with tru2way, you now have an open development platform. You can roll out new services when you choose to. You can draw on a large supply of innovators who have been building applications on the Internet and give them a chance to show what they can do on your television platform.”

Miller also said deployment of tru2way, PacketCable 2.0 and DOCSIS 3.0 will open up opportunities for applications across all three platforms and encourage the deployment of converged services.

“With [tru2way] you have a software environment on the set-top box and with PacketCable 2.0 you have a software system on the network,” Miller said. “It isn’t too much of a stretch to tie those together and deliver features across the video on your TV, your mobile phone, your fixed telephony, platform, your PC, etc.”

Comcast executive vice president and CTO Tony Werner agrees: “PacketCable 2.0 will be a very fundamental technology going forward. It will be a foundation that can support service to any type of device.”

Over time this could also reduce the cost of technical innovation. “The cost to deploy and develop new services gets lower and lower because you do not have to install new equipment,’ Miller said. “You’re just developing applications.”

Such innovations will make CableLabs even more important in the future, said Brian Roberts, chairman and CEO of Comcast and the current chairman of the executive committee at CableLabs, said via e-mail.

“[The role] CableLabs had played in establishing consistency across the industry will become even more relevant to our future of open standards and convergence,” Roberts wrote.