Tim, Have you heard of HLIT's involvement with these projects with TCA?
Mapping Out a Cable Modem Strategy
Dan Spoelman and Gary Law
June 1998
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The deployment of data services by cable operators has tended to depend on strategies which require expensive and time-consuming network upgrades, or has been restricted to newly-strung HFC systems. Now an alternative strategy based on new modem technologies and ISP acquisition is being put into practice by US cable operator, TCA Cable TV Inc.
TCA Cable TV Inc., the 16th-largest cable operator in the US with systems passing 1.2 million homes, last year decided to target both residential and commercial users with a broad range of services in order to maximise its revenue opportunities. The operator therefore began the search for a way to enter the data business quickly and cost effectively, taking into account issues such as network upgrade, technical support, backbone connectivity and content development.
The cities of Bryan and College Station, where TCA's system passes 55,000 homes and serves 35,000 subscribers, were chosen as the testbed for high-speed data equipment. After screening several vendors and their technologies, talking to Internet service providers (ISPs) and even cultivating a short-lived alliance with one ISP, TCA strategists decided on a two-pronged approach -- buying one of the area's fastest growing ISPs, and establishing a cable-system delivery platform based on synchronous code division multiple access (S-CDMA) technology. As a result, TCA has become the first major operator to deploy modems based on S-CDMA technology rather than utilising the more traditional time division multiple access (TDMA) technology. By choosing these approaches, TCA believed it could rapidly enter the data business, and the service went commercial last December.
Upgrading the Network
After several months of evaluating and testing a variety of cable modems using TDMA technology, TCA tested S-CDMA equipment in College Station. The operator concluded that the S-CDMA equipment was significantly more robust in noisy plant environments. This robustness, the operator believed, would translate to lower plant clean-up costs at the start-up phase, lower maintenance costs, and faster time-to-market.
TCA's expectations have been fulfilled. Earlier concerns that deployment would require plant-wide installation of high-pass filters proved unfounded and no filters are actually being used. TCA believes this to be particularly fortunate because the filters would have had to be individually modified with a band-pass window to serve any home that subsequently ordered impulse pay-per-view (PPV). Further, filters are not only expensive to install but require regular maintenance.
In fact, little plant clean-up was required. Two technicians responsible for spotting leaks and tightening and replacing connectors have found that, with minimal additional effort, they have been able to shift to a higher threshold by which 20-microvolt leaks now get corrective action, versus a previous 50-microvolt threshold. The extra effort has been minor, with insignificant financial impact. Only a small percentage of modem-service installations required re-doing cable drops, and in most instances these were caused by noise leakage from ageing copper braid coax.
Over a five-month period beginning in December, TCA assembled a team to set and activate the system's coax amplifiers and fibre/coax transceiver pairs for a return path at 21-27 MHz. It was not just the data service, but plans for impulse pay-per-view and perhaps other two-way services that prompted the two-way plant turn-up. The total cost to activate the system's upstream path was US$ 250,000 to US$ 300,000, or less than US$ 6 per home passed.
Control over Bandwidth
Another profit-related attraction of the S-CDMA equipment was its quality of service (QoS) controls, which provide the capability to control bandwidth so users can choose and pay for only the throughput they require. As a result of the cell-based, ATM-like flow of packets used in the equipment's spread-spectrum modulation method, pieces of the 14 Mbps capacity of a 6 MHz channel can be allocated to users in 64 kbps increments. Although the tiering capability itself is built into the system, TCA's engineers have written their own Java-language software to monitor and control the process. This gives TCA the ability to prevent `bandwidth hogs' from sucking up capacity for applications such as home-based web servers or large downstream file transfers. In addition, this capability has enabled TCA to offer a range of tiered offerings with varying capacity, thus increasing revenue opportunities.
The combination of a software upgrade plus an `edge concentrator' device that manages connectivity between the network operations centre (NOC), and a router via a standard 100 Mb interface which in turn connects to the Internet backbone, permits control of downstream bandwidth in 64 kbps increments. TCA is therefore considering offering tiered downstream data rates as well. At the high end, serious computer users can buy streaming data rates. At the low end, TCA is considering inviting many of its current dial-up users to convert to a cable modem service that has low bandwidth, but easily outperforms dial-up at a comparable price -- a win-win for both operator and subscribers. From the operator standpoint this provides more revenue per subscriber, eliminates local exchange carrier costs for both TCA and the customer, and puts the cable operator in a better position to compete for commercial accounts versus ISDN or xDSL providers.
Becoming an ISP
The decision to acquire an ISP, rather than build or ally with one, hinged on personnel issues. In addition to the cost of the required computer and networking equipment, it would have been necessary to find, hire and manage staff to run it. Lacking this expertise meant the logical choice was to buy an ISP. Furthermore, this meant instant ownership of an existing business -- in this case, Myriad Corp., a two-year-old company with around 3,000 dial-up customers, most of them with 28.8 kbps to 56 kbps modems plus a few with ISDN access. This ISP not only provided an instant revenue base, but was also a prime prospect for distributing the cable modems.
As a result, TCA bought the ISP last September. Its staff of six full-time and 16 part-time employees, already dealing with a range of activities from installations to custom web site design, also acted as TCA's think tank for coping with the Internet industry's dizzying pace of change.
Myriad became the technical support centre for all systems over which TCA introduced Internet access, a service now branded as TCA Internet. This same NOC which had driven Myriad's dial-up business is consequently being used to support cable modem subscribers. T-1 leased lines connected the NOC to Sprint's and MCI's high-speed Internet backbones, while a network router interfaced the backbone connections to an internal bus, attached to around 20 commercial-grade UNIX-based PCs.
Also acquired from Myriad were banks of dial-up modems, to which Myriad had been adding regularly to keep its growing subscriber base from experiencing busy signals. TCA said it now expects a significant reduction in dial-up modem capacity demands as customers move over to the shared cable modem network.
Steps required to introduce the cable modem data service included scaling up the newly acquired NOC, installing headend products and activating the return plant. Upgrades to the NOC included a larger newsgroup server, and adding more memory and processing power for several other servers. Also added was a device for managing data traffic between the NOC and the cable plant.
As the data subscriber base grows, TCA expects to acquire five additional devices to support the overall system's seven fibre trunks, each of which serves about seven fibre nodes. The 49 fibre nodes (plus four all coax segments) serve an average of 1,200 homes passed -- thus reaching the system's 55,000 homes passed. Each device presently uses its own `edge concentrator' device. Management and provisioning software configures and controls the overall network.
Although prices at the headend are subject to many variables, a ballpark figure for outfitting a headend serving the entire 55,000 homes, including buying or building a NOC, is approximately US$ 400,000, or just over US$ 7 per cable home passed.
Caching and Local Content
TCA has found that the local caching of content originating from web sites and databases scattered on the Internet is a surprisingly affordable and easy procedure. In the Bryan/College Station case, all the content requested from the web by 5,000 dial-up users and the growing cable modem user base is being cached on a PC with 128 Mb of RAM and 4 Gb of hard disk space. Standard Internet protocols make this process routine. When a subscriber requests content, a local computer ascertains whether the requested content is already cached locally. If it is, a local computer queries the remote content server, asking whether the content has been modified since it was last cached -- a much faster process than downloading the content again. If it has changed, an update is downloaded. TCA estimates that doubling the local PC's RAM and boosting disk space to about 9 Gb could accommodate even a tripling of the Bryan/College Station user base.
While building local content is not a core business for TCA, it does provide a content-creating utility for local companies. The operator views this service offering as necessary for two reasons. Firstly, if subscribers or would-be subscribers were to hire someone else to create and manage their content, that provider might steer their client to another ISP. Secondly, by hosting content for local companies and large institutions, TCA finds it attracts subscribers who are employed by those institutions. However, TCA is looking to establish close working relationships with web developers in markets outside Bryan/College Station, and expects the high speed of cable modems to be an attraction in building such relationships.
Growing Gracefully
Beyond the start-up phase looms a period when costs will subside into a less onerous combination of routine maintenance and growth-driven capacity upgrades. Looking beyond the current flurry of post-launch activity, TCA has planned a range of near-term enhancements. For example, it intends to have software in place within months which allows subscribers to go to a web page and dynamically order up extra bandwidth for short periods of time, for instance, a video conference. Payment can be made via an established credit-card, or bank debit arrangement, or by encrypted transmittal of a credit card number.
One predictable area of future growth includes expanding the headend's connections to the Internet backbone. TCA plans to keep its existing redundant T-1s to MCI and Sprint, while adding capacity as needed via tiered service on a DS-3 line from a third provider, UUNet/WorldCom. If the headend router encounters congestion on the first backbone pipe it tries, it automatically tries the others. Both caching and the NAP represent essential means of holding down backbone traffic and its cost.
Maintenance costs have been significantly lower than TCA estimated. Without filters and with only marginally more aggressive CLI sweeps, the S-CDMA equipment has performed up to vendor specifications, consistently delivering 14 Mbps raw throughput both upstream and downstream -- even with system noise levels at SNRs better than 13 dB. In particular, this equipment has outperformed TDMA equipment in periods of extremely dry weather, when old copper-braid coax is most vulnerable to noise leakage.
As the subscriber base grows, the number of fibre trunks feeding each data management device will be scaled back by adding more controllers. Further, TCA is also considering adding DOCSIS-compliant headend equipment. One possible option is a multi-mode cable modem system that is compatible with both DOCSIS-standard headends, as well as S-CDMA systems. This would allow TCA the flexibility to deploy both types of modem architectures in one system, while avoiding obsolescence of their initial capital investment.
Path to Profitability
TCA projects the Bryan/College Station data service to recoup its initial capital outlay within 24 months. A second data-service start-up is being deployed in Amarillo, Texas, this month, followed by rollouts of S-CDMA-based modems across two other TCA systems before the end of the year. Rather than clone complete NOCs in each city it serves, TCA plans to gain major cost savings by linking those sites, via the Internet backbone, back to the College Station headend, which will become a `super-NOC', supporting multiple remote systems. Tasks like customer technical support, authentication, billing, and email serving will be supported from College Station. But Amarillo and the other planned sites will have their own backbone connections, controllers and network routers. As subscribers grows, content caching and possibly other functions will gradually be off-loaded to the offspring systems. But the cost savings from running a `super-NOC' should be substantial.
TCA recognises the need to build out its systems with HFC over time, as it grows its digital services. This will enhance the operator's ability in the long run to support a broad range of digital offerings, including digital video and IP telephony. As TCA upgrades its plants, it intends to take advantage of the next-generation modem, which can operate in an MCNS-standard mode or deliver a blazing 30 Mbps two-way performance over fibre-upgraded cable plants. These data rates put operators such as TCA in an even stronger competitive position, with the ability to offer the broadest range of commercial and residential data services. t
Dan Spoelman is vice president of operations with TCA Communications, and Gary Law is vice president for marketing and business development with Terayon Communication Systems. The authors acknowledge the contributions made to this article by Tom Way of TCA Cable TV, Jonny Hinojosa of TCA Internet, and John Hamburger of Terayon Communication Systems. |
