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Translation Please: How 'Managed’ Video Manages Cost Savings

In case you missed it, Cablevision’s business arm, Optimum Lightpath, is up with a “managed video service as a complete Ethernet solution for video.” On the business-services front, it’s a big deal.

What’s “managed” about it?

Here’s what’s going on. When big video originators — broadcasters, cable programmers — need to move video around a “wide area network,” meaning the fiber optic wires ringing a city, they traditionally buy fixed-size circuits from a local telco to get the video in and out of the building. To blend those circuits onto the fiber, telcos typically use a technique called SONET, which stands for synchronous optical network.

The rub of it is, they have to buy a fixed amount of capacity, even if they’re only using a portion of it.

Incumbent telcos charge for these transport services using a predictably inscrutable rate card. Port charges apply to get on and off the optical network. Then, mileage charges. And different rates apply for different types of native digital video protocols: If you’re sending in ASI, you pay differently than if you’re sending in SDI. Ditto for HD-SDI.

(“ASI,” Asynchronous Serial Interface; “SDI,” Serial Digital Interface, and “HD-SDI,” High-Definition Serial Digital Interface,” are all broadcaster-centric methods for moving uncompressed, streaming video.)

Lightpath’s alternative moves the video of big video companies around on the fiber it owns, using Ethernet. This, in and of itself, is a big change: It used to be that Ethernet and digital video didn’t get along, because Ethernet wasn’t designed to handle a continuous stream of information — like video.

Practically, what Lightpath’s work means is that video-centric companies in New York can save around 30% on transport fees, by switching to Ethernet. The savings come from not having to pay for a fixed chunk of bandwidth, from not having to pay differently for different protocols and from not having to pay for fiber-optic mileage.

Ultimately, Lightpath’s Ethernet-based approach gives big video businesses better management over the cost side of transporting their goods.

Note: As often happens in the lingo of business services, the Optimum Lightpath release bulged with unfamiliar vocabulary. “Mileage-neutral” seemed pretty straightforward, as did “flat-rate pricing.” But “dedicated Layer 2 point-to point” and “Ethernet solution for video” exemplify a few areas where it’s easy to glaze over. More on that next time.

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