Creating Bandwidth to Enable Revenue Streams6/10/2001 8:00 PM Eastern
Consumer demand for new services never seems to end. When cable TV was born 50 years ago, many people wondered who would pay for this new service when over-the-air broadcast was free. However, the public's attachment to cable continued to grow as content availability and choice — such as Home Box Office, pay-per-view, and other premium services — expanded.
DirecTV and other satellite services have proven that there is high demand and subscribers are willing to pay for more content, channels and options. More recently, consumers have adopted high-speed data services over cable, and now they anxiously look to the future for new services such as voice-over-Internet protocol (VoIP), video-on- demand (VOD) and interactive TV.
This provides both an opportunity and a challenge for broadband operators, such as MSOs. New services bring incremental revenue streams and growth, but they also greatly increase bandwidth requirements. Many new services are not growing as quickly as originally envisioned, and one of the major reasons is the lack of uniformly available bandwidth.
THE BANDWIDTH CHALLENGE
The problem operators currently face is how to have enough bandwidth available to cost-effectively deploy new services, such as more digital video channels or additional tiered high-speed data services.
Demands for bandwidth are always increasing and over time there never seems to be enough bandwidth available to deploy all the services desired. Traditional methods of adding bandwidth — such as splitting nodes, building out infrastructure or converting analog spectrum to digital — are capital-intensive, time-consuming and often not economically justified. Even if cable plants have been recently upgraded, more cost-effective bandwidth will always be needed.
The problem only becomes more challenging as the penetration of new services such as high-speed data rapidly increases. Digital competitors, like direct-broadcast satellite, are encroaching on the installed base of cable customers, and cable operators face the pressures of overcoming the "digital divide" by delivering broadband services to all communities.
Operators face competitive pressures to carry digital and analog signals, and costly buildout of infrastructure is an increasingly difficult challenge in a time of constricting capital markets. New technologies can unleash the true capabilities of broadband access networks.
THE BANDWIDTH SOLUTION
A potential solution to bandwidth limitations is to use existing infrastructure and bandwidth more efficiently.
By employing next-generation embedding technology, operators can swiftly create new bandwidth on the existing cable infrastructure that can be used to deploy additional services, including more digital video channels and tiered high-speed data services.
The technology offers a compelling value proposition, since operators can create a great deal of bandwidth using the infrastructure in place today with only minor incremental investment. They can create "virtual spectrum," which is like adding over 100 megahertz of billable capacity without additional cable plant construction.
Breakthroughs in embedding technology will allow operators to add up to 6 Mbps per channel with no displacement of existing services. The operator can, in effect, "spray paint" bits throughout the video channel to insert content. Operators will be able to insert content under video channels, thus creating exciting opportunities for incremental services.
These extra information streams can be used to carry additional voice, data and video transmissions over broadcast infrastructure, thus substantially increasing the capacity of broadband access networks. Embedding solutions will co-exist with current services while maintaining compatibility with today's broadband-network standards. They can also support emerging technologies such as high-definition television (HDTV) and better comply with dual-carriage demands.
Operators will be able to reduce or even eliminate network congestion and optimize network assets already in place through the deployment of a new generation of very high-speed broadband access technologies.
Operators can deploy next-generation embedding technology on the cable access infrastructure to increase channel capacity, augment revenue streams and create the incremental bandwidth needed to support quality of service (QoS) requirements for enhanced services such as tiered high-speed data or VoIP.
SOLVE LAST-MILE CONGESTION
Traffic flows can be encoded at the headend and decoded in the subscriber location using a chipset built into a cable modem, set-top box or Internet appliance. In a time when operators are conserving capital while deploying new services, this technology will allow them to dramatically leverage infrastructure investments while postponing or even eliminating plant upgrades.
Advanced embedding techniques provide a framework for inserting signals into traffic flows, and advances in this technology will allow broadband operators to create new revenue streams by embedding digital content into broadband video transmissions. Because next-generation embedding technology will not distort or disrupt current services within the utilized spectrum — whether those services are analog or digital video — substitutions or modifications to the customer equipment receiving those services are not required.
As a result, cable operators will be able to solve last-mile congestion problems, offer new revenue-generating services, and control capital expenditures. The technology will allow service providers to create additional sources of revenue while allowing them to slow down spending on network upgrades.
For example, broadband operators will be able to insert up to 6 Mbps of additional information within a 6-MHz channel occupied by video without noticeably impacting the video's transmission quality. In this example, a cable operator currently using only a single channel for data services could use all the analog channels to send new content, resulting in additional aggregate transmission rates of more than 500 Mbps.
NEW SERVICES, NEW REVNUE STREAMS
This incremental bandwidth will allow long-awaited services to be swiftly deployed and creative new services to be brought to market sooner. Major revenue-generating services, such as more digital video channels for digital tiers, PPV and VOD can be cost-effectively enabled with this newly available bandwidth. Also, high-speed data services can be deployed more uniformly and more discrete tiers of service can be offered. In the future, ITV and other applications that require increasing bandwidth can be efficiently delivered.
Next-generation embedding technology also will help broadband operators efficiently migrate to all-digital infrastructure.
Operators will be able to conduct gradual migrations from analog infrastructure to all-digital networks on flexible timetables, while increasing billable revenue from each video channel. They can extend the life of analog plant today while preparing for a smooth, planned and risk-controlled migration to digital broadband-access networks when it makes the most economic sense. Embedding technology can create up to 40 percent additional bandwidth on digital networks, and since it complements other broadband networking standards, operators can ensure compatibility with legacy equipment and services.
SWIFTLY DEPLOY NEW SERVICES
The ability to create incremental bandwidth over existing infrastructure will enable the rapid deployment of new revenue-generating services. These services will include more digital TV channels, tiers of high-speed data, streaming media and ITV. Embedding technology creates "virtual spectrum" that is cost effective, seamless, and easy for broadband operators to implement and manage. This technology also will support additional applications, such as wireless broadcast embedding and digital radio embedding.
The delivery of next-generation embedding technology solutions will allow operators more detailed QoS control, including dynamic control over QoS levels that can be automatically provisioned in software to support pay-for-use services such as VOD.
By creating new bandwidth over current broadband access networks, operators will be able to deploy enhanced services that bind subscribers to the network, delay or postpone major upgrades in network infrastructure and swiftly increase revenue-per-subscriber ratios.
Bandwidth creation technology promises billable broadband access capacity that is more than an order of magnitude greater than current technologies, and next-generation embedding techniques can revolutionize the profit models for service deployment.
Andrew J. Audet is president and CEO of Chinook Communications. He was formerly general manager of the Motorola Cable Data Products Division.