CableLabs has published the anticipated specifications for DOCSIS 4.0, the next technology standard for moving data across the cable industry’s hybrid fiber coaxial (HFC) networks.

The new specifications, an upgrade over the industry’s current DOCSIS 3.1 standard, will enable cable systems to deliver download speeds of up to 10 gigabits per second. Upstream speeds can approach speeds of 6 Gbps.

Importantly, DOCSIS 4.0 unifies two competing technologies for moving HFC networks to 10-gig speeds. Full Duplex DOCSIS (FDX) would combine downstream and upstream signals on a single frequency, delivering symmetrical speeds up to 10 Gbps. FDX is favored by Comcast, but its stringent network technology requirements made it economically infeasible for many operators.

Extended Spectrum DOCSIS keeps upstream and downstream traffic separate. But it would increase the spectrum of HFC networks to 1.8 GHz from a current level of 1.2 GHz found on the fastest networks.

Working Towards 10G

CableLabs is the technology consortium for the major U.S. cable companies. And it’s serving a broader cable industry initiative called “10G,” an effort to migrate cable networks to a future in which 10 Gbps speeds power increased cloud applications, video conferencing, smart homes and distance learning — a future that is, well, here today for many of us.

DOCSIS 4.0 gives cable industry engineers in purchasing roles clarity on how to move forward in a network technology realm being disrupted by virtualization and Distributed Access Architecture (DAA).

“With the DOCSIS 4.0 specification establishing a clear path forward, giving cable operators the flexibility to pursue either Extended Spectrum DOCSIS (ESD) or Full Duplex DOCSIS (FDX), operators can move ahead with their remote PHY and remote MAC-PHY deployments to solve immediate headend and power consumption issues,” Dell’Oro Group analyst Jeff Heynen wrote in a March blog post.

But don’t look for commercial deployments of DOCSIS 4.0 networks by operators in the months to come. Cable operators still have a glut of network capacity from huge investments made over the last five years in DOCSIS 3.1 infrastructure. These buildups enabled them to offer customers 1 Gbps speeds, the ceiling for which consumers are nowhere near bumping into just yet.

Cable's Net Holds Fast

And the networks are holding up well to current capacity strains wrought by homebound social distancing. Comcast’s top technologist, president of technology and product Tony Werner, said the No. 1 cable company’s networks are holding up just fine in locations like San Francisco and Seattle, which have seen traffic increases as high as 60% in peak weekend usage hours recently.

“Usage is on the rise as more people are working, learning and doing all their entertaining at home,” Werner said on a March 30 call with reporters. “But it’s all within the capability of the network.”

The essential role of broadband networks in the current Covid-19 crisis is well established. A recent article in Multichannel Newsvery well described how cable operators are stepping up to meet demand despite enormous challenges. But what are the short-term and long-term implications of the pandemic on the evolution of the cable infrastructure? We see this play out in three phases on a broad level but with notable differences among operators and in different geographies:

Mitigation

In the near term, operators will resort to short-term measures to meet growing demand. They are freeing up capacity in the downstream spectrum by reallocating QAMs to DOCSIS, increasing compression, continuing node splits and other moves. In the upstream, operators who have deployed DOCSIS 3.1 can leverage the Profile Management Applications and add subcarriers. At the same time, content providers are playing a role by downgrading their content, for example, Netflix and YouTube, or staggering the release of their games, such as Sony and Microsoft.

Cautious investment

The health crisis will inevitably lead to some economic contraction despite the massive recent stimulus package. This crisis will impact small and medium businesses as well as consumers, the sweet market spot for cable operators. At the same time, the recent online spike will not completely go away once the crisis is over. Virtual engagement is here for the long term, and cable operators need to add capacity, particularly in the upstream, to meet new demand characteristics. At the same time, MSOs will not lose track of their 10G vision and will continue to plan for massive capacity expansion, including trialing DAA and virtualization.

Recovery

Over the longer term, this crisis has highlighted the importance of broadband networks, and the utilization patterns will even exceed current projections. Cable operators will need to update their playbooks to ramp up capacity expansion. Such scaling will need a new architecture, and the distributed access architecture and virtualization will be at the heart of these playbooks, along with emerging plans to deploy the recently ratified DOCSIS 4.0 specification for much expanded upstream capacity and low latency.

It is hard to believe, but the entire world is grinding to a halt as more and more communities are forced into lockdown or shutdown to prevent the spread of the Coronavirus. In this bleak and difficult situation, the Internet has emerged as the nervous system of the world, keeping education, business, healthcare and people connected as never before. It is not that people have suddenly discovered the online world, far from it; however, in the space of a few weeks, the world has converted to eLearning, telemedicine, virtual meetings, virtual conferences, and so on. Even religious and arts institutions are streaming to their constituents and the public at large, not to mention the increase in streaming and gaming now that most people are confined to their homes. In February, Cisco saw 22 times the amount of network traffic per second it normally gets for WebEx, according to CNBC. It is likely to be even higher in March.

None of these use cases are new, but they have all of a sudden been adopted on a massive scale. Early reports from Europe suggest a 40% increase in network traffic. Can networks handle this amount of traffic?

To be sure, many of these trends are short term, driven by necessity; for example, schools are repeatedly making clear that eLearning is a short-term measure and is not a substitute to in-person education. Furthermore, the success of these online initiatives requires much more than fast and reliable broadband; at a minimum, they need to be complemented by new processes, appropriate resources, clear expectations, training, and a different IT infrastructure, among other things. However, it is likely that things will not necessarily revert to business as usual when the crisis has passed.

What is clear is that in the near term, the world needs a lot more broadband and needs it to be fast, reliable and affordable. To their credit, ISPs have stepped up to the task. They are removing consumption caps, increasing speed, providing free bandwidth to the under-privileged, and committing their resources to keep broadband networks reliable and functioning in this moment of great need.

Do cable operators have the capacity to meet the exploding demand in the access network in terms of speed, reliability and latency? It is true that the industry has largely wrapped up the deployment of DOCSIS 3.1, which delivers speeds up to 10 Gbps downstream, and operators have been continuously reducing the size of their service groups by splitting nodes. However, the unprecedented demand on their networks may require a new playbook, because this surge may stay with us for a while, and some of the increased usage will prevail for the longer term.

Will this surge in demand be the catalyst for the industry to seriously consider migrating to the distributed access architecture (DAA) on a large scale? Will this need to suddenly increase capacity become a driver to consider virtualized solutions that enable easier scaling in the headends? Will it drive operators to allocate more capacity to upstream?

The cable access network remains limited in the upstream: most operators still allocate only 42 MHz to upstream with a minority allocating 84 MHz. Upstream capacity will become crucial as more people rely on virtual meetings, eLearning, etc. The industry has a good upstream option with the 204 MHz split that is currently supported (as an option) in the DOCSIS 3.1 specifications and that is made available by most major industry vendors. The 204 MHz split can enable 1 to 1.5 Gbps upstream. Of course, there is no free lunch; more spectrum allocated to the upstream means less in the downstream, and there is a need for a guard band or “spectral penalty” of about 54 MHz. The migration to 204 MHz requires changes to existing nodes and amplifiers on the HFC plant.

Multiple operators are already trialing or deploying DAA, particularly the Remote PHY version, and some have already adopted virtualized solutions. It is entirely possible that this trend will gain momentum driven by market need.

It is too early to tell what the long-term implications of this crisis will be. What is certain is that it will not be business as usual when we are finally out of crisis mode, and for broadband providers, it might spur a new cycle of infrastructure investment.

While there’s plenty of forward-looking discussion these days about the “10G” future of DOCSIS-powered hybrid fiber coaxial networks, fiber will soon be a far bigger market for network technology vendors.

In fact, according to new research just published by Dell’Oro Group, it won’t even be that close.

By 2023, the global market for passive optical networking (PON) equipment will be worth $7.3 billion, the research firm said, with 10 Gbps EPON and XGS-PON deployments driving growth, along with the maximization of existing 2.5 Gbps GPON networks.

Conversely, global spending on cable infrastructure will only reach $1.6 billion by 2023, Dell’Oro explained, as cable operators “slow their Converged Cable Access Platform (CCAP) purchases while focusing on their Distributed Access Architecture (DAA) deployments.

“Fiber deployments continue to expand around the world, thanks to increased competition and an improved funding environment for both public and private networks,” noted Jeff Heynen research director at Dell’Oro Group. “Today’s XGS-PON trials are quickly moving to production deployments, positioning operators to compete with cable DOCSIS 3.1 networks.”

Heynen’s report predicts the overall broadband access market will grow at a 4% compounded annual growth rate (CAGR) over the forecast period.

Dell’Oro said in March that the global broadband access gear market reached $3.4 billion in 2018.

Comcast said it has completed its 18-month mission to deploy DOCSIS 3.1-enabled 1-gig services.

The operator said that its DOCSIS 3.1-enabled 1-gig services are now available to 58 million homes and businesses, completing a rollout that started around 18 months ago.

Comcast would not reveal how many of its more than 26.5 million broadband customers are paying for 1 Gbps services. However, the company said that 75% of its subscribers have downstream speeds in excess of 100 Mbps.

Related: Comcast Broadens DOCSIS 3.1 Rollout

Comcast’s announcement coincides with similar benchmark from other cable operators. Charter recently said that it was 95% done with DOCSIS 3.1, while Cox Communications claims to be about 90% finished.

Speaking to MCN, Eric Schaefer, senior VP and general manager of broadband, automation and communications for Comcast, directed the attention to xFi, the operator’s Wi-Fi management solutions. He said 15.9 million Comcast homes currently use the product.

“A lot of folks are going to talk about speed, but what’s important for the vast majority fo people is converge and control in the home,” Schaefer said.

Arris said that European operator Eltrona is the latest cable company to deploy its Remote Pay distributed architecture solution to deliver DOCSIS 3.1-powered 1-gig broadband service in Luxembourg.

Eltrona is using the Arris E6000 Gen 2 converged cable access platform, along with E6000N R-PHY, which provides both the CCAP core and R-PHY device. In this approach, which is defined in the CableLabs Modular Headend Architecture, the PHY layer is moved from the CCAP into a node or remote shelf, but the MAC processing, provisioning and monitoring functions remain in the headend.

Related: Arris Touts Euro Customer ‘Wins’ at IBC

Also being deployed: Arris Touchstone TG3443 Cable Voice Gatgeways, which include 4x4 802.11ac dual band radios.

“Our focus for the remainder of the year continues to be on expanding our E6000 footprint,” declared Arris CEO Bruce McClelland during Arris’ second-quarter earnings call in August.

“With its market-leading density and throughput, coupled with its flexibility to support DOCSIS3.0, DOCSIS3.1, video and Remote PHY, [the E6000] continues to provide the best value for cable operators,” McClelland added. “And you can watch for a new DOCSIS3.1 launch announcement from a major international customer over the next few weeks that leverages our full Network & Cloud portfolio, as well as CPE products.”

Altice USA today said that the first wave of symmetrical gigabit-speed fiber-to-the-home deployments have launched in select parts of Long Island.

According to an Altice press rep, the cable operator is delivering 940 Mbps upstream/940 Mbps downstream service, priced at $79.99 a month unbundled, to a select group of Long Islanders.

Altice didn't disclose what parts of its Long Island Optimum footprint the FTTH services are available in.

Related: Altice USA to Skip DOCSIS 3.1, Roll Out All-Fiber Network

Alice also said that it’s enhancing DOCSIS 3.0-powered HFC speeds in its Optimum footprint to 400 Mbps, with gigabit speeds scheduled to be available over HFC in 2019.

"Altice USA is focused on offering the best network and connectivity experience, and the activation of our full-fiber network with smart WiFi, the most advanced of its kind in the nation, demonstrates our commitment to creating converged customer experiences,” said Hakim Boubazine, Altice USA co-president and chief operating officer, in a statement. “Delivering our symmetrical Altice Gigabit fiber service is just the start as we continue to scale our fiber network to bring our customers up to 10 gigabit internet speeds to support the explosive growth of data usage while laying the groundwork for the future of the connected universe.”

Alice USA announced in November 2016 that it would eschew DOCSIS 3.1 upgrades across Optimum in favor of a five-year, FTTH deployment plan. 

Ongoing global shortages of electronic components, including multi-layer ceramic chip capacitors, are getting worse, and relief is not expected until at least the end of 2018.

That is the conclusion of reports issued recently by Morgan Stanley and Stifel, which are tracking a supply problem that has impacted the ability of vendors including Arris to deliver electronic components including gateways and modems.

“Lead times remain elevated across a number of components, including capacitors, resistors, memory and certain discretes, according to our analysis of distribution data,” Stifel reported in a recent update. “We continue to see signs of double ordering as customers scramble for parts. The multi-layer ceramic capacitor (MLCC) shortage is the most severe, with many parts seeing order-rescheduling requests from customers waiting on MLCCs or other parts.”

Parts suppliers are currently in the process of adding additional production capacity. But these moves won’t impact the market until at least the end of the year, the reports say.

Related: Arris Hit Hard By Shortages of Capacitors, DRAM

Supply in particular for MLCCs—staple components of devices including modems and smart phones—is being impacted by surging demand in the automotive, IoT and industrial markets, the investment banks say.

In June, Arris issued a note to operator clients warning them to expect delays and price increases on certain products. This resulted in some clients shifting orders for items including DOCSIS 3.1 modems to other suppliers.

“Most companies like us are in an environment where trying to secure supply is on a week-to-week basis and prices fluctuate pretty significantly,” Arris CEO Bruce McClelland told investment analysts during his company’s second quarter earnings call.

“We're not in a position we can absorb those costs. And so, we've been pretty upfront and open with customers on what the price increases are,” McClelland added.

As surging demand makes the procurement process for electronics more challenging, there is also the issue of tariffs that is impacting the market.

“Of particular concern to Nokia are the recent tariffs imposed on trade with China, which specifically target a wide range of components that are critical to 5G,” Nokia wrote in an FCC filing last week. “Unless exemptions are provided for these products, these latest duties threaten to raise the cost of 5G infrastructure in the U.S. by hundreds of millions of dollars. This is an important context that further emphasizes the need for the Commission to lower barriers to deployment where it can.”

Arris has announced a broad-reaching deal with Australia’s NBN Co. to provide Full Duplex-capable, DOCSIS 3.1-powered broadband services to 3 million of the cable operator’s subscribers by 2020.

Under the agreement, Arris will supply its E6000 Gen 2 CCAP platform and its OM4100 OptiMax 4x4 segmentable nodes, as well last its CM8200B DOCSIS 3.1 modems.

Related: Arris to Be ‘More Selective’ With Its Set-Top Box Business

Arris will also provide its ServAssure NXT network management platform, as well as the resources of its global software and devices services team.

“They’re able to add bandwidth and pay 65% - 75% of what they paid before,” noted Dan Whalen, president of Arris’ Network & Cloud division, in an interview with Multichannel News. “They’re able to do more using less power and less space.”

Whalen noted the preponderance of fiber competition in the Australian region. The ability for NBN to provide the gigabit symmetrical services enabled by Full Duplex DOCSIS will be a significant competitive boost for the operator, Whalen said.

He compared the Down Under market to Latin America and the Caribbean, noting a shortage of technologists in the region familiar with next-generation HFC network. NBC, Whalen said.

“There’s a lot of fiber-to-the-curb and fiber-to-the-home, but but not a lot of people to support DOCSIS," he said.

This has benefited Arris’ growing Global Services unit, Whalen added, which is being called upon by NBN to help manage the network.

“They’re looking for someone to step in and manage the end-to-end operation of their network,” he explained.

Related: Arris Hit Hard By Shortages of Capacitors, DRAM

At least on the CPE side, Arris has been troubled of late, as all companies working in the electronics business, by shortages of components, including memory chips and capacitors.

SNL Kagan analyst Jeff Heynen said he believes the impact of these component shortages should be short-lived. “Though it will have an impact on how quickly DOCSIS 3.1 devices can be deployed,” he added in a direct tweet to Multichannel.

For his part, Whalen downplayed the effect of the shortages in Arris’ Australian DOCSIS 3.1 deployment.

“I feel pretty comfortable that we have workarounds,” he said. 

Charter Communications announced last week that it has launched Spectrum Internet Gig, a broadband service powered by DOCSIS 3.1 upgrades, to markets covering more than 4 million homes.

The latest batch of launches include more than a dozen new markets, including Cleveland; Erie, Pa.; Springfield, Mass.; Bowling Green, Ky.; Hartford, Conn.; Charleston, S.C.; Orlando, Fla.; and Toledo, Ohio.

Those launches follow an expansion of D3.1 to 14 million more homes announced in April.

With the last round of rollouts factored in, Charter estimates that Spectrum Internet Gig is now offered to more than 27 million homes, putting it more than halfway toward its goal of making the service available to its 41-state footprint.

Charter said it’s on track to offer 1-Gig service to virtually all of that footprint by year-end 2018.

In the early going, Charter has been selling the new data cap-free offering, which pairs a downstream that maxes at 1 Gbps with an upstream up to 35 Mbps, for $104.99 per month to new customers. In markets such as Oahu, Charter has been offering it to existing customers with TV service for $114.99 per month, and $124.99 per month without the TV service bundle.

In some D3.1-enabled markets, Charter has also been doubling its minimum downstream internet speeds (to 100 Mbps or 200 Mbps, depending on the market) at no added cost.

Charter ended Q1 2018 with 22.87 million residential broadband subscribers. About 25% of that customer base was getting minimum downstream speeds of 200 Mbps by the end of that period. 

Comcast has launched 1 Gbps (downstream) broadband service for residential and business customers using DOCSIS 3.1 in several counties in central and western Pennsylvania.

In the western part of the state, launches are complete in Armstrong County, Clarion County, Indiana County, Jefferson County, and Venango County. In central Pennsylvania, 1-Gig is now offered in Berks County, Dauphin County, Northumberland County, and Schuylkill County.

In those areas, Comcast is selling the 1 Gig residential service (paired with upstream speeds that max out at 35 Mbps) under the “everyday” price of $104.95 without a contract, and a promotional price of $89.99 per month when subs sign up for a 12-month agreement.

The deployments get Comcast a step closer to reaching a goal of completing D3.1 upgrades across the vast majority of its HFC footprint by year-end 2018. At the end of Q1, about 90% of Comcast’s footprint was upgraded for 1-Gig. 

Comcast ended Q1 with about 24.21 million residential high-speed internet subs, but didn’t break out how many were taking 1-Gig speeds (some 75% of them are on downstream speed tiers of 100 Mbps or more).

For 1-Gig subs who lease devices from the MSO, Comcast is enabling D3.1 in the home using its xFi Advanced Gateway, a product formerly known as the XB6 that is also equipped with an 8x8 WiFi antenna array using 802.11ac version 2 and a set of IoT radios (Bluetooth LE, Zigbee and Thread). Comcast customers also have the option of buying D3.1-certified modems from suppliers such as Arris, Netgear, and Zoom/Motorola.

RELATED: Comcast Goes Wide With DOCSIS 3.1 Gigabit Gateway

Comcast said its WiFi network footprint, via a mix of deployments in metro outdoor areas, business locations in inside customer gateways, is comprised of more than 19 million hotspots. 

Targeting an opportunity rising as cable operators pursue new distributed access architectures, ATX Networks this week introduced a new digital optical gateway platform that will support their move to remote PHY and remote MACPHY networks.

The first entry for the company’s platform, marketed under the GigaWave brand, is the Digital Link Extender 40 (DLX40). The 1-rack-unit DLX supports two DLX40 modules, with each capable of aggregating up to 40 wavelengths across optical access links of up to 60 kilometers in length, ATX Networks said.

ATX, which introduced the new line amid this week’s AngaCom show in Germany, believes its approach with digital optical technology will fit in with cable’s pivot to distributed access systems that aim to create more capacity, reduce headend space and power requirements, while also supporting the growing need for those networks to backhaul mobile and wireless small cells for today’s 4G networks and the 5G networks of the future. The move to distributed access also fits in with future Full Duplex DOCSIS networks that will support multi-gigabit symmetrical speeds.

RELATED: Full Duplex DOCSIS Interop Testing on the Horizon

ATX says its new lineup will help MSOs evolve analog networks to digital and help to underpin the move to software-defined, virtualized distributed access architectures, Charlie Vogt, ATX Networks’s recently named president and CEO, explained. He said a portion of the work partially stems from ATX’s acquisition of InnoTrans.

RELATED: Charlie Vogt Named President, CEO of ATX Networks

ATX said a “marquee MSO” in North American has selected GigaWave DLX as a component of its next-gen distributed access architecture (DAA) initiative. The MSO wasn’t named, but deployments are slated to start this fall, the company said.

“We’re seeing a lot of RFPs and RFIs coming out” for DAA projects, Vogt said.

ATX is also developing a next-gen, “universal” node for DAA and Remote PHY and Remote MACPHY environments.

ATX’s new GigaWave products will be designed to work with those nodes as well as remote PHY nodes developed by other suppliers. 

Blue Ridge Communications said it has completed a 12-month project to bring 1-Gig speeds (in the downstream direction) across its service footprint.

Blue Ridge brands its 1-Gig residential service as Dream Gig (the tier delivers up to 1 Gbps downstream, and up to 40 Mbps in the upstream).

For the consumer premises equipment piece of the 1-Gig service, Blue Ridge confirmed that it using Technicolor’s TC4400 DOCSIS 3.1 modem and Arris’s TM3402 eMTA, a DOCSIS 3.1 device with a modem and two voice ports. Blue Ridge also offers a premium whole-home WiFi product, called HomeFi, in partnership with eero.

Per pricing details on the Blue Ridge web site, the MSO offers the standalone version of the 1-Gig tier for $144.95 per month, and discounts when it is bundled with pay TV -- $129.95 per month for subs on Blue Ridge’s Basic+ service, and $135.95 per month on its Broadcast Basic TV offering.

Blue Ridge’s Dream Gig tier has a monthly data allowance of 2 Terabytes. If that limit is exceeded, subs are charged $10 per bucket of 50 gigabytes of data.

Blue Ridge serves parts of northeastern and southeastern Pennsylvania.

Englewood, Colo. – Full-fledged deployments of Full Duplex (FDX) DOCSIS are likely still a couple of years away, but CableLabs believes that suppliers have made enough progress to be ready for initial interoperability testing later this year.

Interops are expected to underway in earnest in 2019, but the start of that work could get underway by the fourth quarter of 2018, Doug Jones, principal architect at CableLabs, said here Wednesday (June 6) at an operations roundtable that was part of the Rocky Mountain SCTE Chapter’s 23rd annual Engineering Symposium. 

That work will help to establish important groundwork on product interoperability for FDX DOCSIS, an annex to the DOCSIS 3.1 specs that will support symmetrical multi-gigabit speeds on widely deployed hybrid fiber/coax (HFC) networks.

CableLabs released the physical layer specs for FDX DOCSIS last fall, and followed with the addition of MAC Layer support in January.

RELATED: Full Duplex DOCSIS Takes Another Step Forward

Though the prescribed path to FDX DOCSIS involved a node-plus-zero network (the creation of a passive network whereby there are no amplifiers between the node and the home), CableLabs is also working on other approaches that won’t necessarily require N+0 to get MSOs started on that path, Jones noted.

CableLabs, he explained, is building a plan based on a node-plus-five environment. “We’re going to prove that FDX equipment will work on that, as a path toward FDX DOCSIS and get you that 1-Gig symmetrical tier maybe without having to go node-plus-zero first,” Jones said.

Having some flexibility is important because HFC networks are far from uniform between cable operators and even inside the operators themselves. Some have segments of the network at node-plus-15 and others at node-plus-zero, and everything in between.

And there are major business decisions to consider with moving to N+0.

“There’s a big battle that exists out there on cost that’s going to keep thwarting node-plus-zero for a while,” said Tom Gorman, the founder and president of opXL, and a cable engineering exec late of operators such as Comcast and Charter Communications.

By way of example, he said some plant extensions still require an amplifier to boost the signal.

“There’s got to be a very concerted effort and plan and willingness to spend to get to that node-plus-zero [architecture],” Gorman said. “There’s still a lot of work to be done there.”

And as cable operators take fiber deeper into the network, Gorman warned that they must be careful to ensure that their workforces continue to support technicians who know their way around coax.

“We’re finding that there’s not enough people to splice coax,” Gorman said. “The coax splicing is becoming the dying art, and [cable operators] still have a ton of coax out there. That’s where there’s a hole that’s getting bigger and bigger.”

The panel, moderated by Leslie Ellis, president of EllisEdits and a Multichannel News contributor, also touched cable’s role with 5G, and how MSOs can participate in that evolution amid the move to a standard that will deliver higher speeds and lower latencies and will be enabled in part by small cells that can be backhauled by cable’s widely deployed HFC plant and growing fiber networks.

RELATED: Cable is Wired for 5G

Cable’s move to FDX DOCSIS and distributed access architectures make HFC suitable for dense, 5G microcells, Dan Rice, vice president of HFC architecture at Comcast, said.

“All [telecom companies] are headed to the same spot, with fiber to remote nodes and physical layers out in the node, he said.

RELATED: Need to Know: 5G-Riding Wireless’s Next Wave

Gorman added that future 5G applications such as low-latency connectivity for autonomous vehicles, will present new challenges and opportunities for the cable industry.

Cable will need to focus the accuracy, reliably and availability of those 5G networks.

“The applications for [5G] will be lifeline applications, and it just makes our plant reliability all the more important,” Gorman said. “This is critical stuff we’re talking about beyond that 5G can deliver more bandwidth wirelessly.”

More details from this panel, including cable’s work with Full Duplex DOCSIS and the emerging use of machine learning for cable network operations will be featured in the June 11 issue of Broadcasting & Cable. 

Comcast has launched 1-Gig (downstream) residential and business services using DOCSIS 3.1 in a handful of additional markets – Mobile, Ala.; Jackson, Miss.; and Houma, LaPlace, Shreveport and Monroe, La.

Those launches, which follow recent debuts in several northeastern U.S. systems, get Comcast a few steps closer to completing its plan to complete the rollout of DOCSIS 3.1 across the vast majority of its markets by the end of 2018.

Among the newly launched markets, Comcast’s “everyday price” for residential 1 Gbps service via DOCSIS 3.1 in Mobile is $139.95 per month without a term contract. Pricing varies when the service is bundled with other Comcast products. In other markets, Comcast has been selling 1-Gig for $104.95 per month without a contract, and $89.99 per month (with a 12-month contract) under a promotional price.

For 1-Gig subs who take the device leasing route, Comcast is enabling D3.1 in the home using its xFi Advanced Gateway, a product formerly known as the XB3 that is also equipped with an 8x8 WiFi antenna array using 802.11ac version 2 and a set of IoT radios (Bluetooth LE, Zigbee and Thread). Comcast customers also have the option of buying D3.1-certified modems from suppliers such as Arris, Netgear, and Zoom/Motorola.

RELATED: Netgear DOCSIS 3.1 WiFi Router Combo Reach Retail

Comcast ended Q1 2018 with 24.21 million residential high-speed internet subscribers, but does not break down how many take the new 1 Gbps service.

However, Comcast, which ended Q1 with about 90% of its footprint upgraded for 1-Gig, has about 75% of its residential customers on speed tiers of 100 Mbps or more.

RELATED: Comcast Broadens DOCSIS 3.1 Rollout

Comcast also sells a symmetrical 2 Gbps service, called Gigabit Pro, that uses fiber-to-the-premises technology.

Arris’s Q1 results were a mixed bag as solid growth in its Network & Cloud and Enterprise segments arrived alongside a sales slowdown for both video and broadband consumer premises equipment (CPE).

Arris Q1 CPE sales were $875 million ($323 million for broadband devices and $552 million for video devices), down from $1.05 billion ($424 million for broadband devices and $631 million for video devices) in the year-ago period.

The decline in video set-top sales reflected the general softness of the pay market, while direct revenue contribution was impacted by both lower sales volumes and ongoing memory cost issues.

With that backdrop, Arris has already said it would be more selective with its set-top business and put more emphasis on profitability.

RELATED: Arris to Be ‘More Selective’ With Its Set-Top Box Business

Arris is also working with customers on pricing adjustments that reflect increased memory costs, but those benefits are expected to emerge in the second half of the year, Bruce McClelland, Arris’s CEO, said Tuesday on the earnings call.

The drop in broadband CPE sales was attributed to typical “seasonality” in Arris’s business alongside reduced purchases of DOCSIS 3.0 modems and gateways in anticipation of accelerating investments in DOCSIS 3.1 devices, McClelland said

He called that situation a “short-term blip,” noting that Arris will probably exit 2018 with 30% to 40% of cable broadband CPE being DOCSIS 3.1 devices, up from roughly 10% by the end of 2017.

“We expect momentum to return again this quarter as several new DOCSIS 3.1 products ramped up volume and we continue to anticipate a robust broadband CPE upgrade cycle tied to the customer migration to Gigabit services as we're seeing already in our Network & Cloud business,” he explained.

He said Arris expects CPE revenues to return to the “billion dollar range” in the second quarter.

However, “pressure on product cost has not abated, with memory prices continuing to increase and lead times and availability of other components becoming more challenging,” McClelland said.

On the network side, Arris saw strong sales for its E6000 converged cable access platform as MSOs bought into Gen 2 line cards that more than double capacity. Q1 revenues for Arris's Network & Cloud segment were $536.3 million, up 25% year-over-year. 

“We were a little surprised by the strength of the DOCSIS 3.1 capacity purchases this quarter as we'd expected some of this demand later in the year,” McClelland said.

Arris’s new Enterprise business, driven by its acquisition of Ruckus Wireless, came in at a higher than expected $170 million in the quarter.

McClelland said Ruckus Networks has more than 20 technology and operational trials using the CBRS 3.5 GHz band, a slice of shared spectrum that's expected to factor heavily into cable’s future mobile and wireless strategies.

RELATED: Comcast Wants to Test CBRS in Philly

Another bright spot was international sales, which grew 30% year-on-year, a contributed 43% to Arris’s overall revenue in Q1.

Overall Q1 sales were $1.57 billion, down from $1.48 billion in the year-ago quarter and below Wall Street consensus of $1.6 billion, but in line with company guidance. 

Arris ended the quarter with $543 million of cash resources, up from $511 million at the end of 2017.

Arris expects Q2 sales in the range of $1.76 billion to $1.81 billion, reflecting an expected rise in CPE sales, and full-year 2018 revenues of $7.1 billion to $7.3 billion. 

Raymond James analyst Simon Leopold reiterated his “Strong Buy” on Arris stock and a target price of $37 per share. 

In anticipation of the commercial launch of its mobile product, Charter Communications recently kicked off a field trial with 5,000 employees, with plans to have them go through the end-to-end sales activation and service process in May, Charter chairman and CEO Tom Rutledge said Friday on the company’s Q1 call.

Charter is also in the process of building out its sales channels and service capabilities for the coming product, a project that includes modifying several hundred of its retail stores and preparing its call centers.

Rutledge said Charter is likewise on track to launch the offering, which will be called Spectrum Mobile and lean on an MVNO deal with Verizon Wireless, around mid-2018.

Charter has not announced specifics on how it will price and sell its new mobile product, which will also take advantage of Charter’s WiFi infrastructure.

“Ultimately, the goal is to use our mobile service to attract and retain cable bundled, multi-product customers,” he said.

Rutledge also said the 50/50 joint venture with Comcast focused on the mobile backoffice platform and operations will help Charter accelerate its ability to scale its mobile offering.

RELATED: Comcast, Charter Form Mobile Platform Partnership

He also reiterated Charter’s plan to underpin the company’s wireless/mobile effort using a mix of licensed and unlicensed spectrum, including millimeter wave spectrum in the neighborhood of 28 GHz as well as the emerging shared spectrum CBRS 3.5 GHz band.

RELATED: Charter Sees Potential Compromise on CBRS License Areas

Rutledge estimated that Charter has about 250 million authenticated wireless devices connected to its network of 25 million small cells.

RELATED: Small Cells to Play Big Role in Charter’s Mobile Future

Charter didn’t outline specific EBITA losses it will absorb from the mobile services rollout, but using those at Comcast is “as a proxy as good as any at this point,” Charter CFO Chris Winfrey, said.

Comcast’s Xfinity Mobile business generated an EBIDTA loss of $189 million in Q1.

RELATED: Comcast Adds 197K Xfinity Mobile Customer Lines in Q1

“The biggest driver there is the level of subscriber acquisition…there’s a lot of upfront subscriber acquisition costs,” Winfrey said. “Once you get to a steady year state growth the business not only has a positive EBIDTA, but a positive free cash flow contribution on a stand-alone basis. So the faster we grow, the more short-term pressure we put onto EBITDA and free cash flow."

Though pricing and packaging and marketing of their respective mobile products will differ, Charter also sees the J.V. with Comcast as a reducer of operating costs.

“The impact is driven by the speed at which we roll the business out and how successful we are in the market,” Rutledge added.

Moving to broadband, about 25% of Charter’s customer base gets minimum downstream speeds of 200 Mbps, and DOCSIS 3.1, along with 1-Gig services, is deployed to about 43% of that footprint. Charter expects to wrap its network deployment of D3.1 by year end.

RELATED: Charter Brings Spectrum Internet Gig Service to 14M More Homes

Charter capex spending rose $628 million year-over-year, to $2.18 billion, driven by an all-digital transition that requires the purchase and rollout of new two-way set-tops and other consumer premises equipment. Just $17 million of capex in Q1 was mobile-related. Charter expects cable capital intensity this year to be a bit lower than 2017, however.

Rutledge said Charter expects to be wholly-digitized by year and as it completes the process in legacy Time Warner Cable and Bright House Network areas. 

Charter Communications announced that it has expanded the rollout of DOCSIS 3.1 and 1-Gig (downstream) broadband speeds to an additional 14 million homes in cities such as Los Angeles, Dallas and Milwaukee.

The additions extend the reach of Charter’s D3.1 rollout and Spectrum Internet Gig service to about 23 million homes.

Charter plans to offer gigabit service to virtually all of its full 41-state footprint by the end of 2018.

Charter first introduced Spectrum Internet Gig to customers in Oahu, then added Austin, Texas; Charlotte, N.C.; Cincinnati; Honolulu; Kansas City, Mo; New York City; Raleigh-Durham, N.C.; and San Antonio by the end of 2017.

RELATED: Charter Rolls DOCSIS 3.1 to Seven More Markets

In that early phase of the launch, Charter has been offering the new data cap-free offering, which pairs a downstream that maxes at 1 Gbps with an upstream up to 35 Mbps, for $104.99 per month to new customers. In markets such as Oahu, Charter has been offering it to existing customers with TV service for $114.99 per month, and $124.99 per month without the TV service bundle.

In D3.1-enabled markets, Charter has also been doubling its minimum downstream internet speeds (to 100 Mbps or 200 Mbps, depending on the market) at no added cost.

Charter ended 2017 with 49.82 million internet homes passed, and 22.54 million residential high-speed internet customers. Charter is scheduled to release Q1 2018 results on Friday morning (April 27).

“Spectrum’s state-of-the-art, fiber-rich network allows us to deploy dramatically faster broadband speeds, including gigabit connections, broadly and rapidly,” Tom Rutledge, Charter’s chairman and CEO, said in a statement. “As consumer demands for bandwidth and capacity grow, our world-class network is best-positioned to meet these demands, today and into the future.”

Charter also released this video about its deployment:

Comcast said Xfinity Mobile added 197,000 customer lines in Q1 2018, ending the period with about 577,000.

Those Q1 additions were just a tick ahead of the 187,000 lines that Xfinity Mobile tacked on in the previous quarter. Comcast launched the mobile service last May using its MVNO agreement with Verizon Wireless.

RELATED: Despite Video Losses, Comcast Has Strong Q1

Comcast said it’s happy with the results so far as it weaves Xfinity Mobile into its broadband service bundling strategy.

“We think Xfinity Mobile is a big opportunity to continue to drive the bundling strategy of the cable business and provide more value to our broadband customer,” Michael Cavanagh, Comcast’s senior EVP and CFO, said.

Xfinity Mobile also generated an EBIDTA loss of $189 million in the quarter as the company ramped up subscriber acquisition activities and absorbed other costs associated with getting the new business launched.

Cavanagh noted that those EBIDTA losses are in-line with guidance, adding that Comcast expects them to “be a few hundred more this year.”

At the same time, Comcast expects to get some benefits from the 50/50 mobile operations partnership formed with Charter, as both MSOs will bear those costs together as they scale up that business.

RELATED: Comcast, Charter Form Mobile Platform Partnership

Dave Watson, Comcast Cable’s president and CEO, said the partnership and its focus on backoffice operations is “critical” to how that business scales, and that it represents a “logical next step,” given the amount of alignment to how Comcast and Charter are looking at the mobile business.

“It’s relatively early, but we like the early trajectory” of the Xfinity Mobile business, Watson said.

RELATED: Xfinity Mobile Launches Bring Your Own Device Option

Though the rate of broadband subscriber growth is starting to slow, Comcast remains confident that its mix of speed, coverage and service control elements (such as its relatively new xFi offering) will enable it to take share.

Cavanagh said 75% of Comcast’s residential high-speed internet subs take speeds of 75 Mbps (downstream) or higher, and that Comcast has 1-gig services available to 90% of its footprint amid its ongoing deployment of DOCSIS 3.1

A sore point for Comcast and other cable operators continues to be the slow erosion of the pay TV subscriber base.

Comcast is trying to address that trend by segmenting the market with new skinny TV services, such as the new Xfinity Instant TV, but will continue to lead with its flagship X1 service, which is now taken by about 61% of Comcast’s residential video sub base and continues to integrate and aggregate OTT services such as YouTube, Netflix and Pandora and support other Comcast services such as Xfinity Home.

RELATED: Comcast Rolls Out ‘Xfinity Instant TV’ Beta

“We have pivoted X1 to be a whole-home platform that aggregates the best content, not just linear TV,” Brian Roberts, Comcast Corp.’s chairman and CEO, said, noting that it also serves as a “dashboard” for WiFi connect and home automation.

“It’s still early for Instant TV,” Watson said. But as virtual MVPDs start to build scale and add subscribers, Comcast has a “real opportunity to win them back,” he added.

Comcast said cable capital expenditures were down 5.2%, to $1.7 billion, reflecting a lower level of spending on consumer premises equipment (CPE), particularly for X1.

Looking ahead, Comcast expects to shift further away from video-centric CPE and more towards connectivity-driven broadband infrastructure spending, Cavanagh said.

Comcast’s rollout of DOCSIS 3.1-based gigabit broadband services has reached several markets in the northeastern U.S. as the cable operator pursues its plan to wrap up its D3.1 deployment by year-end.

The latest round of deployments include parts of Vermont, including Berlin Bethel, and Greensboro; Central Pennsylvania, including Lancaster County, Berks County, and Franklin County; and parts of Connecticut, including Danbury, Waterbury, Hartford, West Haven and Windsor.

Update: The latest rollout also includes residential and business customers in Western Pennsylvania and areas in northern West Virginia and Maryland, and follows launches last year in greater Pittsburgh and Morgantown, W.V. Areas tied into this D3.1 expansion includes Westmoreland County, the Alle-Kiski Valley, Armstrong County, the Dubois area, Elk County, and Indiana County; in Western Pennsylvania; West Virginia (including Monongalia, Marion and Taylor counties); and Maryland (Accident, Friendsville, McHenry and Blakeslee. 

Pricing of the 1-Gig (downstream) DOCSIS 3.1 service tends to vary a bit by market, but in Central Pennsylvania, for example, the “everyday” price for the residential offering is $104.95 per month without a contract, and is also being sold for the promotional price of $89.99 per month (with a 12-month contract).     

For the D3.1 rollout, Comcast is leaning on the xFi Advanced Gateway. That device, formerly known as the XB6, is also equipped with an 8x8 WiFi antenna array that uses 802.11ac version 2 and a set of IoT radios (Bluetooth LE, Zigbee and Thread).

RELATED: Comcast Taps Arris, Technicolor for ‘XB6’ Gateways: Sources

Comcast is also offering D3.1-based services to business customers.

Comcast ended 2017 23.86 million residential high-speed internet subscribers, but does not break down how many take the new 1 Gbps service or its other speed tiers.

RELATED: Comcast Broadens DOCSIS 3.1 Rollout

Comcast ended 2017 with about 80% of its footprint upgraded to D3.1, and expects to complete the rollout by the end of 2018.

Comcast also sells a symmetrical 2 Gbps service, called Gigabit Pro, that uses fiber-to-the-premises technology.

Cable MSOs sit in one of the more disrupted spots in the communications industry. By disrupted, we mean the easily changeable nature of customer loyalty, as consumers react to a less-than-perfect experience and the growing influence of other communications entities trying to acquire those customers. 

Consumers these days are increasingly willing to cut the cord and migrate to less-expensive streaming alternatives such as Roku, Google Chromecast and Apple TV. Leichtman Research Group data shows the clear reason why. An annual survey of TV households shows the average cable bill rose about 39% from 2011 to 2015, which is almost eight times the rate of inflation. The most recent cable bill average is now over $103 per month, with zero chance of that price remaining flat going into the next year.

Threats on Multiple Fronts

Bill sticker shock notwithstanding, cable providers must now face the new challenge of the eventual introduction of 5G networks delivering Gigabit performance, new fixed wireless access options and yet another unique ability to create a bundled offering that displaces the cable provider completely. Can you blame a customer with a high bill for looking at other options, especially from companies that can bundle services together just as well?

Cable MSOs have thus been forced to reshape their businesses, with much of that coming in the form of a complete digital transformation of infrastructure, and processes that help meet the expectations of consumers and business customers. Today’s cable networks have brought broadband access to households that now have become accustomed to HD and 4K video services and internet speeds of 100 Megabits per second-plus. Over the next few years, we can expect further digital transformation in the form of hybrid networks that provide higher capacity, less risk of delay or latency, lower power consumption and hopefully the ability to satisfy the end users’ demand for service at a price point that doesn’t increase the rate of cord-cutting.

With demand for internet bandwidth continuing to grow at more than 20% per year thanks to video streaming, enterprise cloud computing, big data, social media and mobile data delivery, meeting these demands must be cost-efficient, energy-efficient and reliable.

As we watch top-tier cable providers invest in fiber-to-the-home deployments, cable’s traditional fiber-coaxial networks will still provide the anchor points for service evolution and transformation, and will still have the capability to roll out new services, as ongoing investment has already been able to deliver more bandwidth.

Ongoing investments in the Converged Cable Access Platform (CCAP) and DOCSIS 3.1 have benefited the customer, with bandwidth performance metrics showing upwards of 10 Gbps downstream and 1 Gbps upstream. The embrace of CCAP has the transformative effect of increasing business agility, forging a smaller footprint, and creating lower power consumption and more IP video capability, giving the user more capabilities and enhanced security — all of which should help reduce total cost of ownership as a whole.

As SDN/NFV (software-defined networking/network functions virtualization) becomes a greater influence on the cable provider, one cannot discount the existing expectations and needs for what will be a hybrid network environment in the short to medium term. Cable providers will thus have physical and virtual functionality evolving in parallel. This, along with investments in remote PHY, which supports both FTTx (fiber to the x) and SDN/NFV initiatives, all contribute to the digital transformation around an IP network between the core and the node. The move to a virtualized, software-based architecture can help deliver network optimization, increase agility and create new opportunities for MSOs. However, any cable operator planning to reap the benefits from NFV and SDN must shift its focus from technology to business, and ensure all business support systems are up to the task. As a wise man once said, if you can’t bill for it, it’s a charity.

Virtualization Hits Home

Network-level virtualization will also transfer to the home, as we already see services move from a physical set-top box environment to an eventual virtual one. The $400-plus set-top box with a hard drive is set to be replaced by a cloud-based DVR that sources not just content, but applications such as program guides and DVR as cloud-based functions.

Cable MSOs will no longer be limited by the functionality of a dedicated set-top box and will make gains from much faster time to market for new products and services offered both from within and outside the cable provider. How about that customer call requiring a $100-plus truck roll to correct an issue that may or may not exist? It can likely be mitigated by a remote software update. What about replacing that $400 set-top box every three years or so? Virtual CPE means a $50 dumb box in the home can extract value from the cloud and be easily updated and configured on the fly and extends the life of home-based equipment. Analytics can also now be embedded in the cloud for easier data management and decision-making.

Can we calculate a long-term price for all of this digital transformation? For the cable provider, it means more innovation, faster delivery of new digital services and a much “stickier” service environment to demonstrate to the customer that all this innovation is actually worth paying for. That translates to retention.

And let’s face it: If cable bills aren’t going down any time soon, creating a product and service advantage will be a paramount requirement for the industry in the coming years.

Paul Hughes is director of strategy at Netcracker Technology.

Continuing a march toward its goal of completing its DOCSIS 3.1 rollout by the end of the year, Comcast is gearing up to launch residential and business 1 Gbps (downstream) broadband service to several markets in its southern regions.

Set for a late April launch, the latest batch of markets to get D3.1-based services include Charleston, S.C.; Memphis, Tenn.; Savannah, Ga.; and Corinth and Hattiesburg, Miss.

Comcast has centered its D3.1 rollout on the xFi Advanced Gateway, formerly known as the XB6. That device is also equipped with an 8x8 WiFi antenna array that uses 802.11ac version 2 and a set of IoT radios (Bluetooth LE, Zigbee and Thread).

RELATED: Comcast Taps Arris, Technicolor for ‘XB6’ Gateways: Sources

Comcast ended 2017 with about 80% of its footprint upgraded to D3.1, and plans to complete the rollout by the end of 2018.

Per its rollout plan, markets and areas still left include Connecticut, western Massachusetts; Scranton, Pa.; and west Virginia.

Update: In the new D3.1 markets, Comcast initially will be selling the residential 1-Gig service for $139.95 per month. 

In some of its earlier D3.1 launches, Comcast has been selling residential 1 Gig (paired with an upstream that maxes at 35 Mbps) for $159.95 per month without a contract and, for a limited time, is offering it to new high-speed internet subscribers for $89.99 per month, with a one-year agreement. Pricing for current customers with a contract will vary.  

Comcast also sells a symmetrical 2 Gbps service, called Gigabit Pro, that uses fiber-to-the-premises technology.

Following its recent acquisition of Ruckus Wireless, a move that enhanced Arris's focus on the wireless and enterprise sectors, Arris will continue to seek out deals that can broaden its addressable market.

That means it won’t be going off on any wild tangents but rather stick to its new knitting, which is all about providing connectivity – wired and wireless – to consumers and businesses.

With regard to future M&A, “We’re looking for opportunities that are near-adjacencies to what we’ve in today, things that logically build on top of the businesses that we’re in, so it’s easier to get synergies,” Arris CEO Bruce McClelland said Wednesday on the company’s investor day, held in New York. “One-plus-one equals more than two…We’re looking at things that are accretive to the business going forward.”

“I really believe that M&A is a core part of what we need to do,” Dave Potts, Arris’s EVP and CTO, added later. “I think it is a place that we will want to continue to try to put dollars to work.”

McClelland didn’t identify any specific companies on Arris’s M&A radar, but did spell out some areas that would qualify to be on it, including the enterprise sector, security, as well as opportunities to bolster its traditional infrastructure business, including wireless, transport and optical transmission.

But a primary focus of Arris’s capital strategy will be in R&D, which will grow to $700 million this year, thanks in part to the Ruckus acquisition. R&D is “really the fuel for the business…that’s the best possible use of cash in the business,” McClelland said.

Arris’s investor day spanned the scope of its business. Here’s a snapshot of some specific areas that were covered:

Waxing Wireless  

Starting with what Arris has with the new Ruckus Networks unit on board, the company plans to take advantage of a wireless LAN arena with a total addressable market of $15 to $17 billion and one that is growing at 8% to 10% a year.

Of note, the company is anticipating a transition to 802.11ax that will that will also create push to new edge campus switching technologies, and drive “secular upgrades” into product areas that Ruckus has covered, Dan Rabinovitsj, president of Arris Enterprise Networks, said.

Arris, through Ruckus Networks, is also getting positioned for the needs of the enterprise Internet of Things market, as well as opportunities that will come way of CBRS, a swath of shared spectrum in the 3.5GHz band that will be used by incumbents as well as for unlicensed and lightly licensed use by others, including cable operators.

RELATED: Ruckus Gears Up for the CBRS Band

For enterprise IoT, Ruckus plan centers on consolidating the physical layer access networks into a unified IoT network using access points with IoT modules that can support a fragmented group of standards and technologies, including Bluetooth Low Energy, Zigbee and LoRA.

“This fragmentation has been a huge problem,” Rabinovitsj said. “We’re PHY-agnostic…we have zero religion about this.”

He said Apple and others are remedying this issue in the consumer sphere by building their own technology silos. But that approach won’t fly with enterprise customers, he said.

Steve Martin, Ruckus’s CTO, expanded on the CBRS initiative at the company, noting that the shared spectrum approach in the 3.5GHz band represents a “breakthrough,” and a significant opportunity.

“Spectrum is like beachfront property…they’re not making any more of it,” he said.

RELATED: Comcast Wants to Test CBRS in Philly

The CBRS opportunity, which will use spectrum allocation servers to keep users in that band from interfering with each other, has drawn interest from a wide range of segments, including cable operators that view it as a way to augment mobile service that are leaning on MVNO agreements.

RELATED: CBRS Spectrum to Open Windows of Opportunity for Cable Ops

“The trials are getting bigger and more sophisticated,” he added, noting the largest one spans some 90 nodes covering both indoor and outdoor locations across multiple city blocks.

“This stuff is real,” he said. “Frankly our pipeline is limited by our ability to handle the trial requests at this point, so we're being very opportunistic about it.”

The Drive Toward Distributed Access

A portion of Arris’s discussion about what’s going on in the wired part of the network centered on cable’s push toward distributed access architectures (DAA), which push functions and electronics further out on the network and into the node.

RELATED: Cable Industry Preps Push to Next-Gen Access Networks, Virtualization

As a sign of momentum there, Arris announced today that Danish service provider Stofa has launched what’s being billed as Europe’s first Gigabit internet service based on the remote PHY spec. To enable it Stofa is using Arris’s flagship CCAP, the E6000, with a software upgrade that pairs with the vendor’s NC2000 R-PHY optical nodes.

The move to DAA also gets cable operators into the world of digital optics, which opens to door to new competitors that want to jump into the investment cycle to come.

“Who knew that HFC was cool again?” McClelland joked. “It will be competitive. There are lots of people who would like a piece of that, and it’s going to grow over time. I would rather be where we are than where everybody else is." 

On Arris’s consumer premises equipment (CPE) side of the house, share has been gradually shifting more heavily toward broadband devices – the currently mix is still dominated by video (60%) as broadband (40%) continues to close the gap.

Larry Robinson, president of Arris's CPE business, reiterated that, for set-tops, the company will try to grow share selectively with an emphasis on margin and a continued pursuit of cost-reduction programs as rising memory costs remain an issue.

RELATED: Arris to Be ‘More Selective’ With Its Set-Top Box Business

There’s a “maniacal focus on streamlining business operations,” Robinson said.

As for trends, Robinson said integration of 4K and HDR technologies are part of the evolution, as well as voice-based navigation, and whole-home WiFi capabilities. There’s also an opportunity emerging to build far-field microphones into traditional CPE products as ambient voice capabilities become a more important component of smart home solutions.

“There’s even talk of 8K,” driving a number of new use cases for video, Robinson said. However, 8K currently is “off the charts in terms of price.”

On the broadband side, about 10% of Arris’s CPE for cable operators re DOCSIS 3.1, and Arris sees that rising to the 75% to 80% range in 2021.

Cable One said it is laying the groundwork for 1 Gig speeds in NewWave Communications systems acquired last year that added about 214,000 residential primary service units, a unit that includes video, voice and broadband, to its base.

RELATED: Cable One to Buy NewWave for $735M

To get ready for the 1-Gig launch, Cable One said it is in the process of supporting 32-channel bonding in the NewWave markets, which parts of Arkansas, Illinois, Indiana, Louisiana, Mississippi, Missouri and Texas. Cable One said it plans to invest up to $60 million over three years on network upgrades and other enhancements in the NewWave markets.

About 95% of Cable One’s legacy footprint has access to its GigaONE service, which uses DOCSIS 3.0 technology. Cable One has been selling that service, which pairs a downstream of up to 1 Gbps with a 50 Mbps upstream capability, for $175 per month.

RELATED: Cable One Touts Gigabit Deployment Milestone

Cable One didn’t announce a specific timetable for 1-Gig launches in the NewWave systems, but said it has already been doubling available speeds in the majority of those markets, offering downstream speeds up to 200 Mbps.

“As customers continue to stream, download, and connect across multiple devices in their homes, we know that speed is key in satisfying this growing demand,” Julie Seff, vice president of residential services for Cable One, said in a statement. “Doubling speeds as well as launching Gigabit service will create more customer value and provide a superior high-speed internet experience for our customers.”

After going public late last year, Casa Systems, a maker of cable and wireless network gear and software, said Q4 2017 revenues rose 18.9%, to $118 million, driven largely by software-based capacity expansions by cable operators.

RELATED: Casa Systems Shrinks IPO Size to 6M Shares at $13 Each

That was paired with GAAP net income of $28.9 million, down 27.6% versus the year-ago quarter.

For the full year, revenues rose 11.2%, to $351.6 million.

Though new wireless opportunities are starting to kick in, cable’s move to DOCSIS 3.1 to deliver gigabit-class speeds remains a key growth driver at Casa, company president and CEO Jerry Guo said Tuesday on the earnings call.

And while some operators, such as Comcast and WideOpenWest and Mediacom Communications, have moved aggressively with D3.1, Casa expects deployments to ramp up this year and into 2019.

Cable is generally at the “initial stage” of D3.1, Guo said, adding that there’s “a lot more to come.”

Though integrated Converged Cable Access Platform (CCAP) products have plenty of legs left, he also sees cable’s ramp toward distributed access architectures ramping up in 2019 and beyond.

RELATED: Ramping Up for Remote PHY

Casa also talked up its ongoing move into wireless – including a focus on 4G, small cells and cellular IoT cores -- recalling recently announced wins with Telefonica (for its 4G Apex Small Cells and small cell management platform); and with China Mobile and Sprint, which are both using Casa’s Axyom Small Cell Core product.

Casa said it expects revenues for fiscal year 2018 to be in the range of $380 million to $395 million, with non-GAAP net income of between $100 million to $111 million.

Some of Casa other known customers include Charter Communications (coming way primarily from Charter’s  acquisition of Time Warner Cable), Rogers Communications and Mediacom Communications in North America; Televisa/IZZI Mexico and Megacable Mexico; Claro Telmex Columbia; Liberty Global, Vodafone and DNA Oyj; and Jupiter Communications and Beijing Gehua CATV Networks in the Asia Pacific region.

Update: Via Twitter, Jeff Heynen, consulting director at SNL Kagan, noted that Casa’s turning in of a solid Q4 wasn’t a surprise, but wondered if Casa could maintain consistency throughout the year: 

Casa has historically had strong Q4s. The big question is whether the revenue troughs in subsequent quarters can be minimized. https://t.co/QyEjkbBGGs

— Jeff Heynen (@jeffheynen) March 7, 2018

Raymond James analyst Simon Leopold maintained his “Outperform” rating on Casa following its Q4 results, noting that the numbers exceeded expectations (sales of $118 million beat Wall Street consensus of $101.4 million), and Casa's 2018 forecast was a bit better than consensus.

“We expected seasonal strength in the software portion of Casa's business, which largely stems from capacity additions, but the results were well ahead of expectations at $50 million vs. our $38 million estimate,” he wrote, adding that the favorable mix fueled the gross margin to 77.1%, above his expectation of 69.9% and the Street's expectation of 68.5%.

With the latest batch of DOCSIS 3.1 deployments factored in, WideOpenWest said its 1 Gbps (downstream) broadband service is now available to more than 95% of its customers.

The milestone follows a pledge last November that WOW would wrap up its D3.1 deployment for residential and business customers by Q1 2018

RELATED: WOW! Nears DOCSIS 3.1 Finish Line

WOW! said it has introduced 1-Gig service to nine markets, including Cleveland, Ohio; Charleston, S.C., and Pinellas, Fla., along with Columbus, Ga., and “large portions” of Huntsville and Montgomery, Ala.

WOW! has been rolling out its uncapped 1-Gig service on HFC using DOCSIS 3.1 and the Arris E6000 converged cable access platform, but is also starting to use a new virtualized Distributed Access platform from Nokia as the operator looks to mine more capacity from its HFC network in certain scenarios. 

RELATED: WOW! Rolls with Nokia's Distributed Access Platform 

WOW! has been selling the 1-Gig residential service (paired with an upstream of 50 Mbps) for $79.99 per month as a stand-alone with a two-year contract, or $89.99 per month without a contract. WOW!’s 1-Gig service comes at lower prices when bundled with other WOW services.

WOW!, a competitive cable operator with about 3.09 million homes passed, ended Q3 2017 with 730,000 high-speed internet subscribers.

“Almost every household and business is connecting more devices and using more data today than they did even one year ago,” Teresa Elder, CEO of WOW!, said in a statement. “As Internet-connected devices and appliances continue to proliferate, our 1 Gig Internet service allows customers to browse, stream, game, and conduct business at the fastest speeds available.”

Comcast has completed the rollout of 1-Gig (downstream) service delivered via DOCSIS 3.1 to residential and business customers in the Greater Houston area.

The expansion in Houston follows recent D3.1 launches in markets such as Sacramento, Calif.,

Comcast ended 2017 with about 80% of its footprint upgraded to D3.1, and plans to complete the rollout by the end of 2018. Examples of Comcast markets where DOCSIS 3.1 launches are still upcoming include Vermont; Carmel, N.Y.; Scranton, Pa., Central Pennsylvania; and West Virginia. 

In Houston, similar to other D3.1 Comcast markets, the MSO is selling residential 1 Gig (paired with an upstream that maxes at 35 Mbps) for $159.95 per month without a contract and, for a limited time, is offering it to new high-speed internet subscribers for $89.99 per month, with a one-year agreement. Pricing for current customers with a contract will vary, Comcast noted.

For D3.1, Comcast is supporting service with its own xFi Advanced Gateway (formerly called the XB6) as well as approved D3.1 devices available for retail sale from Arris (Surfboard 8200), Netgear (CM1000 modem and C7800 wireless gateway), and Zoom/Motorola (MB8600 modem). 

RELATED: Netgear DOCSIS 3.1 WiFi Router Combo Reach Retail 

Arris turned in a generally solid Q4, but pressures being applied to its set-top business, driven in part by rising memory costs, is causing the company to adjust its strategy in a way that could have the company steering clear of less profitable opportunities.

“As we enter 2018, the team continues to sharpen the focus on enhancing economics within the CPE [consumer premises equipment] business, and we are taking a number of steps to improve efficiency,” Bruce McClelland, Arris’s CEO, said Wednesday on the company’s Q4 2017 earnings call.

One of those steps is to sell its set-top manufacturing facility in Taiwan to Pegatron. Once completed, Arris will be able to tap into Pegatron’s scale and supply chain, and yield an annual benefit of $20 million or more and lowering product costs, McClelland explained.

Arris is “in extensive discussions with customers to adjust pricing to reflect increased memory costs, and are being increasingly more selective on the projects that we pursue,” McClelland added, noting later that the adjusted selectivity will have Arris focus more on profitability than on sales growth.

That adjustment comes as video set-top sales in Q4 2017 declined 13% year-over-year amid lower volumes and the shift toward lighter-weight clients, trends that are emerging due to new gateway-client architectures and the expanding use of cloud DVR services.

McClelland said Arris expects the cost of memory to continue to be an issue for its CPE business, and is currently projecting another 10% increase in costs in 2018 relative to the fourth quarter of 2017.

“It’s a situation where we think we have to have these discussions with customers and find a path forward,” McClelland said. “It’s an extremely active dialogue across the board, and I think we'll be successful in finding a middle ground that works for everyone. If we can't on some pieces of business that just don’t look like they are long term the right place for us to be, I think you'll find us trim those out." 

Arris’s strategy to be more selective and focus on more profitable opportunities for its set-top box business is not out of the ordinary. Cisco Systems, which sold its CPE business to Technicolor in 2015, opted a couple of years earlier not to pursue business for low-margin set-top boxes, particularly in Europe.

On the positive side, McClelland said the upgrade cycle for boxes that support 4K video gained momentum in 2017 and is expected to accelerate this year, citing Arris’s recently announced deal to provide 4K-ready boxes to Bell Canada.

RELATED: 4K-Ready Boxes From Arris Part of Bell Canada’s MediaFirst Move

But generally speaking, Arris expects sales from its CPE segment to shift toward a higher mix of broadband devices (the company anticipates CPE sales to be down 4% this year as it adjusts its operational efficiencies and focuses on profitability and price adjustments). 

McClelland said Arris will likely provide more perspective on that evolving mix during its investor conference, set for March 28 at The Westin New York at Times Square.

That shifting mix was reflected in Q4, as sales of broadband CPE in the period jumped 7% amid growing demand of advanced DOCSIS-based gateways. Of note, Arris shipped 1.6 million DOCSIS 3.1 units in 2017, representing a bit under 10% of total volume, McClelland said, adding later that D3.1 has begun to progress from trials to full-scale commercial deployments.

The challenge faced by Arris’s video set-top business was a relative blip when compared to just about every other aspect of its business.

Overall Q4 sales came in at $1.73 billion, on the high end of Arris’s guidance range, and close to expectations of about $1.74 billion.

Arris expects 2018 sales of $7.1 billion to $7.35 billion, and earnings per share of $2.80 and to $3.05. That compares with consensus of $7.26 billion and $2.92 EPS, according to Raymond James analyst Simon Leopold, who maintained a “Strong Buy” on the stock and a target of $36.

Q4 numbers included a month of enterprise sales coming way of Arris’s acquisition of the Ruckus Wireless and ICX Switch business from Broadcom, a deal that, for example, will help Arris chase down new opportunities in the emerging CBRS market.

RELATED: CBRS Spectrum to Open Windows of Opportunity for Cable Ops

For that CBRS LTE portfolio, Arris has an active pipeline with traditional wireless service providers, wireline providers expanding into wireless, enterprise customers what are looking to deploy private, secure LTE networks, as well as wireless ISPs. Use of 3.5GHz CBRS spectrum for initial commercial trials are expected to start later this year, McClelland said.

That business [Ruckus] “hit the ground running,” McClelland said.

Arris’s projected increase of 9% in sales this year includes expectations that the company’s new enterprise business represents an opportunity in the $650 million to $700 million range.

Arris’s Network and Cloud business, meanwhile, saw profitability rise in part due to continued sales of DOCSIS capacity licenses for its flagship converged cable access platform, the E6000. Shipment of “Gen2” modules for the E6000 also accelerated in the second half of the year.

RELATED: Arris Touts Deployments of ‘Gen 2’ Modules for Flagship CCAP

He also noted that a portion of revenue projected for 2018 includes projects involving the use of Remote PHY, an emerging architecture that distributes certain electronics further toward the edge of the network.

RELATED: Cable-Tec Expo: Arris Paves Path to Remote PHY

Deepening its view into next-gen cable access architectures, CableLabs has recently launched a working group focused on Remote MAC/PHY, an emerging approach for next-gen distributed converged cable access platform (CCAP) architectures.

“The scope of the work for Remote MAC/PHY…is in its early stages,” Jon Schnoor, lead architect at CableLabs, explained in this brief video that accompanied a blog post about the work. “We’ve just kicked off the program, so the working group is actually defining the type of work we’re going to do.”

CableLabs noted that the new Remote MACPHY working group is part of its Distributed CCAP Architecture (DCA) program, and is comprised of operators, equipment manufacturers, and CableLabs’ engineers.

The resulting work aims to develop one or more specs that enable Remote MAC/PHY products from multiple vendors to interoperate.

The greater focus on Remote MAC/PHY at CableLabs also comes amid recent activity centered on Remote PHY.

RELATED: Test Time for Remote PHY

Both efforts are tied into approaches that take and break down components and functions of the network and place them further toward the edge of the HFC network. A central idea of distributed access architectures are to enable cable operators to reduce power and space requirements of more centralized products that took hold in the first wave of deployments for CCAP, a high-density architecture that combine the functions of the edge QAM and the cable modem terminations system.

RELATED: Ramping Up for Remote PHY  

Cable operators are also looking for distributed access architecture to improve the fidelity of the outside plant and to help them drive more capacity for DOCSIS 3.1 and to set things up for Full Duplex DOCSIS, an annex for D3.1 that will support multi-gigabit symmetrical speeds.

Operators are weighing options whereby they would distribute just the PHY or both the MAC and the PHY, as the latter approach distributes more of the smarts of the network but costs a bit more power to pull off. Vendors such as Nokia are trying to end the debate with distributed approaches that use “universal” cable access nodes that can be configured (via software) to run as a Remote PHY device or a Remote MAC/PHY device.

RELATED: Nokia Touts Versatility for ‘Virtualized’ Distributed Platform for Cable Ops

Charter Communications continued to accelerate the rollout of its hybrid QAM/IP WorldBox platform as it also prepares to launch a mobile product that leans on its Verizon MVNO agreement by mid-2018.

Charter, which restarted its all-digital project last year, has deployed about 2 million WorldBox units so far, company chairman and CEO Tom Rutledge, said Friday on company’s Q4 2017 earnings call.

That about doubles the number of WorldBoxes that Charter had deployed at the end of the third quarter of 2017. In addition to supporting IP and QAM transport, Charter’s WorldBox also supports a cloud-based guide and a downloadable security platform that will enable it to work across Charter’s entire footprint, including systems obtained from the Time Warner Cable and Bright House Networks acquisitions.

RELATED: Charter Has Deployed 1 Million-Plus WorldBoxes

Following earlier work with vendors such as Cisco Systems and Humax, Charter has since tapped Arris for a WorldBox 2.0 project that is targeting devices that are cost-efficient than the predecessor WorldBox models.

Charter is also using cloud technology from ActiveVideo (now jointly owned by Charter and Arris) to bring its new Spectrum Guide to the WorldBox as well as older, non-IP boxes.

RELATED: Arris, Charter Close $135M ActiveVideo Acquisition

Rutledge said Charter expects to have Spectrum Guide available to virtually all its video customers by the end of 2018, including “mixed markets” like Los Angeles where legacy Charter systems are contiguous with legacy TWC systems. The expanded guide rollout will also expose those customers to Charter’s larger VOD library (about 50,000 HD titles).

Existing customers in those markets will, over time, have the choice to switch to the new Spectrum Guide using their remote control, Rutledge said.

He also reiterated a plan to integrate OTT services such as Netflix, viewing Spectrum Guide as a “"hub for accessing content that originates from us or from somewhere else." Those third-party apps will first be made available on the WorldBox and extend to older box types over time,” Rutledge said. Charter will also use ActiveVideo’s cloud technology to bring those apps to IP- and non-IP capable boxes.

Mobile Pricing Not Yet Set

Shifting to wireless, Charter’s goal with its new mobile product is to gain and retain more cable customers.  

“We haven’t decided how to price it,” Rutledge said. “But our long-run view on pricing is that we should offer a good value for high quality products and we should integrate that into our overall product packaging scenario." 

Perhaps an indication of what Charter is considering, Rutledge did heap some praise on Comcast’s rollout of Xfinity Mobile, which offers unlimited and by-the-Gig data options. “I think they did a really nice job with their pricing model,” he said.

RELATED: Xfinity Mobile Starting to See ‘Real Momentum’

Rutledge also expanded on Charter’s longer-term plan to use a mix of licensed and unlicensed spectrum.

Riffing on keynote comments he made last fall at the SCTE/ISBE Cable-Tec Expo in Denver, Rutledge again referred to it as “6G” – Charter’s tongue-in-cheek, pre-spec definition of the integration of small cell architecture using unlicensed and licensed spectrum working in tandem with its DOCSIS 3.1 rollout. 

“We expect that over time our existing infrastructure will put us in the unique position to economically deploy new, powerful products that benefit from small cell connectivity,” Rutledge said. "We may want to take additional licensed spectrum and combine with WiFi spectrum to create an even broader in-home, in-business and mobile platform." but he  stressed that there’s no plans currently to launch that in 2018 or 2019.

Rutledge also downplayed fixed 5G as a significant threat to cable’s broadband business, noting that those wireless networks will still need to be backed up with solid wired backhaul systems.

“I see all the same kind of costs necessary to build a 5G network as there is to build a wireline network, and maybe more,” he said.

As for DOCSIS 3.1, Charter plans to deploy that technology and enable 1 Gbps speeds (initially in the downstream) across its footprint and all 50 million passings by the end of 2018. Charter has deployed D3.1 to eight markets so far.

RELATED: Charter Rolls DOCSIS 3.1 to Seven More Markets

Charter has also started to make 200 Mbps its minimum speed in about 18% of its footprint, including systems in Hawaii, New York and Charlotte. Charter currently offers minimum speeds of at least 100 Mbps to 99% of its footprint, up from 50% in June of last year. 

But Charter, given some of the logistical issues with that (like modem transfers and the MSO’s ongoing all-digital upgrades), won’t yet commit on when 200 Mbps will be the minimum in all markets.

“We haven’t decided how fast we're going to go with that and how far we'll roll that out entirely this year,” Rutledge said.

Full Duplex DOCSIS (FDX), an extension to DOCSIS 3.1 that will enable symmetric multi-gigabit speeds, took another step forward following the addition of MAC Layer support, CableLabs announced Tuesday.

MAC Layer support arrives more than three months after CableLabs released the physical layer specs for FDX.

RELATED: Full Duplex DOCSIS Plows Ahead

The addition is focused on the MAC management messaging and operation needed to enable FDX between the cable modem termination system and the cable modem, and includes new processes such as sounding, echo cancellation training, and resource block assignment, Karthik Sundaresan, a principal architect at CableLabs, explained in this blog post.

Notably, an FDX-capable CMTS will receive and transmit in the same spectrum, while FDX modems can either receive or transmit in the same FDX spectrum. The FDX band, Sundaresan explained, is divided into sub-bands that the CMTS assigns which sub-band or sub-bands each modem uses for upstream or downstream operation.

Among the FDX processes, sounding is a method used to identify groups of cable modems, called Interference Groups, that would interfere with each other if they were allowed to transmit and receive at the same time in a specific sub-band. Those Interference Groups are then grouped into smaller Transmission Groups.

“The new FDX capability and functions are introduced as changes across the MULPI (MAC and Upper Layer Protocols Interface) specification and is now an official part of the specification,” Sundaresan explained. 

As the new FDX specs mature, CableLabs expects it will start to see products with that capability emerge over the next year as silicon is developed and built into product designs. Meanwhile, CableLabs will host a series of FDX interoperability events, with the first one slated for Feb. 5-9 in Louisville, Colo.

“These will start from basic node level echo cancellation and gradually progress into full-blown product interoperability,” Sundaresan wrote.

CableLabs is also working on OSS changes needed for FDX and has started work on changes required to support FDX when deployed with new remote PHY architectures (FDX assumes the use of a distributed, node-plus-zero architecture).

RELATED: Cable-Tec Expo: Gearing Up for Remote PHY

Some industry experts expect to see FDX trials get underway sometime this year and into 2019, with 2020 viewed as the technology’s first significant deployment year.

CableLabs introduced the concept in February 2016. Per the specs, the FDX band will reside between 108 MHz and 684 MHz (regardless of whether FDX channels occupy the whole band), so it’s possible for existing D3.1 modems to also use some spectrum set aside for D3.1.

WideOpenWest (WOW!) took a big step toward the finish line on its rollout of DOCSIS 3.1 with launches in several more markets.

The latest WOW! markets to join the D3.1 list include Panama City and Pinellas, Fla.; Chicago and Naperville, Ill; Cleveland and Columbus, Ohio; Charleston, S.C.; Augusta and West Point, Ga.; Valley, Ala.; and Detroit.

WOW! announced last November that it expected to wrap up its DOCSIS 3.1 deployments, which enable 1-Gbps broadband service (in the downstream direction) for both residential and business customers, to about 95% of its footprint by Q1 2018.

RELATED: WOW! to Complete 1-Gig Rollout in Q1 2018

WOW! initially launched the service in four markets in the fall of 2016 -- Auburn and Huntsville, Ala.; Evansville, Ind.; and Knoxville, Tenn., and has since followed with expansions into areas such as Grosse Point Shores, Mich.; and Marysville, Parma Heights, and North Ridgeville, Ohio.

WOW! expects to launch D3.1 in two more cities (likely sometime next month) and hit the 95% footprint deployment milestone, an official said.

The company has been rolling out 1-Gig service on HFC using DOCSIS 3.1 and the Arris E6000 converged cable access platform, but is also starting to use a new virtualized Distributed Access platform from Nokia as the operator looks to mine more capacity from its HFC network in certain scenarios. 

RELATED: WOW! Rolls with Nokia's Distributed Access Platform 

WOW! has been selling the 1-Gig residential service (paired with an upstream of 50 Mbps) for $79.99 per month as a stand-alone with a two-year contract, or $89.99 per month without a contract. WOW!’s 1-Gig service comes at lower prices when bundled with other WOW services. As an important differentiator, WOW’s gigabit offering is uncapped.

RELATED: WOW!: We’ll Stay Cap Free

It’s still early days, but Xfinity Mobile, a service launched by Comcast last May, is showing “real momentum,” Brian Roberts, Comcast’s chairman and CEO, said Wednesday on the company’s Q4 2017 earnings call.

Comcast added 187,000 Xfinity Mobile customer lines in Q4, ending 2017 with more than 380,000.

“We are enthusiastic about what’s coming in 2018,” Roberts said, noting that the product is now rolled out fully to Comcast’s retail stores and has introduced a bring-your-own-device option (initially for select iPhone models).

RELATED: Xfinity Mobile Launches Bring Your Own Device Option

“We’re really pleased with the early stage results” for Xfinity Mobile, Dave Watson, Comcast Cable’s president and CEO, said. “We like our game plan. We like the fact that it’s connected to our existing business lines. It’s a really simple approach that can scale.”

Though Comcast is starting to gain momentum with Xfinity Mobile subscribers, that part of the business is pulling in a profit due to costs tied to its scaling up phase. Xfinity Mobile generated a $480 million EBIDTA loss for 2017, with a loss that could reach a couple of hundred million dollars higher in 2018, “reflecting our expectation of a successful ramp in subscriber acquisitions,” Michael Cavanagh, Comcast’s senior executive VP and CFO, said.

For now, Xfinity Mobile results are being factored into Comcast’s corporate results, rather than tying it to the cable communications unit. Cavanagh expects it to stay that way likely through 2019 during the ramp up so it does not “distort” the business results of the cable unit during the ramp-up phase of the Xfinity Mobile product.

Turning to video, aggressive offers from new OTT entrants and traditional competitors continue to create headwinds for Comcast’s pay TV business, which shed 33,000 subs in Q4.

RELATED: Comcast Sheds 33K Video Customers in Q4

“It is definitely a very competitive video environment,” Watson said, adding that Comcast will continue to fight for “profitable video relationships.”

He noted that Comcast continues to make “moderate” adjustments to its video strategy, segmenting that market with products like X1, its flagship offering, and Xfinity Instant TV, a skinnier, IP-based package of channels that was launched in beta form in September 2017.

Comcast ended 2017 with about 60% of its residential video sub base on X1, and with nearly 20 million X1 voice remotes deployed.

 "While we’re going to compete aggressively across the board for good video customers, we have transitioned more and more toward broadband,” Watson said. “Broadband is a centerpiece for us.”

Comcast pulled in 350,000 new broadband subs in Q4 (down from 385,000 in the year-ago quarter), and believes there’s ample room to grow.

“The DSL base is still substantial,” Watson said.

He said Comcast’s deployment of gigabit-capable DOCSIS 3.1 technology now spans about 80% of the operator’s footprint, and that the rollout should be completed by the end of 2018.

Cavanagh said median data usage is up 48% year-on-year, and that about 75% of Comcast’s residential data customers get speeds of 100 Mbps or more, compared to about 50% a year ago. That’s reflected by Comcast’s efforts to lift baseline speeds across the customer base, he said.

Comcast Business Services remains a bright spot, as revenues there rose by 12.2% in the quarter, enabling the unit to exit 2017 with an annual revenue run rate of $6.5 billion.

Cable capex grew 2.8%, to $2.2 billion in Q4, and was up 4.7%, to $8 billion for the full year. That increase was driven by CPE investments for X1 and wireless gateways, and included investments in infrastructure to boost network capacity and line extensions to reach more residential and business customers.

Charter Communications confirmed that it has launched DOCSIS 3.1 and its new Spectrum Internet Gig offering to seven more markets.

Charter, which launched D3.1 in Oahu a few weeks ago, said it has extended access to more than 8.8 million consumers in systems serving Austin, Texas; Charlotte, N.C.; Cincinnati; Honolulu; Kansas City, Mo; New York City; Raleigh-Durham, N.C.; and San Antonio. Notably, that group includes several markets with a Google Fiber presence.

RELATED: Charter Launches 1-Gig in Oahu for $104.99/Month

DSL Reports reported on Charter’s D3.1 expansion earlier this week.

Charter said it will launch D3.1 to more markets in 2018.

Charter’s new cap-free offering, which pairs a downstream that maxes at 1 Gbps with an upstream up to 35 Mbps, is priced at $104.99 per month to new customers. Charter confirmed in the Oahu launch that pricing on it for existing customers with TV service is $114.99 per month, and $124.99 per month without the TV service bundle. Service also comes with a modem with integrated WiFi and a 30-day money back guarantee, the company said then.

In those D3.1-enabled markets, Charter is also doubling minimum downstream internet speed  – from 100 Mbps to 200 Mbps at no added cost. That minimum speed tier comes with a 10 Mbps upstream.

“Charter’s state-of-the-art, fiber-rich network is superior in its ability to deliver fast and reliable internet to millions of consumers across the country,” Tom Rutledge, Charter’s chairman and CEO, said in a statement. “As technology continues to evolve, the products and services of tomorrow will increasingly rely on faster broadband connections. Charter’s world-class network is best-positioned to deliver the bandwidth and capacity needed to meet these growing demands.”

Comcast announced it has launched 1 Gbps (downstream) service for residential and business services via DOCSIS 3.1, a new data platform for widely deployed HFC networks, in Sacramento, Calif., and nine surrounding cities.

In addition to Sacramento, Comcast extended D3.1-powered services to homes and businesses in: Antelope; Carmichael; Citrus Heights; Elk Grove; Folsom; Galt; Rancho Cordova; Rio Linda; and Roseville. McClellan Air Force Base will also have access to the faster speeds enabled by D3.1, Comcast said.

In Sacramento, similar to other D3.1 Comcast markets, the MSO is selling residential 1 Gig for $159.99 per month without a contract and, for a limited time, is offering it to new high-speed internet subscribers for $89.99 per month, with a one-year agreement. Pricing for current customers with a contract will vary, Comcast noted.

Comcast’s latest D3.1 expansion comes on the heels of the national rollout of the xFi Advanced Gateway, which bakes in 8x8 802.11ac WiFi, a set of dedicated IoT radios, and support for xFi, a cloud-based home WiFi management platform that the cable operator rolled out in May.

Comcast is deploying that new gateway (previously called the XB6) to customers on the MSO’s fastest residential speed tiers, from 300 Mbps up to 1 Gbps, in markets where it has deployed DOCSIS 3.1. Comcast has deployed D3.1 to more than 75% of its footprint so far.

Comcast has also started to deploy and new supplemental xFi Pods (initially in Chicago and Boston) that work with primary gateways to extend the reach of WiFi signals in the home.

RELATED: Comcast Starts Rollout of ‘xFi Pods’ to Boost Whole-Home WiFi

“With this offering, Comcast will have the broadest deployment of Gigabit Internet speeds throughout Northern California,” John Gauder, regional vice president, Comcast California, said in a statement. . “This is yet another proof-point that our broadband and WiFi networks are powerful, flexible and built for speed. We’ve increased internet speeds 17 times in the past 16 years and we will continue to bring California customers the absolute fastest speeds possible by proactively investing in our advanced, high performance network.”

Following initial deployments in markets such as Salt Lake City, Comcast has moved ahead with the national rollout of the xFi Advanced Gateway, a product that supports DOCSIS 3.1, souped up WiFi and a set of dedicated IoT radios.

Early on, Comcast will deploy the new gateway (previously called the XB6) to customers on the MSO’s fastest residential speed tiers, from 300 Mbps up to 1 Gbps, in markets where it has deployed DOCSIS 3.1. Comcast has deployed D3.1, a gigabit-class technology for its HFC network, to about 75% of its footprint (or 26 markets) so far.

Comcast is leasing the xFi Advanced Gateway for $10 per month, the same price as its previous-generation DOCSIS 3.0-based gateway, the xFi Wireless Gateway (formerly known as the XB3).  Comcast designed the new gateway, but as reported earlier, the operator has tapped Arris to build a version powered by an Intel Corp. D3.1 chip, and Technicolor to build one using Broadcom’s  chipset.

The new gateway supports xFi, a cloud-based home WiFi management platform that the cable operator rolled out in May.

Among other specs, the new gateway supports and 8x8 WiFi antenna array that leans on 802.11ac version 2, which allows for it to tap into 160 MHz channels (versus 20 MHz and 80 MHz used in most WiFi routers and gateways in the market). It also uses Multi-user, Multi-input, Multi-output technology to deliver top speeds to dozens of devices hanging off the network, the company said.

That also “over-provisions” the device to support more than 1 Gbps, Fraser Stirling, senior vice president of devices and AI systems at Comcast, said. Comcast said it has tested WiFi speeds of more than 1.5 Gbps using the new gateway's wireless technology configuration. 

Comcast believes that the WiFi capacities of the new gateway will be enough to blanket the vast majority of homes with WiFi, but later this month will start to offer optional, complementary xFi Pod devices that use mesh technology to complete the whole-home WiFi scenario by extending the range of the system and eliminating dead zones.  

Comcast hasn’t announced pricing on those xFi Pods, developed in partnership with Plume, but has posted an FAQ about them. Per the FAQ, Comcast will be selling the self-installable xFi Pods in sets of three or six.

RELATED: Comcast Leads $37.5M Investment in Plume

The xFi Advanced Gateway is also equipped with a set of IoT radios – Bluetooth LE, Zigbee and Thread, making the device “capable of connecting to virtually any IoT device.” Nest devices, for example, use Thread radios. Those capabilities are also expected to ensure that the new gateway integrates with Xfinity Home, Comcast’s home security/smart home service.

Comcast said it has made the new gateway easy to set up and onboard, as customers need only plug it in, scan a QR code with the xFi app and follow the prompts. Customers will be able to self-install the device, but for company installs, the techs will be using the same “customer flow” to set up the device, Stirling said.

“Everything we’ve been doing lately has 100% self-install in mind,” Stirling said. “The SIK (self install kit) is always front and center.”

More details about Comcast’s new product and its design strategy will be featured in the December 11 edition of Broadcasting & Cable.

Charter Communications has officially entered the DOCSIS 3.1 era with the launch of a 1 Gbps (downstream) residential broadband service in Oahu called Spectrum Internet Gig. 

The new service, which is free of data caps and contracts, is priced at $104.99 for new customers, and is paired with an upstream that maxes out at 35 Mbps. Pricing for existing customers with TV service is $114.99 per month, and $124.99 per month without the TV service bundle. Service also comes with a modem with integrated WiFi and a 30-day money back guarantee, the company said.

Tied in, Charter has also doubled the minimum downstream internet speed offered in Oahu – from 100 Mbps to 200 Mbps. That minimum speed tier comes with a 10 Mbps upstream.

UPDATE: “Customers today enjoy a flagship broadband speed that is 20 times faster than it was eight years ago, while the price per Mbps for customers has decreased 93%,” Tamara Smith, VP of policy communications at Charter, wrote in this blog post. She added that investment in more efficient bandwidth management and advanced compression technologies have enabled Charter to increase its broadband speeds.

Charter is expected to launch Spectrum Internet Gig in other markets soon. Other MSOs that haven been aggressive with D3.1 include Comcast, Mediacom Communications, RCN, and WideOpenWest, among others.

RELATED: CableLabs Stamps Another Batch of DOCSIS 3.1 Devices 

In October, Charter president and CEO Tom Rutledge said the MSO planned to launch 1-Gig service via D3.1 “in several key markets” over the next couple of months, and that the company would eventually buy D3.1 modems exclusively (the initial wave of D3.1 models are hybrids that can tap into spectrum for DOCSIS 3.1 and DOCSIS 3.0 services).

“Charter’s state-of-the-art, fiber-rich network is superior in its ability to deliver fast and reliable internet to millions of consumers across the country,” Rutledge said in a statement. “As technology continues to evolve, the products and services of tomorrow will increasingly rely on faster broadband connections. Charter’s world-class network is best-positioned to deliver the bandwidth and capacity needed to meet these growing demands.”

Charter hasn’t announced where it will deploy D3.1 services next. However, the company does expect to raise the minimum speeds available to 100 Mbps to most of its footprint by the end of the year.

A set of modems and gateways from Arris, Kaon Media and Technicolor passed the DOCSIS 3.1 test at CableLabs following certification wave 121.

Certification means those modems are interoperable with DOCSIS network gear, and is a requirement for retail distribution. Most cable operators also require DOCSIS certification on modems and gateways they distribute themselves.

This round, Arris got a passing grade for the Touchstone TG3452 a DOCSIS 3.1-powered gateway that supports high-speed internet and home telephony and has an integrated four-port gigabit router and dual-band 802.11n and 802.11ac Wave2 WiFi access point, plus a battery backup. It also bakes in MoCA 2.0 for high-speed networking over home coax lines.

Arris’s model also supports RDK-B, the broadband flavor of the Reference Design Kit, the preintegrated software stack for set-tops and gateways managed by Comcast, Liberty Global and Charter Communications.

RELATED: RDK Rides the Adoption Wave

Arris hinted at the new model during its Q3 earnings call. Larry Robinson, president of Arris’s CPE division, noted that the company had started deployments on a new DOCSIS 3.1 voice modem with a key, but unnamed U.S. cable operator. Comcast, which has been aggressive with D3.1, is Arris’s largest customer.

Update: A reader inquired about which vendor is supplying the silicon in Arris's new model, pointing to recent complaints about the performance of DOCSIS 3.0 cable modem products with Intel Puma 6 made by suppliers that included Arris and Netgear that has since been dismissed. Arris declined to identify the chipmaker for the new TG3452, adding that it "works with a variety of partners" and that the company typically does not "disclose our technology providers or our plans or agreements with them." Arris also did not disclose the chipmaker for its first D3.1 model, a retail device called the SB8200, though it's believed to be powered by Broadcom silicon. However, this data sheet on the model in question, which notes the TG3452's use of a "Multi Processor Technology with ARM and ATOM based Application Processor," suggests that it is using Intel's new D3.1-powered Puma 7 chipset, the reader added.  

CableLabs also stamped the VM3000G telephony D3.1 gateway from Kaon Media, a supplier based in South Korea. That device also embeds dual-band 802.11ac WiFi, four gigabit Ethernet ports, two phone ports, and an option for MoCA 2.0.

CableLabs documents show that Technicolor won certification for a model called the CGA4131. As of Friday morning, the vendor had yet to respond to a request for more details about that model.

The latest round of D3.1 certifications arrive as several cable operators, including Comcast, RCN, Mediacom Communications, expand their deployment of the technology, which currently brings gigabit speeds to the downstream. Liberty Global and Charter Communications are among major MSOs that have D3.1 in their near-term plans.

Arris and Technicolor have also gained D3.1 certifications on other products, as have Hitron, Humax, Askey, CastleNet, Netgear, Sagemcom, Technicolor, and Ubee Interactive.

Following its rollout in a batch of markets, WideOpenWest said it will broaden its deployment of a 1 Gbps (download) service using DOCSIS 3.1 to the bulk of its footprint – about 95% of it -- by February 2018.

WOW! initially launched the service in four markets last fall – Auburn and Huntsville, Ala.; Evansville, Ind.; and Knoxville, Tenn. The operator has also introduced 1-Gig service in Grosse Point Shores, Mich.; and Marysville, Parma Heights, and North Ridgeville, Ohio.

RELATED: WideOpenWest Launches 1-Gig Broadband in Four Markets

The company noted that Marysville, Ohio, and Powell, Tenn., will get 1-Gig following an “edge out” that will deliver its full suite of services in the next month or so, with the rest of the rollout to follow in early 2018 in markets such as Augusta, Ga.; Charleston; Chicago/Naperville; Columbus, Ga.; Columbus, Ohio; Panama City and Pinellas, Fla.; southeast Michigan/Detroit; Valley, Ala; and West Point, Ga.

WOW has been rolling out 1-Gig service on HFC using DOCSIS 3.1 and Arris E6000 CCAP chassis, but is also starting to use a new virtualized Distributed Access platform from Nokia as the operator looks to mine more capacity from its HFC network in certain scenarios. 

RELATED: WOW! Rolls With Nokia's Distributed Access Platform 

Per WOW!’s current pricing, it’s selling the 1-Gig residential service (paired with an upstream of 50 Mbps) for $79.99 per month as a stand-alone with a two-year contract, or $89.99 per month without a contract. WOW!’s 1-Gig service, which comes at lower prices when bundled with other WOW services, is not saddled with data caps.

RELATED: WOW!: We’ll Stay Cap Free

"Our customers want the fastest Internet speeds available so they can stream, chat, game, browse and enjoy Internet-connected devices without interruption," WOW! CEO Steven Cochran said, in a statement. "WOW!'s previous network investments have enabled us to provide 1 Gig services through existing coax plants with minimal capital expenditure. We are taking advantage of the opportunity to future-proof our entire network to power the data-hungry devices and connected gadgets our customers love."

WOW! ended Q2 2017 with about 727,600 high-speed internet subscribers and a penetration rate of 23.7%.

The shift to OTT-delivered services and its impact on the traditional pay TV market isn't great for Arris’s set-top business, but the company believes it’s also a trend that brings major benefits to the higher-margin broadband networking side of the house.

“In Q3, traditional pay TV subscriber adds in the U.S. were mostly negative” driven by a confluence of cord-cutting and shaving, storm-related disruptions and changes in consumer credit policies, Arris CEO Bruce McClelland observed Wednesday in the company’s’ earnings call.

But the drive toward more OTT-delivered services, he pointed out, requires more broadband bandwidth and a highly-reliable network.

RELATED: Broadband Becoming ‘Epicenter’ of Comcast’s Customer Relationship

“While we strongly believe in the power of the multi-faceted bundle offered by our service provider customers, it's really important for me to emphasize that we are very well positioned to benefit from the growth in over-the-top traffic,” McClelland said.

That was evident in Arris’s Q3 results. Its Network and Cloud unit saw revenues rise 9%  versus the prior quarter, and 10% year-over-year, driven by a mix of hardware and software sales for the E6000, its flagship Converged Cable Access Platform.

Arris has also started to ship its Remote PHY products, and expects “several” commercial deployments in Q4, Dan Whalen, president of Arris’s Network and Cloud unit, said.

RELATED: Cable-Tec Expo: Arris Paves Path to Remote PHY

Results at Arris’s consumer premises equipment business, which includes set-tops and modems, was a bit more mixed

Sales there were down 5% year-on-year due to lower set-top shipments, but were balanced by strong sales for DOCSIS modems and gateways. However, DSL CPE sales were down, reflecting ongoing sub losses in that category by U.S. telcos.

Through the first three quarters of 2017, broadband CPE revenues were up, while video CPE sales were 9% lower through that same stretch, Larry Robinson, president of Arris’s CPE business, explained.

Robinson said Arris remains bullish about DOCSIS 3.1 in the coming months, though the company might fall a little shy of a target to ship 2 million D3.1 CPE devices this year. He said Arris has also started deployments on a new DOCSIS 3.1 voice modem with a key, but unnamed U.S. cable operator.

On the video side of the house, he did point to some momentum occurring at Altice (for a next-gen 4K device for its global footprint), opportunities in Canada from X1 syndication deals, and solid international response from Arris’s new line of Android TV-based box lineup.

RELATED: Arris Helps Put Altice on Next-Gen Video Path

McClelland said Arris remains confident that it will be able to polish off its proposed acquisition of Brocade’s Ruckus Wireless and ICX switch businesses, a deal that is contingent on the closing of a merger between Brocade and Broadcom.

RELATED: Arris’s Proposed Ruckus Wireless Acquisition Hits Another Speed Bump

Arris posted Q3 GAAP revenues of $1.72 billion, up 0.2% versus the year-ago quarter, and net income of 47 cents per diluted share, up from 25 cents. Arris ended the period with $1.4 billion of cash resources.

McClelland said Arris is on track to hit full-year revenues of $6.6 billion to $6.8 billion, and GAAP earnings per share of 61 cents to 81 cents – those numbers exclude anything that would come way of the pending Ruckus acquisition.

Following its residential deployment of DOCSIS 3.1-based broadband service, Comcast Business has launched two new tiers of service on its HFC network serving its western U.S. area footprint. 

Those tiers – Business Internet 1 Gig (up to 1 Gbps in the downstream) and Business Internet 500 (up to 500 Mbps in the downstream) are now available to businesses in California, Colorado, Houston, Kansas, Minnesota, Missouri, Oregon, Utah and Washington, the company said.

RELATED: Comcast Business Launches ‘ActiveCore’

Those launches follow similar ones in Comcast’s Central, Mid-Atlantic and Northeast regions.

Comcast also offers multi-gig services to businesses on its Ethernet-powered fiber network.

Comcast’s business services division pulled in revenues of $1.57 billion in Q3, putting it on an annual run rate of $6.28 billion.

The bulk of those revenues come from small- and mid-sized business customers, but Comcast is also shooting up market by pursuing larger, enterprise-class deals.

RELATED: Comcast Business Bows New Unit Targeting Fortune 1000

Continuing its aggressive rollout of DOCSIS 3.1, Comcast confirmed that it has launched 1-Gig services using the technology to the vast majority of the residential homes and businesses it reaches in the Greater Pittsburgh area.

A small number of areas in that region that are not part of today’s launch (Washington County, the North Hills and the Mon Valley, according to The Tribune-Review) will be getting D3.1-based services by mid-November, with any remaining portions to get it by end of year.

Using D3.1, Comcast will offer up to 1 Gbps downstream and up to 35 Mbps in the upstream. The cable industry is also working on a “Full Duplex” annex to D3.1 that will support symmetrical multi-gigabit speeds.

RELATED: Full Duplex DOCSIS Plows Ahead

Like in many of its other D3.1 markets, Comcast in Pittsburgh is offering 1-Gig residential service for $79.99 per month under a 12-month promotional price/contract, before rising to almost $105 per month.

The launch in the area follows recent rollouts in Comcast’s hometown of Philadelphia and in Baltimore.

Comcast, which also offers a 2 Gbps “Gigabit Pro” service using FTTP in many markets, expects to have D3.1 deployed in the majority of its footprint by end of year.

Last week on Comcast’s Q3 earnings call, company chairman and CEO Brian Roberts said that high-margin broadband is becoming the “epicenter” of Comcast’s relationships with customers.

RELATED: Roberts: Broadband Becoming ‘Epicenter’ of Comcast’s Customer Relationship

Charter Communications dropped a few technology tidbits into its Q3 call Thursday, touching on activities and plans involving video, broadband and wireless/mobile.

Charter, company president and CEO Tom Rutledge said, had deployed more than 1 million WorldBox devices across its national footprint by the end of Q3. Those hybrid IP/QAM devices use the company’s new cloud-based guide and a downloadable security platform that allows the company to deploy it in all systems – Charter legacy systems as well as the former Time Warner Cable and Bright House Network footprints.

Charter originally tapped vendors such as Cisco Systems (before it sold its CPE business to Technicolor) and Humax to make the WorldBox, but since tapped Arris to aid a WorldBox 2.0 project that aims to be more cost-efficient than its predecessor.

RELATED: Arris ‘Racing to the Finish Line’ on WorldBox 2.0

“Going forward, WorldBox will be the only set-top box we buy and will be the workhorse for our all-digital project,” Rutledge said, adding that Charter plans to deploy its new Spectrum Guide to new customers in former TWC and Bright House markets next year.

While Charter hopes the WorldBox will help to add attractiveness to its pay TV offering, Rutledge noted that one pressure on the video bundle (in addition to the big one, price) comes in part from password sharing and multi-stream OTT products that can exacerbate that issue.

On the broadband front, Rutledge said Charter will introduce gigabit speeds using DOCSIS 3.1 “in several key markets” over the next couple of months.

Charter plans to eventually buy D3.1 modems exclusively, as the products are expected to cost about the same as D3.0 devices (D3.1 modems are hybrids that support spectrum used for D3.0 and D3.1 services).

Currently Charter offers internet speeds of 100 Mbps in more than 75% of its footprint, up from 50% at the end of Q2, and expects to offer a minimum of 100 Mbps across nearly all its passings by year-end, Rutledge said.

Charter is also on track to launch a wireless service in 2018 using the MVNO agreement with Verizon that it inherited from the TWC deal. Rutledge offered more color, as Charter expects to make that operational by the second quarter of next year and that field trials are underway with Charter employees.

Rutledge also talked up Charter’s cooperative relationship with Comcast with respect to mobile and wireless, which includes WiFi network management and the MVNO deal that both companies have with Verizon.

RELATED: Comcast, Charter to Partner on Wireless

“We have an opportunity together to run the business more effectively from a back-office perspective,” he said, adding later that the use of WiFi in and out of the home will help Charter keep its MVNO-related costs in check.

The industry is making significant progress with Full Duplex (FDX) DOCSIS, an extension to DOCSIS 3.1 that will position cable operators to deliver multi-gigabit symmetrical speeds on their HFC networks.

Though current consumer demand for an upstream path that’s so speedy isn’t hear-and-now need, FDX will get cable ahead of the curve before it truly is needed and give it a new option that will help MSOs compete with the “billboard” speeds that are being marketed today by telcos and other rivals that are delivering service on fiber-to-the-premises networks.

Read More: Complete coverage of Cable-Tec Expo 2017

“I think the biggest fear that the operators have is that their competition may one-up them and offering 1 Gbps service when they [the cable operators] are limited to 50 Mbps upstream or 100 Mbps upstream,” Tom Cloonan, chief technology officer of network solutions at Arris, said.

Cloonan said the upstream average today is somewhere in the neighborhood of 100 kbps, but acknowledged that being able to deliver billboard speed of 1-Gbps in the upstream will give cable operators a way to fire back in the marketing game as MSOs face off against FTTH competition that is already offering speeds of 500 Mbps or 1-Gig in the upstream direction.

Enabling FDX DOCSIS will help cable operators deliver on HFC the kind of symmetrical speeds that are delivered by fiber-to-the-home architectures. Early on, it’s more likely that FDX will help operators meet the upstream demands required by business service customers.  

But starting to pivot in that direction today will also help cable operators future-proof their networks and get the best bang for the buck, according to John Chapman, a fellow at Cisco Systems and the CTO of the company’s cable access business.

“If you’re going to spend money on the plant…do you do a small upgrade, or do you do a big upgrade?” he asks. “Ideally you spend the money on the plant once and it lasts for a long time.”

Operators, he points out, could opt to do a mid-split, raising the available upstream spectrum to 85MHz – enough to open the door to about 400 Mbps.

“It’s not going to be a ten-year plan,” Chapman said. “It’s going to get tight at some point in time.”

Operators can also push the upstream to 204 MHz, sometimes called a “high-split,” which would put MSOs in a position to offer more than 1 Gbps in the upstream.

Chapman points out that it also requires a significant change to the plant, so if an operator is  already committed to changing diplexers and amplifiers and return path amps, why not take the next step and implement a true next-gen frequency plan for the upstream and get ahead of the curve?

“What more bang for the buck could you get for that [work]?” he said. “We’ve Full Duplex lined up for that. It will have built-in future proofing…it negates the need to go to fiber [to-the-home].”

He also sees FDX being deeply coupled with other next-gen access network moves, such as fiber deep, which replaces one node with between 12 to 18, and new distributed architectures. “It’s like a package deal.”

Though there’s no immediate need for FDX, suppliers now have a technical path forward for products that will support it in the years to come.

Earlier this month, CableLabs released the physical layer specifications for FDX, arriving a little over a year after CableLabs started the specification writing process. CableLabs introduced the concept in February 2016.

CableLabs, which released the PHY layer specs on October 5, said this signals that FDX has reached the “advanced maturity stage,” enabling vendors to push ahead with their product development, Belal Hamzeh, vice president, research and development, wireless technologies at CableLabs, said.

RELATED: Full Duplex DOCSIS Plows Ahead 

Cloonan said he expects operators to turn up spectrum in that FDX band in phases. “Maybe they’ll turn on 96 MHz or 192 MHz…and a few years later turn on another 96 MHz, or another 192 MHz chunk of spectrum,” said.

Some industry experts see FDX trials getting underway sometime next year and into 2019, with 2020 seen as the technology’s first significant deployment year.

Demos of FDX-facing technologies and products are expected to be on show at this week’s SCTE•ISBE Cable-Tec Expo in Denver.

Arris, Cloonan said, will offer an “early stage demo” of its FDX handiwork this week. “We’re not in the end zone yet, but we’re moving down the field quickly." 

Cisco, Chapman said, will follow up on its earlier FDX-based demos, including a recent look at an echo-canceller technology that will be required. This week, it will also demo the concept of “sounding,” that involves the measuring of attenuation between the modems on a particular node. That will be used to put certain subscribers into separate transmission groups and on different frequency plans to ensure that they are not interfering with each other.

RELATED: Cisco Demos Full Duplex DOCSIS 

That, in part, is “how we achieve the trick of Full Duplex” in a point-to-multipoint system, he said, noting that reusing spectrum for both upstream and downstream traffic seemed like a pipe dream just a couple short years ago. “A lot of this is pretty clever rocket science.”

“It’s a challenging design, one of the most challenging DOCSIS specs because of the complexities of managing bandwidth in the upstream and the downstream direction…and the echo-cancellation circuits that are needed to make this work,” Cloonan said.

Moving HFC networks a step closer to supporting multi-gigabit symmetrical speeds, CableLabs said Wednesday it has released the physical layer specifications for Full Duplex (FDX) DOCSIS.

Read More: Complete coverage of Cable-Tec Expo 2017

FDX, an annex to DOCSIS 3.1, will put cable operators in position to deliver multi-gigabit symmetrical speeds – up to 10 Gbps -- by allowing both upstream and downstream traffic to run on the same swath of spectrum. By comparison, DOCSIS 3.1 was initially designed to support up to 10 Gbps down in the neighborhood of Gbps-plus upstream.

RELATED: Cisco Demos Full Duplex DOCSIS

The PHY layer specs arrive a little over a year after CableLabs started the specification writing process. CableLabs introduced the concept in February 2016.

RELATED: CableLabs: ‘Full Duplex’ Reaches Specification-Writing Phase

The release of the PHY layer specs signals that FDX has reached the “advanced maturity stage,” enabling vendors to push ahead with their product development, Belal Hamzeh, CableLabs’s vice president, wireless technologies, said.

Hamzeh said the MAC layer specs for FDX are in the working-group stages, but couldn’t say when they would be completed other than to expect that to occur “in the near future.”

He also stressed that FDX is 100% compatible with DOCSIS 3.1. Per the specs, the FDX band will reside between 108 MHz and 684 MHz (regardless of whether FDX channels occupy the whole band), so it’s possible for existing D3.1 modems to also use some spectrum set aside for D3.1. By comparison, D3.0 modems, which relies on channel bonding, can’t use D3.1 spectrum, which taps into blocks of tiny OFDM (Orthogonal Frequency Division Multiplexing) subcarriers. However, first batch of DOCSIS 3.1 modems are hybrids in the sense that they can deliver traffic in spectrum set aside for D3.0 and D3.1.

Per the FDX DOCSIS frequency plan, the ceiling is 684 MHz and derived from starting with the lower band edge of a “mid-split” (which raises the legacy spectrum ceiling to 108 MHz), allowing for three OFDM channels at 192 MHz each.

Demos of FDX-facing technologies and products are expected to be on show at next week’s SCTE•ISBE Cable-Tec Expo in Denver.

Read more: Complete coverage of Cable-Tec Expo 2017

Hamzeh added that CableLabs is already working on process to conduct interoperability testing for FDX.

Operators looking to deploy FDX DOCSIS will need to move to a node+0/fiber deep architecture, whereby there are no amplifiers between the node and the premises. Per the specs, a distributed architecture is also assumed due to the echo cancellation functionality that FDX requires. FDX-complaint nodes will be made to support simultaneous upstream and downstream communications over each FDX channel, enabled by cancelation techniques for self-interference and echo cancellation.

Enabling FDX DOCSIS will help cable operators deliver on HFC the kind of symmetrical speeds that are delivered by fiber-to-the-home architectures and, early on, will likely be used for commercial-grade services.

Some industry experts see FDX trials getting underway sometime next year and into 2019, with 2020 seen as the technology’s first significant deployment year. Much more on FDX product development, use cases, and deployment expectations will be covered in Multichannel News feature story to appear next week during Cable-Tec Expo.

For more color on how some top cable operators see FDX DOCSIS factoring into their plans, please see this Q&A (subscription required) with execs from Charter Communications, Comcast, Cox Communications, Liberty Global, and Mediacom Communications.

The CableLabs FDX DOCSIS PHY layer specs lists contributors from a mix of service providers and vendors, including Adtran, Altera, Analog Devices, Arris, Broadcom, CableLabs, Capacicom, Casa Systems, Charter, Cisco Systems, Cohere, Comcast, Cox Communications, Emcore, Harmonic, Huawei, Intel, Maxim, MaxLinear, Nokia, Qualcomm, Rogers Communications, SCTE, SED Systems, Sony, STMicro, Teleste, TI, Time Warner Cable (now part of Charter), Vecima Systems, and Xilinx.

Mediacom Communications said it has launched DOCSIS 3.1 and 1 Gbps (downstream) broadband service to parts of Delaware, Maryland and Michigan.

That expansion covers 27 more communities, including 19 in Delaware’s Sussex County, and others in southeastern Maryland and southwestern Michigan.

Mediacom upgraded its HFC network to D3.1 last year, and has been launching service with the technology in various parts of its footprint, including portions of Missouri, Kansas, northern Indiana; Illinois; Georgia; Minnesota; Huntsville, Ala.; southern Tennessee, and Iowa, and, of recent note, to its Gulf Coast markets.

RELATED: Mediacom Goes Big With DOCSIS 3.1

Mediacom said it now offers 1-Gig service to more than 1,250 communities, with the latest round factored in. It’s also rolling out a new 500 Mbps tier in its new 1-Gig markets.

Mediacom has been selling a 1-Gig (downstream) service, paired with upstream speeds up to 50 Mbps, at $139.99 per month as a standalone, with a “promotional package offers” that will arrive at a later date. Mediacom’s DOCSIS 3.1-based 1-Gig offering comes with a monthly data limit of 6 terabytes before overage charges are applied ($10 for each additional bucket of 50 GB of usage).

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Hitron Technologies has introduced an MSO-focused video marketing campaign that takes aim at the growing need for cable operators to deliver and support whole-home WiFi coverage via a mix of gateways, extenders as well as a mobile app that broadband subs can use to monitor and manage those connections.

RELATED: Hitron ‘Coda-45’ Modem Nets DOCSIS 3.1 Certification

Hitron’s “Unleash Your WiFi” campaign, which features a 14 year-old- “senior scientist” as its spokesperson, details apps such as MyHitron (a WiFi network management tool for customers) as well as the vendor’s EasyInstall app for IoS and Android app, which covers elements such as device configuration, signal-to-noise ration and verification of the WiFi speed and coverage provided in a given home.

Hitron, which doesn’t sell devices through retail channels but is rather focused on direct sales to cable operators, confirmed that this is a campaign aimed at MSOs/affiliates, and that its operator partners are also free to use the videos.

Rogers Communications, Midco and Mediacom are among Hitron’s  known North American customers for its DOCSIS 3.1-certified CPE, and GCI has approved certain Hitron D3.1 CPE models.

RELATED: Rogers Rolling Out Hitron’s DOCSIS 3.1 Gateway

Hitron, which counts Arris, Technicolor, Sagemcom, and Ubee Interactive among its cable broadband CPE competitors in the B2B sector, confirmed that four major North American cable operators have launched D3.1 with the vendor this year, and has been picked by three others in the region for D3.1 gateways, including one for business-class service.

The vendor’s marketing and product focus on whole-home WiFi comes as such offerings become a greater priority for operators such as Comcast, which recently launched ‘xFi,’ a cloud-based WiFi management platform.

Below are a couple of videos from the MSO-focused campaign:

[embed]https://vimeo.com/233668256[/embed]

Hitron Labs - Unleash Your WiFi from Hitron Technologies on Vimeo.

[embed]https://vimeo.com/233670388[/embed]

Hitron Labs - EasyInstall from Hitron Technologies on Vimeo.

There are no flukes in Cable.

Just ask Comcast, which was the first cable operator to report a full year of positive video subscriber growth in a decade, ending 2016 with 161,000 more customers than in the previous year. That Comcast managed to do that just as over-the-top and alternative video delivery systems were proliferating, gaining legitimacy and chipping away at traditional pay TV customer rolls was remarkable enough, but it was no fluke.

The Distributor of the Year Issue:Comcast's Makeover Yields Results|Five Ways Comcast Is Leading in Tech

That growth was a planned, concerted effort that not only yielded a video customer surplus, but was also profitable. Comcast finished the year with a 6.6% increase in cable-systems revenue and a 5.6% rise in cash flow. And it did it all the hard way, with no aggressive promotional pricing or special deals to attract customers that will drop the service in six months.

Instead, Comcast put its collective head down and focused on the fundamentals, rolling out new products like Xfinity Home and Xfinity Mobile at a steady pace and pumping hundreds of millions of dollars to beef up customer service.

The path to positive subscriber growth was a multiyear process, starting with the hiring of former Charter Communications CEO Neil Smit in 2010. It was Smit who initiated a multipronged plan to improve customer service, beef up the network and steer the company on a path toward product innovation and network superiority.

Smit stepped away from day-to-day operations in April — he is now vice chairman of Comcast Corp. — and handed the reins to 20-year Comcast veteran Dave Watson, who moves up to Comcast Cable CEO after serving as the cable unit’s chief operating officer for the past seven years, implementing the plans that he and Smit developed. Watson takes over just as subscriber growth is expected to decline in the wake of two massive storms that devastated homes in Houston and Western Florida. Comcast has said it expects the impact of Hurricanes Harvey and Irma to result in the loss of 100,000 to 150,000 subscribers in the third quarter.

MoffettNathanson principal and senior analyst Craig Moffett observed that the declines weren’t that surprising given that the video subscriber estimates, even at best-in-class Comcast, will have to come down.

Infrastructure Advantage
“We’ve spent 18 years repeating a simple mantra: Cable operators are not media companies, they are infrastructure providers,” Moffett wrote in a research note. “Their infrastructure is still advantaged. Comcast will be just fine.”

But the company is confident that it will continue to hit its financial targets, as well as continue its pace of innovation. For those reasons and more, Comcast is the 2017 Multichannel News Distributor of the Year.

For Watson, Comcast’s success has been the result of the company’s decision to stick to three basic tenets.

“The key for us is that we’re very focused on our core set of operating principles,” Watson said. “Staying focused on sustainable, profitable growth, driving innovation, that’s a big part; and third is to continue to improve the customer experience.”

While that may sound oversimplistic, Comcast has managed to make it work. In the past five years (2012-2016), overall revenue has grown at a 6.2% annual clip while cash flow has risen 7.2% per year. This year, the growth is even more dramatic — in the last 12 months between the first half of 2016 and the first half of 2017, revenue has grown 9.4% to $41.6 billion and cash flow is up 10.2% to $14.1 billion. This in a year that has seen competitive pressures increase as Hulu (25% owned by NBCUniversal) launched its Hulu Live offering, AT&T unveiled its over-the-top product DirecTV Now and networks are queuing up to release direct-to-consumer versions of their channels.

Comcast has used the X1 platform expertly in driving forward what Watson said is its newest mantra — becoming an “aggregator of aggregators.” That means not only offering access to subscription video on demand and over-the-top competitors, but embracing them.

Xfinity subscribers can access Netflix directly from their set-top boxes and over the years Hulu, YouTube and music service Pandora have been added to the lineup. Earlier this year, Comcast reached a deal where Sling TV — the over-the-top MVPD service from Dish Network — received a coveted spot on the set-top (mainly for international and multicultural programming). Just last week the cable operator expanded its relationship with YouTube, allowing customers to launch the online video app merely by speaking “YouTube” into their X1 voice remote.

Including those products is all part of the overall strategy of offering customers best-in-class products in almost every category, Watson said.

‘Aggregator of Aggregators’
“We look at each part of our business, every major product area, and we look at innovation opportunities at each one,” Watson said. “With X1, I think we are delivering in its early stages the promise of being an aggregator of aggregators — the best in linear, the best of on-demand, a terrific DVR, a great app, data and applications integrated. Netflix is a good example and soon-to-come will be You Tube. … To me this is constant improvement of our major product areas.”

That’s a far cry from the past, when a Netflix app embedded in any cable operator’s set-top box would have signaled the end of the world. But the evidence continues to mount that SVOD services like Netflix, Hulu and YouTube aren’t replacements for cable, but can complement the service. And making it easier for an X1 customer to access their SVOD subscriptions only enhances the cable operator’s stature in the customer’s mind.

That shift, along with a continued focus on innovation — Comcast still has a mandate to roll out a new product or product enhancement at least once per quarter — has been a key part of Comcast’s success. In the past five months, Comcast has rolled out a new wireless service, Xfinity Mobile, part of its mobile virtual network operator agreement with Verizon Communications; xFi, a cloud-based home WiFi management platform; and enhancements to XFinity Home that allow consumers to remotely control home functions like heating, cooling, lighting and security cameras through their voice remote.

The voice remote, launched in 2015, is one of those product enhancements that has fared even better than its staunchest proponents had hoped. Comcast has deployed about 17 million voice-remote devices and customers now make about 1 billion voice commands per quarter.

“It’s just remarkable,” Watson said of the product.

Comcast has also embraced products from programmers such as AMC Premier from AMC Networks and 21st Century Fox’s FX+, ad-free versions of the AMC and FX pay TV networks available for an additional fee. In an interview, Comcast executive vice president of Xfinity Services Matt Strauss said the offerings are part of an overall evolution of the video product, and of the strategy to entice customers to buy into the entire Xfinity family of offerings, not just one or two things.

Strauss said the strategy could be traced back to Comcast’s initial investments in infrastructure that laid the foundation for the product suite that is available today.

“We’re now at a point where it’s really about scale, and how do we continue to deliver innovative products and services and accelerate how we get deeper and deeper into our base,” Strauss said.

The answer, Strauss said, is to provide elegant, easy solutions to customer problems even before subscribers know they are problems. For example, as the TV audience became more and more fragmented and finding shows grew more difficult, X1 provided a user interface that made it easier to navigate through the thousands of linear and on-demand content choices. Later, X1 added a voice remote, which made navigation even easier.

For high-speed data, the solution was faster speeds. Comcast has increased data speeds 17 times in the past 16 years and by the end of 2017 will have fully deployed DOCSIS 3.1, which will enable speeds of 1 Gigabit per second.

“Speed is important, but access is equally important,” Strauss said. “Most people now connect devices via WiFi. Ensuring we have the best WiFi in the home, as well as the best WiFi out of the home is also very core to the strategy and that’s where you’re seeing us deploy our newest wireless gateway, the XB6 (xFi) which can deliver the fastest in-home WiFi speeds.”

From there, xFi customers would naturally migrate to Comcast’s XFinity Home product, which again incorporates the aspects of other company products, like the voice remote, to control household functions. Comcast is truly selling a bundle, and that bundle is interconnected.

“When we look at the future, today we typically sell on price,” Strauss said. “And the more products you take, the better the price. The challenge there is when you sell on price, essentially you’re making yourself a commodity.

“What we really want to transition to is selling an experience,” Strauss added. “The more products you take from us, you will of course get a better price, but you will also get a better experience. Starting to weave together the portfolio and reinforcing that, I think, is a big opportunity. A lot of that you’re going to see solidly around the home. There is a big opportunity around the digital home.”

The company is obsessed with giving more choice in the video-on-demand side of the business. “We’re breathing new life into what it means to get video,” Strauss said. “Now we have 130,000 choices, the top 100 Nielsen-rated shows, 900 series fully stacked. We added Netflix, not just as an app, but integrating Netflix contextually.”

As a result, on-demand is growing again — this year, Comcast customers are spending an average of 32 hours a month watching on-demand shows, up 20%.

“When people have said video is in a decline, ratings are in a decline, we see something different,” Strauss said. “We see more and more video consumption moving to time-shifting, we see while live ratings may be declining, the total video consumption is increasing, instead that more is happening outside of traditional measurement. It’s like dark matter, people aren’t seeing it, but we think the total video pie is increasing. And we’re continuing to build the platforms and the capabilities to all people to watch TV smarter and on their terms.”

The emergence of over-the-top players has added to that shift and is continuing to challenge the model, Strauss said, but Comcast doesn’t see any compelling reason to join the OTT fray.

“Part of what is happening in the market, especially on the video side, is you are seeing a lot of increased competition, you’re seeing a lot of competitive offers — in some cases you’re even seeing some of these OTT players offer video at negative gross margins. We’re not going to chase that.”

But the evidence is mounting that younger consumers are increasingly looking outside the traditional pay TV ecosystem for their content needs. Pay TV subscribers fell by more than 900,000 in the second quarter, the worst Q2 performance in history. That’s after a record first-quarter loss of more than 750,000 video customers.

Moffett, who raised his rating on Comcast to “buy” earlier this month after downgrading the stock to “neutral” in June, said he sees the company as the standard for the pay TV business. But he also estimated that the MSO will lose almost 1 million video customers in the next five years, ending 2021 with 21.7 million subscribers, down from 22.5 million in 2016. The analyst does see Comcast adding about 5 million broadband customers in that same time frame, finishing 2021 with 31.1 million high-speed data customers compared to 26 million in 2016.

Competition is also heating up. Google’s YouTube TV expanded to eight additional markets earlier this month, growing its total markets to about 48 cities. In addition, AT&T began pricing its DirecTV Now service even more aggressively in the quarter, at $10 per month for any unlimited wireless subscriber, and returned to offering free Apple TV devices with a three-month commitment.

While weakening subscriber metrics shouldn’t come as a surprise, Moffett said, they aren’t a calamity, either. Pay TV companies, he said, still have broadband pricing power, which should help them in reaching financial targets. That’s just what Comcast said when it predicted the Q3 subscriber loss.

Strauss noted that all the panic over OTT and cord-cutting could be unwarranted. There is no doubt, he said that viewing habits are changing, but life stages and household economics also need to be considered.

As an example, Strauss pointed to Xfinity on Campus, Comcast’s multiscreen managed IPTV service for college students. When the product was in development, Strauss said Comcast realized that the last thing college students wanted was to be tied to a set-top box. So the MSO had to rethink the idea, creating a product that allowed students to download the Xfinity Stream app, offered a cloud-based DVR and would let them watch live TV anywhere on campus. The product has been highly successful and, as students returned for the most recent fall semester, it is deployed in more than 100 schools.

“Millennials do watch TV as much as any other segment,” Strauss said. “They just have different needs and how they want to consume and access it.”

That, Strauss said, has led to Xfinity Instant TV — an in-home, in-footprint, managed IPTV service slated for a Q3 launch — as well as ad-free versions of networks that consumers can buy for a fee. Comcast reached a deal with AMC Networks in August for AMC Premiere, an ad-free version of the popular AMC network for an additional $4.99 per month. A month later, FX Networks announced a deal to offer an ad-free version of its flagship FX channel — called FX+ — to Comcast customers for $5.99 per month.

Strauss said those channels and other services like it are just an example of how Comcast’s foresight in investing in content, infrastructure and innovation have translated into meeting needs even customers didn’t know they had.

“The future we’ve always talked about has finally come, at least for us,” Strauss said. “I think that is because of decisions that we made, not six, 12 or 24 months ago, but years ago, based on where we saw the puck going and ensuring that we would have the technology capabilities and the infrastructure in order to deliver upon the innovation that we believed we were going to need to stay competitive. As a result you’re seeing us deliver on a lot of these products and services. But this didn’t happen by accident. It really happened because of very important strategic decisions we made years ago.”

Mediacom Communications expanded its launch of DOCSIS 3.1-based gigabit broadband service by debuting the service in its Gulf Coast markets, starting with 55 communities in south Alabama and the Florida Panhandle.

As DOCSIS 3.1 cable modems become more readily available, Mediacom said it intends to launch 1-Gig on a market-by-market basis throughout the remainder of 2017, including 36 additional Florida and Alabama communities over the next month.

Factoring in the latest service launches, Mediacom said it now offers 1 Gbps service to more than 1,200 U.S. communities.

Mediacom upgraded its HFC network to D3.1 last year, and has also launched 1-Gig service in several other parts of its footprint, including parts of Missouri, Kansas, northern Indiana; Illinois; Georgia; Minnesota; Huntsville, Ala.; southern Tennessee, and Iowa.

RELATED: Mediacom Goes Big With DOCSIS 3.1

In addition to the 1-Gig offering, Mediacom is also introducing a new 500 Mbps service tier in its D3.1 markets.

Early on, Mediacom has been selling a 1-Gig (downstream) service, paired with upstream speeds up to 50 Mbps, at $139.99 per month as a standalone, with a “promotional package offers” that will also be announced at a later date.  Mediacom’s DOCSIS 3.1-based 1-Gig offering comes with a monthly data limit of 6 terabytes before overage charges are applied ($10 for each additional bucket of 50 GB of usage). Mediacom has also been introducing a new 500 Mbps tier in its D3.1 markets.

“Creating true gigabit communities across our national footprint was a central component of the 3-year, $1 billion capital expenditure plan announced by Mediacom in 2016,” Doug Frank, group VP for Mediacom’s Coastal Region, said in a statement. “Our aggressive rollout of gigabit speeds has provided dozens of cities and towns across South Alabama and the Florida Panhandle with a distinct technological advantage in today’s global marketplace.”  

Atlantic Broadband said it has introduced 1-Gig residential and business broadband services to its entire Miami-area footprint.

The deployment, which leans on DOCSIS 3.1 technology on Atlantic Broadband’s HFC plant there, includes Miami Beach and surrounding areas such as Aventura, Bal Harbour, Bay Harbor Islands, Golden Beach, North Bay Village, Pinecrest, South Miami, Sunny Isles Beach, Surfside, Brickell, Wynwood, the Biscayne corridor and downtown Miami.

The residential version of the service, called GigaEdge, delivers up to 1 Gbps downstream and 50 Mbps down, starting with promotional pricing of $89.99 per month for new customers, while the business-focused offering, branded as Pro GigaEdge, is $199.99 per month for new customers, with a 3-year agreement.

Prior to the 1-Gig launch, Atlantic Broadband’s fastest speeds in the market offered 250 Mbps/20 Mbps.

“With the much-anticipated launch of GigaEdge and Pro GigaEdge, we continue to enhance our position as South Florida’s premier communications provider, delivering unbelievably fast Gigabit internet speeds, the most complete entertainment, and the best hands-on local service available to the communities we serve,” Elizabeth Michelsen, Atlantic Broadband’s VP of and GM for South Florida, said in a statement. “And, with today’s launch, we celebrate the completion of the final phase of Atlantic Broadband’s $6.3 million ‘FastForward Miami’ initiative.” 

Atlantic Broadband, a subsidiary of Cogeco Communications, has 246,000 TV service customers located in western Pennsylvania, Miami Beach, Maryland/Delaware, Aiken, S.C., and eastern Connecticut.