Comcast Starting Digital Conversion

Comcast has started the process of converting their analog subscribers to digital. It plans to offer free digital terminal adapters (DTAs) capable of supporting video on demand. Comcast will also give existing digital customers up to two DTAs at no additional cost. The company is charging $1.99 for each DTA a customer wants above that limit.

It has been clear that the cable analog subscribers are those that are most likely to move to Telco IPTV services. Cable subscribers that are considering a digital service must bring in a set-top box. That is a natural point to consider moving from cable to satellite or Telco IPTV services.
Comcast will reduce the likelihood that it will lose customers by converting them to digital with these low cost adapters.

Comcast Rolling Out DOCSIS 3.0

A Light Reading article states Comcast is introducing DOCSIS 3.0 cable modem services in the greater Boston area, in New Jersey, as well as in Minneapolis-St. Paul, where it was originally introduced. This service will be available in three packages:

• Extreme 50 at 50 Mbps downstream for $139.95 per month


• Ultra tier at 22 Mbps downstream for $62.95 per month
  
• Deluxe 50 tier at 50 Mbps downstream targeted to business customers runs $189.95 per month and includes static IP addresses

Comcast said it plans to roll out Docsis 3.0 to more than 10 markets and nearly 10 million homes and businesses in the next several months -- equal to about 20 percent of its U.S. cable footprint. It expects to support Docsis 3.0 on all of its systems by mid-2010

Comcast said that Docsis 3.0 will enable it to offer speeds in excess of 160 Mbps further but hasnot specified when it would launch services with speeds higher than 50 Mbps.

Comcast is now using Docsis 3.0 to compete against Verizon's FiOS fiber service, which is where it is at a competitive disadvantage. These 50 Mbps services should help, but Comcast's pricing is high. You can get 20 Mbps downstream on FiOS for $57.99 and 50 Mbps downstream for $144.95. If I had the choice, I would choose fiber; however existing customers may find Comcast's pricing close enough to keep them from changing to Verizon.

Comcast Defines Net Neutrality

Light Reading has published an article detailing Comcast's plans for providing net neutrality to its broadband customers. Its approach is based on throttling back the performance of the service to users that habitually use large amounts of bandwidth.

Comcast will continuously monitor aggregate traffic usage data for individual network segments. If overall upstream or downstream usage exceeds a predetermined level on a segment, the software then determines which customers are using a disproportionate share of the bandwidth. If certain subscribers are the source of high volumes of network traffic during those customers temporarily will be assigned a lower priority status.

This approach seems to be a blunt tool. Why penalize customers as the first line of defense. Each application has different response time requirements, why not manage traffic to maintain response times within these limits and go after high volume users only when these techniques cannot cope with the loads.

This is a measure of the confusion around this issue. The FCC has not shown that it understands the issue or that it is capable of doing any more than responding to political heat. Hopefully, it will get sorted out over time.

Comcast to Limit Internet TV

Light Reading published and article describing that Comcast will impose a limit of 250 gigabytes per month starting October 1. This threshold will apply to less than 1 percent of its high speed Internet subscribers, since the median residential usage is 2 to 3 Gbytes per month.

This limit seems reasonable for the web browser, even the person who uses a lot of Youtube. However, this limit will permit only about 2 hours a day of HD TV viewing. This means that Comcast is limiting the ability of its high speed data to access over the top TV services that compete with its cable service. This seems to me to be anti competitive. It will be interesting to see how the FCC reacts to this, especially as Internet TV becomes more popular.

FCC Orders Comcast to End Discriminatory Traffic Management

The U.S. FCC required Comcast to end its traffic management practices that discriminated against peer-to-peer traffic and BitTorrent in particular. The company has 30 days to:

• Disclose the details of its discriminatory traffic management practices to the Commission
• Submit a compliance plan describing how it intends to stop these discriminatory management practices by the end of the year
• Disclose to customers and the Commission the traffic management practices that will replace current practices

This is an important aspect of the Net Neutrality argument. I believe that the crux of this issue is that broadband operators must take an even handed approach to how they manage traffic. They should not use these techniques to play favorites or to improve their own market position.

Comcast's new Addressable Advertising Trial

Comcast is preparing a second and larger trial of its addressable advertising technology that will include 8,000 homes in the Baltimore area. This technology provides the ability for the set-top box to select the most appropriate of a group of ads that are provided for a particular spot based on a demographic profile of the home.

Comcast appears to be serious about this form of targeted advertising to blunt a key advantage of IPTV systems. IPTV has more flexibility since it is not limited by the spectrum limitations that the cable systems have to face.

Comcast's Targeted Ads

Light Reading published an article describing trials of targeted ad technologies that Comcast is running. Comcast is using technology from OpenTV that sends four ads to the set-top box, which selects which ad will be shown to the viewer based on anonymous demographic data.

This is an interesting approach that fits the spectrum limitations of a cable network. A telco IPTV network can use a similar approach without a limit on the number of ad choices. This is another way that cable companies are developing technologies to address advantages of IPTV deliver.

Comcast Introduces 50mbps DOCSIS 3.0

Comcast has introduced a 50 mbps DOCSSIS 3.0 broadband data service in the Minneapolis-St. Paul region. The service supports 50 mbps downstream and 5 mbps upstream. It is using Cisco CMTS systems for this service.

This rollout is typical of how DOCSIS 3.0 services will be rolled out. DOCSIS 3.0 systems are still going through CableLab certification. The rollout of DOCSIS 3.0 services will be limited until that takes place. DOCSIS 3.0 services are likely to be high priced premium services designed to establish market leadership rather than a mass market service in the early stages.

Comcast's Technology Strategy

Light Reading has published an article that outlines Comcast's IPTV strategy. Comcast is upgrading its network to provide more capacity for digital and data services. Its technology strategy focus on freeing up spectrum and include:

• Wide deployment of switched digital
• Improvements in MPEG-2 encoding efficiency
• Analog reclamation, including the possibility of going all digital before the end of 2006

Comcast currently has nearly two-thirds of its video subscribers using digital services.

Comcast also plans to deploy DOCSIS 3.0 in order to offer very high speed data services.

This program will help Comcast compete better with satellite and IPTV services. It needs to use most of this reclaimed spectrum to increase the number of HD channels that it offers. HD is a strong requirement in the U.S. and Comcast is behind both satellite and IPTV services in its ability to offer HD today.

Comcast to Start DOCSIS 3.0 Deployment

Comcast plans to have DOCSIS 3.0 cable modem technology available to about 20 percent of its subscribers by the end of 2008. Comcast is looking to deliver video content to TV's using this data technology.

However, the initial DOCSIS 3.0 deployment will increase speeds only in the downstream direction. It appearts that DOCSIS 3.0 equpment that supports higher speeds in the uupstream direction will not be available at that time.

This is a move that ATT will have to watch closely due to the limited bandwidth available from its VDSL approach. Verizon's fiber based FiOS network should be able to compete nicely with DOCSIS 3.0 without much difficulty.

The good news for ATT is that the initial deployment is limited in both scope and function. My guess is that Comcast will create a premium, higher priced service, based on DOCSIS 3.0. If Comcast follows such a conservative strategy, ATT will have some time to adjust its strategy to be competitive with this new cable technology.

Comcast to Expand Data Offerings

Comcast, the large U.S. cable provider, is planning to offer a sub 1 Mbps data service as well as a higher speed DOCSIS 3.0 service at speeds in excess of 200 Mbps. The company's current service offers a maximum bandwidth of 8 Mbps or 16 Mbps.

Comcast plans to trial these services before the end of 2007 and to start rolling them out commercially in 2008.

The U.S. cable companies have been losing ground against the telco broadband services. Assuming Comcast prices these new services competitively, these two new services should help it reverse that trend. The telco ADSL service have been priced below the cable modem services. An entry level cable service at a low price (say $10/month) should prove attractive to many users. On the other hand a high speed service at 100 or 200 Mbps should help Comcast against the FiOS FTTP service. The U.S. cable companies will clearly do what they need to to remain competitive with their telco competitors.

Comcast Video Interface

Comcast has introduced an interface for selecting broadcast and on demand content using video thumbnails that show the content. It is using this interface at selected locations in the Midwest and the South. It plans to bring this video interface to Philadelphia by the end of this year.

This is another counter move against the TelcoTV services, especially the Microsoft IPTV Edition software. This sounds like a good move on Comcast's part but is being deployed over a significant period of time. This will give both ATT and Verizon time to respond in most of their territories.

U.S. Cable Upgrades Set-top Boxes

In the U.S., Comcast, Cox, and Time Warner are adopting set-top boxes that support Docsis Set-top Gateway (DSG) technology and OpenCable Application Platform (OCAP) middleware.

DSG uses DOCSIS cable modem technolgoy for out-of-band video signaling. It enables cable operators to send and receive data from subscriber set-top boxes that include electronic program guides, emergency alerts, and downloadable conditional access.

The OCAP middleware provides a standard interface that can support common third party applications across multiple set-top boxes and across multiple cable operators.

DSG and OCAP bring many of the advantages of IPTV to the cable companies. The cable companies will slowly deploy this technology, using it mainly to support new digital subscribers. It is quite unlikely that they will make a wholesale swap out. This means that the IPTV networks will continue to have significant technical advantages over cable networks in terms of deployed capability.