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Cable MSOs Will Move to IP When Ready

Operators of cable MSO networks are scrambling to deploy new video services to counteract IP-based offerings now being launched by incumbent telcos, but they are likely to stop short of moving to all-IP networks in the near term, according to a major new report from Heavy Reading.

"MSOs have no near-term plans to swap out their existing infrastructure to adopt end-to-end IP, nor is this type of move immediately necessary," notes Sterling Perrin, Senior Analyst with Heavy Reading and author of the report. "In the near term, the MSOs plan to mimic the interesting features of IPTV using their existing MPEG/QAM networks."

Perrin adds, however, that switched digital video (SDV) could be a precursor to an MSO move to an end-to-end IP network � once SDV proves to be able to deliver quality equal to that offered now by conventional cable networks. "Cable end-to-end IPTV would require the final large step of replacing currently installed cable set-top boxes with IP STBs," he says. "The rest of the network is moving to IP already."

Key findings of 'Cable Next-Gen Video Plans and the Future of IP' include the following:

MSOs will leverage IP technology (and vendors) to expand their reach beyond the TV and set-top box as they branch into new areas, including delivery of content to mobile devices and to PCs. IP is well entrenched in MSO aggregation and core networks, but non-TV video service will likely be the first beachhead of IP in the access network � where preserving traffic in an IP form and building on the enormous industry support for IP (meaning lower costs) makes sense.

MSOs are facing a spectrum crunch as they look to next-generation services to compete with both satellite and the telcos, but the situation is not dire. Cable executives interviewed for this report insist they have plenty of unused capacity in their networks. The efforts and innovation of the next three to five years will center around how best to tap that unused capacity.

Deployment of SDV, when it does happen, will not necessarily boost sales of optical transport equipment. SDV is really about doing more with the same � i.e., boosting the number of video channels available to subscribers without adding any new capacity to the network. The migration will likely be similar to that for VOD, which by its switched nature has allowed MSOs to ratchet up programming choices without having to dedicate much additional bandwidth (if any) to it.

The key focus in VOD for the 2006-2008 timeframe will be on making money from on-demand programming services by selling on-demand to advertisers. VOD is not about the killer technology right now, or even the killer application � it's about building the killer business model for profiting in the very nascent on-demand sector.

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