Setting an Over-the-Top Battle Plan

Aside from the obvious competitive threat, over-the-top video presents a bit of a capacity quandary for cable broadband networks. But as more and more services come online and Internet video becomes even more popular, cable operators will not only be searching for ways to better manage their bandwidth, but to find new revenue streams to mine from their networks. One way is by making the network more efficient by essentially moving more and more functionality to the cloud. Senior finance editor Mike Farrell spoke with networking equipment maker Juniper’s chief architect for cable MSO Networks Andrew Smith about what the future holds. Here are some key points.

MCN: There are at least four OTT services expected to come out this year. And if they are successful, there’ll be 20 more behind them. Could this present a capacity issue for cable broadband networks?

Andrew Smith: We think it’s important for cable operators to start thinking of the network a little bit differently.

In many ways, DOCSIS or data services are seen as just another channel in the lineup. We think that kind of thinking needs to shift. DOCSIS is the lineup; everything is going to ride over IP. In terms of how operators approach the design of the network, operating the network, how they build the network, IP is going to come to the front. That is a little bit of a change for some cable operators.

If we take this approach of data-first, DOCSIS-first, that manifests a number of other changes in how the network is built. We want to get away from building the networks in fixed units. We can see a clear path in the work we’re doing in the virtualized space.

That’s been a goal for cable for a long time: an access layer where everything that is delivered to that home is IP, not distinct downstream channels for distinct services. That’s key, because it brings with it enormous benefits in terms of efficiency, multiplexing, the cost per bit would drop considerably.

If the perception, or the positioning, of the network in the cable industry is IP-first, then I think we get a tremendous amount of efficiency and gain in how these future OTT services are delivered.

We’re not advocating that cable totally rip out everything that is deployed today. That’s not needed and it wouldn’t be feasible. We want to make sure the investments from now going forward are compatible with the all-IP last mile.

MCN: Going all last-mile IP would improve quality of service for video, correct?

AS: That’s certainly one angle of it. The quality of service is one of the things that is going to matter most. If we really go towards this all-packet, lastmile [approach], we should end up with a statistical surplus for the first time.

When you packet-switch data, just by virtue of statistical multiplexing, you can actually get more users or more experiences across a set amount of bandwidth. Because the last mile of cable has always been a bit artificially constrained in its capacity, we’ve never really been able to take advantage. As we grow the packet capability of the last mile that should really improve the quality of service of over-the-top.

The other angle, on the other end of the network, Internet peering points and data-center peering points, we’re finding in many ways interfaces that run at capacity are becoming the new normal. On the other end of the network we see a lot of congestion.

We think there may be an opportunity for cable to construct a new bundle model that is a more file-driven broadband service.

We’d like to see a bundle for broadband, such that maybe the cable company offers me a service where my home firewall is virtually in the cloud, or my file scanner or storage or any other services are done on the MSO side of the wire that goes into my house. There is a certain amount of portability with that.

MCN: What are the implications for generating new revenue from the broadband pipe?

AS: We think that the new cable bundle may include services on broadband that aren’t just a simple default path. Forever, Internet services delivered over cable have been about following a packet as quickly as possible.

One of the big benefits coming out of the cloud initiatives is something called NFV, or network functions virtualization, the use of cloud technology to build packet services that are much more versatile or revenue-building.

Broadband from a cable operator may include a number of add-ons [based in the network] that add value to the packets that customers are consuming or producing. That may be a factor in constructing a new type of cable bundle. That can not only help the revenue side, but also help deliver the OTT stuff better.

For example, if you have a router in your home today, that can get eliminated. That function can be routed to the cloud. You can have some degree of cache or Net Nanny or virus-scanning security. There are a number of services that can be built with NFV.