Altice USA surprised at least a few folks in November when it announced that it would deploy fiber-to-the-home across its newly acquired Cablevision footprint.
With the European operator previously signaling intentions to standardize technology across Cablevision and its other U.S. acquisition, Suddenlink, I wondered why Altice would opt to push forward with Suddenlink’s DOCSIS 3.0-powered gigabit campaign but simultaneously go with FTTH in Cablevision’s Northeast terrain.
Since Altice’s announcement, several other smaller cable operators, including Schurz Communications and Ohio's MCTV, have announced plans to eschew DOCSIS 3.1 and deploy fiber all the way to the modem.
Luckily, I was able to reach the top executive behind one of those cable companies, Robert Gessner, president of Massillon, Ohio-based MCTV, before he made a short journey to The Independent Show this week. Gessner, who runs a family-owned business started by his parents that now has 165 employees, explained the strategy as elegantly as anyone could.
MCTV, which bills itself as the leading triple-play provider in the Ohio counties of Stark and Wayne, just announced last month the launch of its “Excellerate” service, which uses a FTTH combined with passive optical network (PON) technology to provide symmetrical speeds of up to 100 Mbps.
The decision to choose FTTH over DOCSIS 3.1, he told me, was all about timing.
“We debated it for a long time,” he said. “The decision starts to some extent with our last upgrade. When we transitioned our plant from coax to HFC in 1995, we built it for television, and we built out the largest node sizes we could.”
That meant, in many instances, node-plus-four (N+4) and node-plus-five (N+5) architectures, Gessner said, meaning electronic signal noise was being amplified four or five times before it reached the end user. That architecture is incongruent with DOCSIS 3.1, which demands N+1 or N+0 network engineering.
“If we had waited five or six years and did our HFC upgrade in the early 2000s, after cable modems became ubiquitous, we would have built smaller nodes,” he explained. “If you did your HFC upgrade early, you have a lot of fiber to run.”
Looking to upgrade its 49,000 customer accounts to the next generation of high-speed internet service, MCTV “did the math,” said Gessner. "Our HFC plant isn’t old and beat up, but it is 20 years old. That’s 20 years of harsh Ohio winters. DOCSIS 3.1 needs a pretty well-maintained plant."
Knowing they had a lot of fiber to run anyway if they wanted to upgrade to DOCSIS 3.1, Gessner and his team determined that it was “marginally more expensive” to take fiber all the way to the premises.
MCTV is currently embarking on the first phase of the project, running fiber through the streets of Northeast Ohio, a task Gessner estimates will cost around $20 million.
The next phase will be the direct connection of the PON with the customer—connected to the CPE inside the home. “We don’t know how much that’s going to cost because we haven’t done enough of it,” Gessner conceded.
As it builds out its network, MCTV will continue to provide its customers with video through traditional QAM channels, gradually spreading out the costs of the upgrade’s second phase, which requires IPTV set-tops and gateways to be deployed in each customer home.
“A really big component of an FTTH network is customer premises equipment,” Gessner said. “Our coaxial network has tens of thousands of customers. If we were to switch everyone to IPTV, that would require—I don’t know—100,000 set-tops? That would be something like $20 million without any appreciable increase in revenue.”
Indeed, MCTV isn’t in any rush; he said the project will unfurl over the next 10 years, not the next four or five.
“We’re going to keep using our coax network to deliver television into the foreseeable future,” Gessner explained. “Over time, as set-tops fail, we’ll replace them with IPTV boxes.”
Meanwhile, over time, MCTV will enjoy the benefits of a fully fiber network.
“PON requires no active devices,” he noted. “There’s no batteries or generators to worry about, which makes network maintenance much less expensive. Fiber is also more robust. It doesn’t shrink and expand with temperatures. And it doesn’t conduct electricity, which means you don’t have to worry about things like lightning strikes. It doesn’t crack or tend to break. And it stands up better when a tree falls on it.”
Of course, it's all about economics. CableLabs, developer of DOCSIS, envisions the standard as a cost-effective way for cable operators to symmetrically deliver broadband speeds of 10 Gbps—perhaps higher some day—decades down the road.
And far bigger operators like Comcast and Mediacom, which have plenty of fiber in their networks, too, certainly don't think HFC is too brittle, having already committed to deploying DOCSIS 3.1 across their footprints.
And yeah, $20 million just to get ready for FTTH seems like a lot for a smaller operator like MCTV. Gessner insisted that MCTV has it covered.
“Unlike a lot of our contemporaries, we have no debt and we have not private equity to be accountable to,” he said. “We can take a longer view of this whole thing.”