Pity the cable operators. Their business is under relentless assault from existing and new competitors. Their networks are increasingly strained by the insatiable demand for bandwidth. And unlike in times past when the playbook to improve their network was well-defined, today, their modernization options are numerous, complex, and involve significant trade-offs and dependencies. At the same time, the pace of change has accelerated significantly. For example, 1.2 GHz started in 2016 and only took three years for wide deployment. Some operators are now talking about 1.8GHz, undoubtedly driven by things like turbo EPON (up to 2.5 Gb/s downstream) and 5G wireless. In the near term, operators are grappling with how to achieve 10G, which is expected to deliver 10Gb/s capacity, lower latency and improved security.

Here are just some of the technologies cable operators have to consider:

• Distributed access architecture, which itself has primarily two flavors to consider: R-PHY and R-MACPHY
• Full Duplex DOCSIS (FDX) for operators that are able to commit to an N+0 architecture
• Extended Spectrum DOCSIS (ESD) for operators that are more likely to adopt an N+small architecture
• The virtualization the CCAP core.

Just when operators are working on wrapping their arms around 10G, the vendor community already has 25G in its sights. Although there are many alternatives to deliver 10G, 25G inevitably will require more spectrum, perhaps as much as 3GHz of it. Increasing spectrum is a major undertaking for operators. It requires changes to the amplifiers and taps in the outside plant, a very costly and operationally complex undertaking. In recent time, operators made changes to the outside plants every 10 or so years. Recent industry developments are forcing them to consider significantly shorter change cycles.

And that’s not all. Recently CableLabs announced that it started working on DOCSIS 4.0, which is supposed to include FDX, ESD, and low latency, as well as other capabilities that are yet to be defined.

Sorting their way into all these options is no simple matter. Operators need to do this while maintaining a complex network and while serving customers that are ever more demanding. 

A telecom executive nicely described the challenges operators face as they modernize their networks and operating environments: 

“When you’re in a business like ours, you have to execute across a couple hundred initiatives in parallel, into multiple markets, across multiple infrastructures, with all sorts of different people. And we make our overall numbers as the sum of a thousand small numbers. It’s not a straightforward path”, said Simon Moutter, outgoing managing director, Spark (nee Telekom New Zealand).

All things being considered, it is no wonder that operators are not moving at lightning speed to evolve their networks. Their roadmap will be carefully planned, thought through, and will be driven by the need to solve real problems they face today or are likely to face in the foreseeable future. It is up to vendors to meet them where they are, to help them as they define their roadmaps by creating end-to-end solutions that solve their specific needs, while providing the guidance on tradeoffs and alternatives that will help them plan their transformation journeys.

The cable universe is shrinking.

Consolidation, competition and new viewing habits are irrevocably changing the pay TV landscape, with more contraction expected as larger deals close and smaller cable systems are snapped up by their larger peers.

But unlike years past, when deals were driven by a desire to cluster operations more efficiently, the coming consolidation wave seems sparked purely by a need to get bigger — bulking up to roll out new services more effectively and cheaply across a broader base, and to help keep rising programming costs in check. Cable operators aren’t the only ones looking for scale. AT&T completed its $48.5 billion acquisition of DirecTV in July, raising its video-subscriber tally to 26.3 million customers and vaulting the telco to the top of the list of multichannel video-programming distributors (MVPDs). Comcast, which abandoned its $67 billion pursuit of Time Warner Cable in April when it determined regulators would not sign off on the deal, is still a solid No. 2 with 22.3 million subscribers.

Charter Communications, which started the whole consolidation wave in 2014 when it began a dogged pursuit of Time Warner Cable, finally won that prize with its May agreement to purchase the 10.8 million-subscriber TWC for $78.7 billion. That deal is expected to close by the end of the year, and with Charter’s $10 billion purchase of Bright House Networks — also expected to close in December — the Stamford, Conn.-based operator will have 17.2 million customers with which to spread the operating acumen of CEO Tom Rutledge.

CATCHING THE WAVE

Charter is expected to at least look at other potential acquisitions, but others are not sitting idly by. European telecom giant Altice agreed to purchase a 70% interest in Suddenlink Communications for $9.1 billion, and has said it will use the midsized St. Louis-based cable company as a vehicle to expand its U.S. presence.

Already, Altice chairman Patrick Drahi has named Cox Communications and Cablevision Systems as potential targets. And though Cox has insisted it isn’t for sale — and there is some doubt as to whether Altice could pay Cablevision’s price — there is no doubt that further consolidation is coming.

In a recent report, MoffettNathanson principal and senior analyst Craig Moffett said possible acquisition targets could include some of the larger operators at the lower end of the top 10 — Mediacom Communications, Cable One or WideOpenWest.

“It would be foolish to dismiss the idea that any or all of them might be acquired,” Moffett wrote.

And the cable industry has a long history of acquisition. For example, only three of the Top 25 MSOs of 1985 still exist today (Cox, Cablevision and Comcast); the rest have been assumed by other entities. Five of the Top 25 of 1995 are in business today — Time Warner Cable, Comcast, Cox, Cablevision and Charter — with TWC expected to be swallowed by Charter by year-end.

Cable operators stopped growing their basic-video subscriber rolls more than a decade ago. The industry peaked at about 66.9 million total subscribers in 2001, and in 2014, it finished the year with a total of about 54 million subscribers, according to the National Cable & Telecommunications Association. Broadband, for years the profit center of the business, emerged as the subscriber leader last year — the first year that cable broadband customers exceeded video subscribers.

While that had been anticipated — and in some cases, encouraged — for years, cable operators are beginning to turn the corner on basic-video subscriber growth. The four top cable service providers have drastically reduced their customer losses over the past three years; Comcast alone has cut losses by nearly 75% since 2010.

Telcos, which had been engines of video-subscriber growth for more than a decade, began reporting losses for the first time in the second quarter. AT&T said it lost about 22,000 U-verse TV customers in the most recent quarter, while Verizon Communications saw its growth cool considerably, adding 26,000 FiOS TV customers in the period compared to 100,000 additions in the prior year.

At the same time, satellite subscriber growth has stalled — DirecTV lost 133,000 net subscribers in the second quarter, well below the 60,000 additions in the first three months of the year. No. 2 satellite company Dish Network lost 81,000 net subscribers in the second quarter, almost twice the 44,000 it lost during the previous year.

Dish Network lost about 79,000 net subscribers in 2014, compared to a gain of 1,000 in 2013.

DISRUPTING THE DISRUPTOR

As satellite- and telco-TV service stagnates, a new distribution model is disrupting TV’s early disruptor — cable operators. Over-the-top services like Sling TV, HBO Now and Sony’s PlayStation Vue have burst onto the scene with much fanfare, and pay TV operators who may have dismissed those services in the past are now scrambling to come up with their own solutions.

In the second quarter, pay TV lost its traditional growth engines — satellite TV was down 284,000 customers while telco TV providers lost 2,000 subscribers — and perennial loss leader cable cut its losses almost in half to 280,000 from 534,000 a year ago.

Indeed, pay TV subscriber growth dipped to a record low of -0.7% in the past 12 months, according to Moffett. The pay TV industry lost 566,000 subscribers in the second quarter, 76% worse than the 321,000 it lost during the same period in 2014.

With more OTT services slated to launch later this year — Verizon is expected to debut its “mobile-only” Go90 service in the late summer and other programmers are considering launching their own direct-to-consumer services — cord-cutting will likely get worse. And cable operators will likely meet the challenge by trying to add scale.

But just how many customers will migrate over remains to be seen. Years of consolidation have narrowed the number of large available properties. While there are about 660 cable operators and 5,208 cable systems in the United States, more than 80% of the nation’s 116 million TV households are represented by the top eight MVPDs.

And unlike other years when an MVPD could buy the operator below it on the list and move up several spots on the list, today the fifth-largest provider (Verizon) could could buy the next three largest distributors below it and still be stuck at No. 5 with 13.7 million customers, behind Dish Network’s 13.9 million subscribers.

To see the current and historic lists of Top 25 MVPDs, please click here.

It’s hard to think of Rogers Communications or the Canadian cable and telecom business without Phil Lind.

The company’s vice chairman and executive vice president of regulatory joined Ted Rogers 45 years ago, when Rogers’s little company had just north of 10,000 cable customers and a pair of radio stations.

In fact, it’s very hard to think of Rogers Communications ever being that small, since it has grown into a wireless, cable, telecom, broadband and media behemoth in Canada with about 29,000 employees, 9.5 million wireless customers, 2 million cable customers, 2 million broadband customers, 1.1 million wireline phone customers, 24 TV stations, 50 radio stations and more than 50 magazine titles.

DEALMAKER, TOO

Having been Ted Rogers’s copilot for four decades until the founder’s death in 2008, then continuing to lead the government relations and regulatory group since (not to mention being the eminence grise for the whole company, brokering deals, too), Lind has decided the time is now ripe to step aside. The 2012 Cable Hall of Fame inductee announced earlier this year he will give up his operational roles at the end of 2014, then working certain special projects for about three more years. He’s retaining his seat on the RCI board as well, where he is vice chairman. He’s retiring — but not leaving.

Lind joined Rogers in 1969, the same year Ted’s son Edward Rogers was born. Edward, now a Rogers board member himself and head of the Rogers family trust, which owns control of the corporation, joked before the company’s annual general meeting earlier this year he never was sure which debut was most important to his father that year — his or Lind’s.

“I began my career at Rogers 45 years ago, just after the 1968 Broadcasting Act was enacted and this commission was created,” Lind told Canadian Radio-Television and Telecommunications Commission chairman Jean-Pierre Blais at the company’s appearance during September’s TV Policy Review hearing. “Since that time, Mr. Chairman, I have had the pleasure of appearing before you and all your predecessors. I reckon that I have represented Rogers at more than 100 broadcasting hearings over the past four and a half decades.”

That’s right, Lind has appeared before every single CRTC chairman there has ever been.

There are very few people left in the business with that kind of history and institutional knowledge, or who engender the amount of love and respect which the 72-year-old Lind does. “Phil has had a passion and a love for the company that goes far beyond the average employee’s commitment to their job,” Edward Rogers said. “I’d say he shared my father’s enthusiasm for the business like few others did. You could see that kind of excitement over the years.”

Shaw Communications founder JR Shaw said: “He’s always been a good friend to everyone in this industry. He’d always reach back and help us all, because Rogers was a front-runner.”

SAW U.S. ACTION

According to those who knew Lind best and have worked with him over the decades, it was loyalty, tenacity and people skills that led to his extraordinary business successes, on both sides of the border.

While those under the age of 45 or so might not recall, Rogers Cable was once a big deal in the States and Lind was one of the premier generals in the U.S. cable wars of the 1980s, when companies went from town to town trying to win cable franchises from local town councils. The company once famously promised to plant 10,000 trees in Portland, Ore., as part of its bid to win the franchise there.

With his “Road Warriors,” the group of executives and lawyers Lind put together to identify and claim territories (yes, there were Tshirts), Lind built up a sizable U.S. cable operation in places like Minneapolis; Portland, Ore.; Orange County, Calif.; and San Antonio for Rogers in the ’80s. “It was a gold rush,” Lee Sheehy, a longtime Lind friend and one of the Minneapolis lawyers who worked on many of the Rogers franchise bids, said. Many companies devoted serious resources and various tactics to win market after market.

“It was the Wild West,” said Colin Watson, Rogers Cable’s president at the time. “There were cases of people being caught with their hands in pockets … there were some that got caught and sent to jail, as I recall, for it. Everyone wanted the same franchises, and the bidding wars were extreme. The typical M.O. was to go in and get local investors, so you had a very local face to offset the Canadian aspect of the company. That formula worked very well for us.” And for a time, Rogers was a serious American cable player.

‘THANK YOU, CANADA’

“The stories are legend about Phil’s ability to create relationships and to bring insights,” added Sheehy. It was never easy to be the Canadian, the outsider, asking local American town councils to grant a cable franchise, so Rogers was often looking for an edge. While the company was bidding for Minneapolis, the American public was consumed by the U.S.-Iranian hostage crisis, and when Canadian diplomats helped smuggle six Americans out of the country, Lind had the idea to buy a full page ad in the Minneapolis Star-Tribune which proclaimed loudly “Thank You Canada,” but kept the ad’s buyers a secret.

“Phil had the political sophistication to try and listen to what the local communities wanted. Again, I think he brought an ear that some U.S. companies didn’t, who relied more on bravado,” Sheehy continued. “Phil had a subtlety and a little bit of the Canadian ability to listen to what the customer wanted and be responsive was my experience representing the company … Somewhere along the way, I said, ‘Phil, you should be the Canadian ambassador to the United States.’”

But in the late 1980s, Ted Rogers the visionary began telling people the future of communications was in cellular phones. However, taking that road wouldn’t be cheap and in order to fund wireless in Canada, Rogers made the decision to sell the U.S. cable clusters — very much to Lind’s chagrin.

Lind still tells anyone who asks that the cable-franchise wars were the most fun he ever had in business and it “broke his heart” to have to sell the American operations, said Missy Goerner, one of those Road Warriors who began working for Rogers when it purchased the San Antonio cable system she worked for in 1981 from UA-Columbia Cablevision.

According to contemporary reports in The New York Times and Los Angeles Times, respectively, Rogers sold systems in Texas, California, Minnesota and Oregon, with a total of about 525,000 subscribers, to Paragon Cable for $1.3 billion in 1989. It then sold Maclean-Hunter cable operations with 550,000 customers in New Jersey, Michigan and Florida to Comcast in 1994 for $1.27 billion.

“But the quality of the man is — and how he was always — it was always Rogers company first, not his own personal feelings,” Goerner added. Lind worked hard to get the best deal possible for the company — a deal which very nearly fell apart thanks to a single clause in the franchise agreement with San Antonio.

Rogers had a deal to sell U.S. systems to a company which would become Paragon Cable. “They were kind of new in the cable business … so we got the top-of-the-market price, at that point,” she said. It was a multibillion- dollar deal — more than enough to help fund a telecom launch in Canada.

But there was a snag. San Antonio’s franchise agreement said that whatever the fairmarket value was of the system, the city had the option to buy it for 5% less. Rogers didn’t believe San Antonio would exercise the clause, but Lou Fox, the city manager at the time, convinced council to do it. “They could’ve cratered the entire U.S. sale,” Goerner said.

No amount of convincing and negotiation between the city and Rogers would work. And when Fox went on the radio to say he had Rogers “by the balls,” Ted Rogers was beside himself with anger. The deal looked scuttled because, seeing the battle in San Antonio, many of the other cities stopped negotiating their sales, too.

Lind was able to calm his boss down (another skill he was renowned for within Rogers) and Goerner managed to finagle one last meeting between he and Lind mere weeks before the Paragon deal was to expire.

“I said, look, give Phil one more chance to talk about this. He said, I’m going to a city manager’s meeting tomorrow in Charleston, South Carolina. He said if he wants to come talk to me, he’ll be there,” Goerner said.

‘OK, SIGN THE NAPKIN’

“Just he and Lou sat down for hours, until Phil took out a napkin, put it in front of Lou, and asked him to write down what number he had to get from Rogers in order to be willing to move forward on the transfer. Lou Fox took his pen out, and he wrote $10 million, which is what they figured it was worth to the city if they were to buy the system, and then flip it.

“Phil said ‘OK, sign the napkin.’ He signed it, Phil signed it and that napkin was what Lou took back with him to the city council — truly a napkin. He went back to the city council, and the city council approved the deal,” Goerner recalled.

The Road Warriors then fanned out across the U.S. in order to finish the rest of the franchise transfers and save Rogers’s American exit.

Lind would clearly relish playing in the U.S. cable sandbox, still. “I’d love to be in the Comcast war room right now,” he said in an interview. “There’s thousands of touch points and you have to imagine that taking care of a lot of them … I’m actually quite envious.”

At Rogers, Lind is also known as a champion of the media side of the business: he and Watson used to appear regularly — and live — on Rogers Cable 10 community access channel in the 1980s and ’90s to answer customer questions. What has become Rogers Sportsnet was his idea, he was the force behind CPAC (Canada’s C-SPAN) and he helped pioneer multicultural programming through the OMNI-TV brand.

But there’s one other important way Lind has moved those who have had the good fortune to work with him. On Canada Day in 1998, Lind suffered a significant stroke which very nearly claimed his life. He had to learn to speak, read and walk again at 56.

His fellow executives visited daily, helping with rehab, reading newspapers and keeping him informed about the business. Lind taught himself to write with his left hand and returned to work just over year later.

Lind did not slow down once he recovered. He continued to travel, do deals, lobby politicians, lead Rogers’ efforts in front of the CRTC, collect art, see his beloved Cleveland Browns (he has season tickets and was a close friend of the late Browns and Baltimore Ravens owner Art Modell) and turn up at industry events. He was even front and center on a general-session panel at this past Cable Show in Los Angeles.

While he doesn’t like talking about himself too much, he admits he set himself a goal of five more years at Rogers after his stroke, something he thought would be a stretch. It’s been 16.

The most Lind will say about his physical limitations is “it’s been a struggle sometimes” — and thankfully note

how the iPhone, something he can operate with one hand, has so dramatically improved his life. “It’s fantastic,” he has often said of the device.

“He was at a point of his life where financially, he didn’t need to come back to work,” said Edward Rogers. “But he never hesitated in coming back and was a real example for many of us — meeting the challenges that life throws at you and continuing the work that you do. I think he was an inspiration for folks around here.”

RLTV has signed a carriage pact with Buckeye CableSystem.

Under the deal, financial terms of which were not disclosed, the network aimed at those 50 and older will become available Dec. 15 to Buckeye digital basis subscribers on channel 160. At that point, RLTV will be accessible to the MSO's subscribers in Toledo, Sandusky and other areas of Ohio. Buckeye is a wholly owned subsidiary of Block Communications.

"We are honored to help deliver relevant programming to Buckeye's 50+ customers and are grateful for Buckeye's support and belief in our audience," said RLTV affiliate sales and corporate development Patrick Baldwin.

"Adding Buckeye as an affiliate partner is an opportunity to go beyond the television and serve Toledo and Sandusky's consumers with a grassroots approach," said Sara Timmins, RLTV director of distribution.

"RLTV offers unique and high-quality programming that is targeted to an audience that represents a significant segment of our country's population. We are excited to add RLTV to our programming lineup," said Jeff Abbas, Buckeye CableSystem president and general manager.

Cox Communications is getting ready to up the ante on multiple service fronts, with a particular emphasis on broadband and video. On the high-speed end, it’s already moving ahead on a plan to bring 1-Gigabit capabilities to all customers in the coming years while also weighing the path forward on a next-generation video platform. Cox will also be looking to free up precious spectrum for DOCSIS 3.1 and other services via an ambitious all-digital transition that will soon be in full swing. 

Kevin Hart, Cox’s executive vice president and chief technology officer, recently talked with Multichannel News technology editor Jeff Baumgartner about the MSO’s top priorities and an update on its key tech projects. An edited transcript follows.

SCTE DAILY: What are your top priorities for the rest of 2013 and into the start of 2014?

KH: No. 1 is our continued network transformation. We’re in the process of doubling our speeds across our footprint this year, up to 50 Mbps and 100 Mbps for our two most popular tiers. We’re also in the process of launching our Gigabit service.

No. 2 is our all-digital project — not only network readiness, but the full back office and the customer experience. There’s lots of good preparation around that with the launch coming up in the fourth quarter.

No. 3 is our future-state video, as we think about the future platform for our video framework and our transition to IP. We have two or three different trials going on around our future-state video platform.

Fourth is the enablement of Cox Business commercial sector. We’re getting very close to launching some of our new sales workflow enablement capabilities for Cox Business.

SCTE DAILY: Can you offer more detail on your future-state video platform?

KH: We’ve been very pleased with the launch of Contour — primary screen, secondary screen, the storage on the set-top box, etc. — and now we’re thinking about, what’s the next generation of that solution? We’re got a couple of things going on internally that we’ve looked at from our own development and we’re also looking at partnering with others across the industry around different trials. [Ed. note: In January, Comcast announced that it was in talks with Cox about licensing its X1 platform. At the time, Cox said X1 was one of the options it is assessing.]

SCTE DAILY: When do you expect to decide on a direction?

KH: We’re likely to have trials in the fourth quarter of this year and the first quarter of next year, [followed by] post-evaluation of different options, including some things we’re doing internally, as well as leveraging platforms like X1. We’ll make a decision on the path forward.

SCTE DAILY:For 1-Gig, you’ve already identified your initial markets — Phoenix, Las Vegas and Omaha, Neb. — for that effort. Can you get us up to speed on the progress as you look to begin market-wide deployment of Gigabit speeds by the end of 2016?

KH: This is a top priority for us at Cox. We’ve [introduced] some of our market-branding, “Gig Life,” promoting the service capability and the customer experience. We are on track for a fourth-quarter launch in Phoenix. It’s a combination of new greenfield facilities, both MDUs [multiple dwelling units] and residents within Phoenix, and also some overbuild for existing neighborhoods.

We’ve announced that Las Vegas and Omaha will follow and we haven’t announced exact time lines yet.

SCTE DAILY: In Phoenix for the overbuild component, are you looking at a fiber-to-the-home implementation, like a GPON?

KH: We’re definitely going to leverage both fiber-to-the-home as well as DOCSIS 3.1. With DOCSIS 3.1 not being market-ready yet, we will leverage solutions like GPON to enable Gigabit speeds, particularly in the greenfield builds, and particularly in the MDU [multiple dwelling unit] space.

SCTE DAILY:In Phoenix, how are you deciding where to roll out 1-Gig with fiber? Will it be everywhere or in specific parts of the network initially?

KH: Eventually, it will be everywhere, leveraging the DOCSIS 3.1 platform. Initially, based on marketing analysis and market demand, we have a Web site where we have customers signing up from a pre-registration standpoint. There are probably three or four different factors that are helping us shape the build curve.

We had huge early results in terms of customers signing up and kind of outpaced our expectations in terms of the numbers.

SCTE DAILY: Can you shed more light on Cox’s all-digital project?

KH: We’ve made a ton of progress since we talked last [in April 2014]. We’re on track for a fourth quarter market launch. We have several markets from a technical network perspective ready for the conversion. Now we’re doing our final stages of testing around the actual DTA [digital transport adapter] all-digital kits that will be sent to our customers’ homes. 

We’re on track for a fourth-quarter market launch and then we have … a very aggressive schedule to complete this in 2015 and 2016, with a very steady cadence throughout those two calendar years.

SCTE DAILY:4K and Ultra HD is still an emerging market, but where is it on Cox’s agenda?

KH: I would say it’s still an emerging piece of our products and service portfolio. I think we have the capabilities, but it’s still kind of early in the lifecycle from a consumer demand standpoint. But we are ready; it’s just timing from a market standpoint.

SCTE DAILY:What’s the status of your WiFi deployment? Is Cox considering a home-as-a-hotspot rollout in gateways deployed in customer home?

KH: We’ve been pleased with our metro WiFi deployments to date. We’ve announced that in addition to lighting up Omaha, we’re also going to light up Phoenix as part of our Gig Life rollout, and we’re currently doing a build now, and Las Vegas will follow. You’ll probably see more metro WiFi deployments in line with our Gig announcements.

We’re looking at the second SSID [service set identifier], particularly in our Cox Business footprint, and we’re still evaluating home-as-a-hotspot.