CEOs: Quality is job one

Wed, 06/25/2008 - 9:10am
Brian Santo

Cable CTOs and cable CEOs are remarkably of one mind that the key issue for cable is product quality and improving customer service. Which makes it all the more remarkable how cable CEOs and cable CTOs appear to have wildly divergent priorities with few, if any, points of intersection, at least as far as the conversations ranged on Wednesday’s panel discussions.

Given the forum (Cable-Tec Expo and an audience of engineers), you’d expect cable executives on the CEO panel to tout the potential of some of the industry’s more innovative new technologies – DOCSIS 3.0, perhaps, or fiber deep architectures, or bandwidth expanders, or switched digital video, or interactive advertising/Canoe Ventures, or tru2way.

And they did mention some of those things as the sorts of things that will be implemented over the next few years or so. Comcast COO Steve Burke allowed that Canoe is essential – “no advertiser wants to deal with six or seven operators” – and Charter CEO Neil Smit said tru2way is a necessity – “we have to have a unified platform.”

But Burke said Comcast is “laser-focused” on reliability, concentrating on node health and on video quality.

“Five years ago the question was: Do we do any status monitoring? It didn’t pay. If things went right 98 percent of the time, everything was okay.”

Now the numbers go the other way – with 25 million subscribers and 2 percent errors in all the services Comcast provides compound, to the point where the company is taking 200 million phone calls a year and engaging in 10 million truck rolls. It’s just not sustainable, and the company intends to get to five 9s – 99.999 percent reliability.

Smit agreed that reliability is an essential goal. “People love our products. We can’t give them a reason to leave.” Later he added, “In a competitive environment, customer service will make a difference.”

The emphasis for cable is going to be on getting better at what it does, and will be for the next 18 months.

Comcast CTO Tony Werner said that Comcast is on the second step of a three-step plan to 1) simulcast in analog and digital, take back part of the basic tier and reclaim 250- to 300 MHz, and 3) gradually make analog go away entirely.

But the CTOs are still focusing on the big challenges the industry has been talking about for some time: high-definition; breaking video, voice, data, and eventually wireless out of silos and converging them – from both the infrastructure and service standpoints; getting tru2way going; managing bandwidth not only on the access network but in the core network too; rolling out DOCSIS 3.0.

DOCSIS 3.0 is going to have a different place in each operator’s hierarchy of priorities.

Cox CTO Chris Bowick said Cox will launch 3.0 in some markets starting in the third quarter, mostly in places where competition demands it … In other words, where Verizon is installing FiOS and perhaps where AT&T is installing U-verse.

“But there’s no need to launch 3.0 ubiquitously,” Bowick said. We will roll it out in a very targeted manner this year and next. Our plan for the next five years calls for DOCSIS 3.0 across our footprint.

Werner declared Comcast bullish on 3.0 and reiterated the company plans to introduce it in 20 percent of its footprint by the end of 2008.

DOCSIS 3.0 allows for four channels to be bonded to create an aggregate maximum of 160 Mbps on the downstream, but no one seems to think that’s necessary.

Bowick said bonding two channels “will probably do it for us. Maybe three.”

Comcast is testing a 50 Mbps tier in Minneapolis; that’s probably what Comcast will offer elsewhere, and that will probably require no more than three-channel bonding, Werner said.

When it comes to buying bandwidth, neither Cox nor Comcast is interested at all in GPON. Cable will certainly run fiber deeper, in the form of node splits and other extensions, but the HFC network will remain, Bowick estimated, “long after I’m gone.”

Moving back to the CEOs, Burke said Comcast’s two choices for bandwidth management are deploying more switched digital video capability, and analog bandwidth reclamation, and it will be pushing the latter for the next few months. Once the industry gets past the digital transition, then it will concentrate on other things.

The digital transition, which has to be completed by Feb. 19, 2009, should be an opportunity. Not everyone is getting coupons for converter boxes; of the ones who do, not everyone is redeeming them; of those, few are also getting an appropriate antenna, Burke explained. A good percentage of people now getting only broadcast TV may be ready to sign up with a pay TV provider, and cable offers the best value proposition.

It sounds as though nothing will be happening with WiMAX – at least from the cable industry’s perspective – until Sprint’s acquisition of Clearwire receives regulatory approval. After that, Comcast’s Burke said, “We can roll out a market in six to twelve months.”

The telcos’ upgrades to LTE – their rough equivalent to WiMAX – might lag cable’s move to WiMAX by as much as two to three years.

Burke compared that to the advantage cable had when it was first to introduce broadband, allowing cable to grab a 70 to 80 percent market share. That’s a great case, he said, for moving as quickly as possible on WiMAX.

Asked about further consolidation in the cable industry, Burke and Smit teamed to explain that consolidation thus far was about building clusters, and the major operators have successfully built their clusters. Further consolidation was possible, but it would most likely be for different reasons.

As for the economy, cable isn’t recession-proof, but it tends to be recession-immune, Burke explained. Comcast is planning for this recession to extend through 2009.

More Broadband Direct:

• CEOs: Quality is job one

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• Survey: P2P sucking up 44% of bandwidth

• Broadband Briefs for 6/25/08



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