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Forecasting Cable MSO DOCSIS 3.0 Adoption

CableLabs recently approved a preliminary specification for the DOCSIS 3.0 standard. It is the penultimate version which will allow cable MSOs to reduce bandwidth usage while improving performance and capabilities on their existing networks.

While not producing dramatic short-term changes to the on-demand video entertainment industry, the introduction of DOCSIS 3.0 will affect the developing competition between cable operators and telco TV providers, and because compliant new equipment will be required, will provide opportunities for some vendors.

The implications of this development are explored in a new Research Brief from ABI Research. "By delivering interactive IP video to the home over DOCSIS, cable operators shift bandwidth demand on their networks to take advantage of the innovative features offered by IP video," says principal analyst Michael Arden. "CableLabs' release of this nearly-final specification will allow vendors to start developing compatible equipment."

The transition to DOCSIS 3.0 will take place in two phases. Cable Modem Termination System (CMTS) equipment in the network must be replaced before the service can be offered. Later -- partly by a process of natural replacement -- over time the cable modems and set-top boxes in consumers' homes will also change to DOCSIS 3.0-compatible equipment, often residential gateways supporting triple-play services.

"2007 should see the first volume shipments of DOCSIS 3.0-compliant network equipment," says Arden. "Harmonic, Motorola, and Cisco, already in the field with pre-3.0 designs, will certainly be active. ABI Research expects that penetration of DOCSIS 3.0 will reach nearly 60 percent for in-use CMTS in 2011. Penetration will be slower for the larger installed base of CPE, reaching just under 40 percent in 2011."

Outside of North America, much of the interest in DOCSIS 3.0 has come from Asia. (Motorola has established a DOCSIS 3.0 research center in Singapore.) Eventually, demand for more advanced video services in Europe will spark activity there too.

Other solutions for improving bandwidth usage efficiency are being developed, but ABI Research does not believe they will gain serious traction compared to DOCSIS 3.0. On the other hand, competition from telco TV providers -- if it develops -- may spur the cable operators to accelerate the DOCSIS 3.0 transition process.

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