McKinney (Source: CableLabs)
with Phil McKinney, President and CEO of CableLabs
Former Hewlett-Packard CTO Phil McKinney was hired as president and CEO of the research consortium CableLabs 28 months ago to pick up the pace of innovation in the cable industry.
A self-described "innovation guy," McKinney came in with a mandate from cable CEOs to accelerate product cycles across DOCSIS, Wi-Fi, set-tops, 4K and other industry initiatives. And McKinney seems to be accomplishing the mission of turning the cable industry into something at least vaguely familiar with the torrid evolutionary pace of Silicon Valley
On the occasion of his third CES as CableLabs chief, FierceCable caught up with McKinney in Las Vegas and discussed the broad topic of cable industry innovation.
FierceCable: So did you join the cable industry during a period of abject panic?
Phil McKinney: What they recognized was that the pace of innovation, particularly in the customers' minds with things like the iPhone and how fast devices were cycling, the cable industry got itself pinned into this perspective of being old and stodgy and not cool. Cable has been around for a long time, and people have a long history with it. This isn't a thing we're you're going to come in, click your heels and change the whole perception of the industry. When I came in June 2012, you had things like Google Fiber ramping up. I looked at the innovation rate in the industry and it was incredibly slow. Take DOCSIS, for instance. Every generation--1.0, 1.1, 2.0, 3.--averaged four and a half years between new generations. That's three Moore's Law cycles. I come from Silicon Valley, and you're dead if you miss one Moore's Law cycle. So that's when we kicked off DOCSIS 3.1. You could call it brilliance or stupidity, but I stood up and made the proclamation that we'd do DOCSIS 3.1 in two and a half years. And the industry just crucified me. They were like, 'Ah, he's the new guy … he doesn't quite understand.'
FC: It seems like the cable industry has become a little more innovative, too. Comcast seems to view itself as a technology company now, for example.
McKinney: You do have the multiyear investment in X1. You look at the aggressiveness of Cox, Suddenlink, GCI and others are showing for gigabit services today. And you look at some of our European members--some of them have overbuilt with fiber already. It isn't like fiber is coming--fiber is here. You look at what's happening in other parts of the world, whether it be in developing countries or in very, very large nations. We now have members in China, Taiwan and Japan, for example, all with different issues and challenges, but all focusing on how do I pick up my pace at which I can identify, adopt and deploy to my customers the latest and greatest. And part of doing that isn't popping a flag up and saying I'm going to be more innovative and faster, you have to have a certain set of structures in place. You have to have leadership that understands innovation. You have to have the law of patience--it takes longer than you think, and you've got to be willing to stick it out. You've got to have resources to invest.
FC: The latter seems to be the thing that breaks a lot of will.
McKinney: Well, yeah, it does. The innovation game has what we call "The Rule of 18." I can get any executive interested in some new shiny object, they get all pumped up, and they go, 'Oh yeah, we'll find money,' and they fund it. You get to the first budget cycle for the next year and they'll continue to fund it. That next budget cycle, if that thing isn't shipping and generating a billion dollars, they kill it. They don't have the patience to stick it out.
FC: How does this apply to the cable industry?
McKinney: Well, the cable industry doesn't shy away from writing big checks. Over the last 10 years, the cable industry has spent $200 billion just on the network in the U.S. It's the largest privately funded real estate project in the history of the United States. You can't just say I ran out of capacity on Friday, so I'm going to put more capacity in and make it available on Monday. The planning cycles are different. You have to dig ditches, you have to lay fiber, you have to string fiber on the pole, you have to deploy new services. That's why the cable industry is on a three-year planning cycle.
FC: So now that it looks like DOCSIS 3.1 is getting close to deployment, what's the next big heavy lift for CableLabs?
McKinney: DOCSIS today isn't even our largest R&D spend. The specification is done. Now we get into interops and device certification. We have the second interop for DOCSIS coming in a couple of weeks. All the vendors come to CableLabs, we'll plug them in together and ask, 'Will this device work with this other vendor's device?' and all those other kinds of things. All the members are anxious for their trials to begin. The key for CableLabs is interoperability, so we can get that universal scale and overall reliability of the services that are built upon that platform.
FC: So what else are you focused on besides DOCSIS?
McKinney: Wi-Fi in particular is becoming critical. If you look at what's going on inside customers' homes. In the cable industry, we have over 6 million public access points available across the U.S. Cable is the largest provider of public Wi-Fi in the United States. If you look at the total amount of wireless data that's transported--more goes over cable-enabled Wi-Fi than even over cellular networks.
FC: Why is Wi-Fi such a focus right now for MSOs?
McKinney: Consumers want to take their broadband with them. They don't want their broadband services to stop at the front door. And when you look at customer satisfaction levels, you look at churn rates, you see repeatedly that if customers are users of Wi-Fi outside the home, their satisfaction is higher overall.
FC: Could this be a game-changer for TV Everywhere?
McKinney: Wi-Fi is what we call periodic service. It's not ubiquitous coverage. If I'm in my car, and I'm driving down the street, and I'm expecting my kids to stream video or music, whether it's YouTube or anything else, you're not going to have that because of the handoff between access points.
FC: When will that technical limitation be overcome?
McKinney: Next-generation wireless, which is what we call carrier-grade Wi-Fi, does these handoffs, which is one option. The other option is LTE unlicensed. Take the LTE technology that is used in cell phones today for offering 4G services, then run it in the unlicensed spectrum. LTE is designed for ubiquitous coverage--good system speeds over wide areas, so I can do hand-offs. But there's lots of complications to make that happen--that's three, four, five years out. Today, what we're focusing on, is when you connect to Wi-Fi, you get the speed that you really want. And to also have the Wi-Fi be where you really want it--work, parks, shopping malls. It's not about doing a replacement of cellular, where I'm offering coverage everywhere. It's strategic placements.
FC: Can you talk about the R&D CableLabs is undertaking in regard to 4K?
McKinney: We do a lot of what we call user quality perception testing. There's all kinds of science on what makes a good image. But the human eye and the human brain is not easily quantifiable in that context. So we do full isolation compliance testing where we bring in random consumers. We also deal with compression technologies cable operators use when they're delivering 4K content. We're trying to find what is it that is going to be the trigger point where consumers say, 'I gotta have 4K.' And the work today is also on high dynamic range, not just number of pixels. We're color mastering video now to high dynamic range for human perception testing.
FC: Where do you get 4K content for testing?
McKinney: We shoot our own 4K. We bring in cinematographers, film students. We have our own Red cameras. We shoot things like the balloon festival in Colorado. Then we make that video available for free as part of test content. But we also make it available to consumers who have new TVs and nothing to watch on them.