MSOs

Opportunity

Cable operators across the globe, spurred by the advent of broadband, have upgraded their HFC infrastructure to support two-way communication of digital information. The wide footprint of these HFC networks presents a golden opportunity for MSOs. The first service rolled out over this new infrastructure - data using cable modems - has proved to be popular.

Consumers seeking a broadband connection have made every MSO transform itself into an ISP also. The stage is set for cable operators such as Comcast Xfinity to create revenue and profit growth by offering more value-added services like Voice-over-IP and Video-on-demand.

More importantly for cable operators, their new digital infrastructure opens up an avenue to provide remunerative business services including Virtual Private Networks, Internet Access and VoIP. Industry analysts predict that revenue from such services will outstrip revenue from traditional video services.

Challenge

To realize the potential of this market, MSOs have to move aggressively to develop a network strategy that takes into account the lead they have and the breadth of services they have to offer. The MSOs have to offer a bundle of services to be competitive in this market.

Bundles vary from the triple play of data, voice and video for residential customers to a combination of VPNs, Internet Access and VoIP for business customers. As these challenges facing network architects at MSOs come to the fore, they seem very similar to the ones facing traditional telecom carriers.

For the first movers in the MSO market, who deployed ATM in the 1990s, the challenge is similar to that of telecom carriers. How do they use the unused capacity in these networks while ensuring that the architecture can scale to support high-margin value-added services.

For other MSOs, with smaller existing data networks, the challenge of maximizing return from installed assets may not exist but the critical choice of architecture still remains.
Riverstone's solutions portfolio offers an answer to both segments of MSOs - both leading to the same ultimate answer - Ethernet and VPLS - but where they differ is the path taken.

Sweating The Installed Assets

When MSOs with large existing ATM backbone network typically seek to leverage the unused capacity in these networks. However, they soon realize that the lucrative business services markets has requirements that cannot be met by services offered by the installed ATM equipment.

For example, businesses and corporations today require large amounts of bandwidth as they seek to centralize their servers and outsource backoffice operations while simultaneously seeking to decrease communications costs by switching their voice calls from circuit switched telephone lines to VoIP among other measures.

It is clear that to satisfy this need, infrastructure solutions based on Ethernet and VPLS that combine the superior costs of the former with the future proofing and high availability characteristics of the latter, are required. VPLS allows MSOs to assemble a strong collection of services that demand different network characteristics like VoIP with low-latency from end-to-end and high availability, Internet access with high bandwidth, Virtual private networks with strong service level agreements. In addition, these new markets need service flexibility to adapt to changing service levels as the business changes.

But what about the existing installed base? That is where Riverstone's VPLS solution makes the decision for MSO network planners easy. It allows MSOs to deploy VPLS to provide the required services to the customer while continuing to transport data between service regions using the ATM backbone. An example of such a service is shown in the figure below.

In the MSO depicted above, the Riverstone VPLS solution is deployed over the HFC infrastructure and serves as the provider edge. Any VPNs that start and terminate locally are switched across the VPLS while any internet access or intra-POP traffic is transferred to the ATM backbone.

The Right Decision

For MSOs who are expanding anew, a VPLS based Ethernet infrastructure is the right choice for the same reasons explained above. The big advantage of this new infrastructure originates from its flexibility to provide all the characteristics both existing and future services need.

It can guarantee the quality of service that is essential for any offerings of video or voice, the high-availability that is critical for business VPNs and VoIP, the scalability to broaden the network across an entire service region. An example of how these networks adapt to offer new services is illustrated below.

While these technical attributes make it easy for MSOs to satisfy the needs of customers, it also offers commercial advantages that fulfill the financial goals of the MSO. It builds upon the cost effectiveness of Ethernet, provides a future proof solution that exceptional ROI and can be managed with mature solutions that ensure a low maintenance and operating expense. In summary, MSOs will find in Riverstone's solutions a confluence of technical and business benefits that are convincing.