Rollouts Fuel Switching Buzz

1/19/2007 7:00 PM Eastern

After five years of trials, re-trials, business modeling and countless tweaks, switched digital video is poised to meet its much-heralded potential as a bandwidth-saving technology with significant channel-expanding capabilities.

The rise of switched digital technology as a viable, cost-effective means of squeezing more bandwidth from existing networks without costly upgrades, while efficiently managing bandwidth, has sparked a keen interest from cable, evidenced by the buzz heading into this week’s Society of Cable Telecommunications Engineers Conference on Emerging Technologies in Houston.

“The past 2 to 3 years, SDV has pushed hard with real testing and real data. The technology has existed, and the business case has always been viable. Now is the time,” said Adi Kishore, director of global media and entertainment for The Yankee Group.

It’s also time for more switched digital rollouts, led by Time Warner Cable, which has deployed the technology in eight markets, with three more planned for 2007. A growing number of operators are becoming switch-digital converts, after witnessing Time Warner’s successful Austin, Texas, trial and its subsequent deployments.

The Road Ahead
This year is expected to be a breakout year for switched digital broadcast, as more content and delivery methods enter the market. Here, according to Motorola, are some of the key factors that will drive the technology this year and beyond.
Source: Motorola press release
Time-shifted, place-shifted TV: Appointment television has become TV on demand. Look for more ways to access TV when and where you want it.
More HD: More content and more ways to get it: over-the-air, over cable networks and via IP.
TV sets vs. Web TV: TV on the Internet isn’t a passing fad, but the traditional television set isn’t going away either. 2007 means more battles on the road to convergence.
Behind the video: New video applications and more content will feed the demand for more bandwidth in 2007. Invisible to the consumer, bandwidth management is an increasingly critical challenge to service providers charged with delivering video.

“The big MSOs are the innovators, but the small and mid-sized operators can do SDV too. We’ll see the big MSOs kick the tires and make it work. SDV makes a lot of sense, and we’ll see it widely deployed in the next four years. It’s a logical solution to bandwidth problems we know are coming for operators,” Kishore added.

And certainly logical for Time Warner, which plans to deploy switched digital in all of its markets. “SDV is absolutely living up to its potential,” Time Warner corporate executive vice president and chief technology officer Mike LaJoie said. “Switching allows you to introduce as many channels as you want, including HD. And, as we work with more vendors, the cost will drop. There are also very few challenges to deploying SDV. It’s more of an operational/functional challenge and making sure the plant is tight.”

LaJoie said scaling switched digital video to hundreds of thousands of subscribers is not the major hurdle some believe it to be. “We’ve rolled out SDV to hundreds of thousands of customers and there are no scaling issues. SDV simply takes advantage of known architecture and allows you to use switching technology that is more efficient than broadcast. Our intention is to rollout SDV everywhere,” he said.

Switched digital video enables customers to join an existing stream. Instead of switching all programs all the time, it takes advantage of hybrid fiber coax architecture to fit about 300 digital broadcast channels into 100 digital slots, about a 33% capacity gain. By intelligently redirecting the signals, only the service that customers want or are using will be occupied, and once it is deployed, higher bandwidth-consuming services such as high-definition can be targeted at customers.

Cable is no stranger to bandwidth issues. The industry has struggled to find an effective way to reclaim and manage precious bandwidth to use as a competitive tool.

“A large number of our customers [cable operators] have reached a point where they’re capped with bandwidth capacity, even after billions of dollars spent on plant upgrades. SDV allows a cost effective way to take existing plant capacity and use it in a cost efficient manner. It’s become a significant part of our customers’ business, and in 2007 we expect cable to be extremely aggressive with SDV,” said Jeff Taylor, director of product strategy and management for Scientific Atlanta, a key player in the switched digital space.

Aggressive indeed. At Charter Communications, switched digital’s future is brightening, company CTO and executive vice president Marwan Farwaz said during his “tech talk” session held recently.

“We must mine the bandwidth we have today and we want to look at switched digital video and advanced codex. We have significant 860 [Megahertz] and 750 Mhz systems and want to look at SDV. It’s more than just on the drawing board, and we’re selecting markets that need it. It’s a critical component for bandwidth management,” he said.

Cox Communications is also advancing its switched digital video technology, albeit on a lesser scale and not yet with the vigor of some other operators. “We have begun using an SDV approach in our Northern Virginia market and continue to look at it as one of the tools available to us to make the most of our bandwidth, so we can do myriad things such as launching more HD channels, more niche programming and even increasing our Internet speed,” Cox director of media relations David Grabert said. “We view SDV as just one of the tools in our chest to be more efficient with our bandwidth, and have plans to continue deploying SDV through 2007.”

SA, along with a growing contingent of companies that are expanding their switched digital presence, is moving ahead with next-generation technology and processes, including its “Universal Session and Resource Manager,” or USRM, in an effort to keep in step with cable’s growing appetite for bandwidth.

“We’re going to see more field deployments of SDV this year and in 2008, so we’re working on the next natural extension of this architecture, USRM,” said SA’s Taylor. “It controls the pool of bandwidth, so it can real-time manage switched digital content. Operators simply have a software upgrade. It can work for data traffic too. We’re also looking at targeted advertising and microcasting. But first, it’s about reclaiming bandwidth.”

BigBand Networks, which has been on the leading edge of switched digital technology from day one, is pushing the technology even deeper into cable networks, including work with Cablevision Systems’ international programming.

“BigBand’s fourth generation product is being used in the next generation deployments of SDV and embraces open systems,” BigBand vice president of product marketing and business development Biren Sood said. “There was a learning curve and lots of moving parts, but now companies have fine tuned the SDV approaches and are learning how to install the equipment while the deployment time has dropped to four months from kick-off to deployment. Those learnings are now bearing fruit. And as we move to open standards, we’ll see the deployment become even easier.”

Motorola too is expanding its switched digital play, most notably through its two key acquisitions, Broadbus and Vertasent. “We’re looking at the evolution of cable headends to the on-demand environment, and the end-to-end SDV system can be very complex. But it provides many benefits to help operators, so we are working on both the business and technical issues very aggressively, with the drivers being more HD content and reclamation of bandwidth,” said Bruce Bradley, Motorola director of product management for connected homes solutions.

Another driving force, albeit still in its embryonic stage, is addressable advertising which, according to Bradley, “is certainly part of the SDV road map.”

Yet switched digital video must prove itself beyond a few market trials, some executives said.

“The concept, if proven to work, is a major step forward. Time Warner Cable is in the lead, but everyone else isn’t that far along,” said Buddy Snow, vice president of product marketing for Terayon, which is currently in trials with decryption and switching architecture. “They get the theory, but aren’t convinced of the capital expenditure and value if bandwidth can’t be gained. So, they’re figuring out the technology and business models. I just don’t think it’s ready for primetime.”

And when will switched digital truly be ready? “There are still technical questions to be answered, and scaling to millions of subscribers is a challenge. One massive switch to millions of customers probably won’t happen. There just are not enough laps around the track with SDV and the model needs to get right, so there’s lots of statistical work to do. Additionally, most of the big MSOs still don’t have a clear picture of what the advertising model looks like either. Now, it’s more of an operational/architecture issue,” Snow said.

Switched digital video also requires a mix of equipment and software, and their integration into existing networks. Operators need to modify headend components, edge modulators, switch/session managers and a host of other hardware, as well as roll out set-top boxes able to switch the channels on or off.

There’s also an installation process and interfacing with existing systems. Nevertheless, switched digital is gaining momentum as a serious contributor to bandwidth reclamation and management.

“The technical components remain the same, but are progressing, including intelligence and functionality on the set-top with the headend. I think the biggest changes with SDV will be open standards and more interoperable components,” Sood said.

“There are ongoing technical issues with SDV, and scaling issues remain, along with determining just how much savings there is with adding HD, more channels and the capex needed to add SDV,” Tandberg TV senior vice president of marketing and business Braxton Jarrat said. “But it’s still a new technology and cable operators are very sensitive to anything that disrupts user experience. SDV has proven its viability, now the question is what technology do you use and how much bandwidth are we going to save,”

Yet Tandberg sees many upsides to switched digital.

“We’re confident in the SDV market and have invested accordingly in related technologies and the platform to migrate to MPEG-4 [Moving Pictures Expert Group],” Jarrat said. We’re also looking at integrating advanced advertising capabilities into the SDV market. Cable now sees SDV as a bandwidth-saving option.”

Operators also view the technology as an increasingly valuable competitive tool.

“Direct TV just announced 60 HD channels. That really validated HD as a major differentiator and helped accelerate plans for SDV,” Jarrat added.

Motorola’s Bradley concurred. “The SDV driver is more HD content. SDV will allow 10-14 HD channels per QAM [quadrature amplitude modulation] instead of just two per QAM without it. That’s a substantial difference. SDV allows you to not squander the programs.”

And not squandering valuable channel capacity counts. Big time. “There are many incremental benefits that are driving SDV technology and from a market-need perspective, it is starting to have an impact,” said Kishore. “There are implementation issues, and networks must be configured properly, but there are no massive challenges to overcome. We’re bullish on the technology.”

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