Are we prepared for bandwidth growth?

Analyzing the 50% Growth Rate of Data

Author: Drew Kempen, Solution Director - Strategy & Consulting 

Since the inception of consumer data services, history has shown that a 50% data growth CAGR on a year-over-year basis is seen. At least when averaged out over that time period. That essentially breaks down to a doubling of traffic usage every 18 months and corresponds with Nielsen’s Law (Nielsen, 1998). This continual growth rate presents a significant challenge for operators who continue to need to migrate and scale their networks. One would think that a provider that provisions their network for 50% utilization of available capacity would be smooth sailing for awhile.  In relative terms, that may be correct but it still means you may be at 100% utilization in just 18 short months. The network never stops growing.

Much of this growth over the past decade has been the gradual transition of consumers to Over-the-top streaming services. Companies like Netflix, Hulu, Amazon, YouTube and now SlingTV and DirectTV-Now have brought an entirely new experience to the subscriber. In addition, more and more data moves to the cloud. Information once stored on disks and hard drives such as video, pictures, data files, and backups are now becoming common cloud operations consuming larger amounts of downstream and upstream bandwidth. As people continue to migrate to this method of IP-delivered video, this growth trend of data usage will continue. 

One must ask the question however, will this ever slow down, or will it speed up? Many operators have a difficult time planning past 18 months. For those who are trying to be proactive, they are probably basing their growth on a 50% CAGR. Others, however, are being extremely proactive by rolling out 1 GB service initiatives today. Much debate has been had over the practicality of a 1 GB service. Other than marketing, what is the true need?  When will we really ‘need’ that much pipeline. 

At the doorstep is 4K and HDR technologies. The typical streams for these technologies can range from as low as 15 MBPS to over 30 MBPS and varies based on if it is true 4K, frames per second, and compression technologies. However, even at worst case and with a number of simultaneous streams, a household may only be pulling 100-200MB of traffic.  Certainly a hog on the aggregate bandwidth, but barely a dent in a 1 GB service. The evolution and adoption of these services via IP certainly seems to fit well into the 50% growth CAGR of data when looking at a 5-10 year period. 

For example: Assume that the peak utilization of data divided by the amount of subscribers is in the 2-3MB range today. This is certainly on the high side for most operators. At a 50% CAGR, this is how that average grows (shown in kbps per sub on average). 

2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
2000	3000	4500	6125	10125	15188	22781	34172	51258	76877

This growth trend and curve fits nicely with the 50% CAGR model that we have seen. As the big push to streaming services carried that curve for the last decade, it will continue to grow by adding additional subscribers as well as the resolution quality of the video advance. 

What could change the model?

There are some reasons for a concern of a disruption of this model. All of this growth has revolved around one thing that has remained somewhat unchanged. The viewpoint of all of these screens was fixed. It was a rectangle. While size does matter in the ABR world, it is still a small viewing window relegated to the size and shape of televisions and devices.  Virtual reality is changing that model. That small window into life now becomes a full 360 viewpoint. 

If you have been to CES the past few years, you have seen the rapid adoption and development of VR technology. At first, it seemed interesting but gimmicky and far from being useful. Then it looked like the next revolution for gaming. Now it looks like the next revolution for video. Today, VR is addictive and immersive. However, content is limited and video quality is far from SD, much less HD. However, the long-term end-game of VR is exactly that. A virtual replication of reality. A 360-degree view that has the same resolution as the human eye is capable. Now, we are a ways from being able to replicate that from a screen and camera standpoint; but the resolution we can achieve today is impressive. 

There is a great article to gather more information on this referenced below where the author points out that a VR stream in 4k would use approximately 300 MBPS (Begole, 2016). That is with some pretty hefty resolution. They also do the math that a 5.2GB stream would be required to come close to replicating the human eye experience. While we may be decades from a human eye experience, 4k VR is certainly realistically achievable in the next 5 years. This would be a truly disruptive service to the traditional 50% CAGR model if these capabilities mature and the demand increases. 

Before you discount the potential of this, consider this: In the 2016 Olympic games, some of the content was made available in VR. By 2020, a much larger amount of Olympic programing will be available in VR and much better quality. Now imagine being able to watch an Olympic event from a stadium seat or floor-side viewpoint in 360 HD. Then imagine watching a basketball game from the scoring table or Saturday night live as if you were sitting in the audience. Perhaps you will be able to buy a ticket to a Broadway show and never leave your living room. The applications and potential are awesome for consumers and stomach churning for network planners! 

Will VR take off? Will people want to wear a headset? Keep in mind that VR is essentially in the ‘Nintendo NES’ phase of its technology cycle. It is going to get a whole lot better and easier to use. 

All of the sudden, a 1 GB service doesn’t just seem like a marketing ploy any longer.  Thankfully, none of this is going to happen overnight and there will be visible signs of when it will happen and the adaptation will be gradual. It is worth noting however that there are signs today that need to be taken into account. We can already see the potential that this will have on the horizon. Do the network enhancements and investments you are making today leave room for migration, scaling and adaptation for this possible disruption? 

It will be interesting to see what happens with VR and if it will disrupt the growth model most network migration plans are accounting for.

CCI can help you ‘Future-proof’ the Network

Future-proofing is in many ways an inaccurate term. Future-resistant is a better term as you never know exactly what will happen in the future. However, the ability to plan for multiple scenarios exists today. This planning is not easy. There are multiple dynamics and metrics to consider that are not easy to analyze. It can take a lot of time and resources that many operators do not have, particularly the mid to smaller operators. For a traditional cable operator, it is all too easy to fall into the fix it when it breaks or shows signs of breaking mentality. 

Fortunately, CCI has the expertise, experience, and tools to help you plan across-the-network. From analyzing growth trends and service migration to architecture migrations.  From the core/route/transport aspect to DOCSIS, HFC, and FTTx technologies. 

For more information, reach out to Drew via Twitter at @drewkempen

References

Nielsen, J. 1998. Nielsen’s Law of Internet Bandwidth. Retrieved January 25^th from www.nngroup.com.

Begole, B. 2016. Why the Internet Pipes will burst when VR takes off. Retrieved January 17^th from www.forbes.com.

Market Demand Determines Network Technologies

Why the ‘Cable’ Market is Primed for Opportunity

Author: Drew Kempen, Consulting Systems Engineer

Drew Kempen, CSE

Seemingly overnight, there is a major buzz around the cable market.  What is causing this buzz in a technology area that was apparently in serious peril not too long ago?  To understand this, one must understand cable history, the overall market and technology. 

Cable had seen arguably its largest growth period in the late 90’s to mid-2000s. The introduction of two-way internet capable systems in 1996, along with the demand and transition to HD content in the 2000s sparked this growth.  A massive undertaking of pushing fiber deep, building next gen architectures (anything less than N+6), and expanding bandwidth drove the network adaptation.  

Subscribers, all of the sudden, were being thrust into the digital age.  Analog began its slow death—but still played a part as a service.  HD content slowly became the primary customer choice and major differentiator.  Cable could offer much better speeds than the previous dial-up and DSL models.  The future looked bright.  

To account for growth in HSD/Data demand, cable introduced DOCSIS 3.0. This allowed for more than one channel per service group to be bonded together— offering a larger pipe and keeping service group sizes larger.  Most cable operators then sat back, made the necessary changes, went into operational mode, and watched customers roll in.  

But as with any technology industry, ‘promising futures’ arrive and are surpassed very quickly…

Fast forward to 2007 and the financial crisis.  The market crash hit technology and cable operators particularly hard.  Virtually everything regarding investment into the system was put on hold.  The ‘necessity’ to grow HD content from 200 channels to 300 channels began to seem…ridiculous.  The seemingly infinite amount of new channels popping up daily during the HD era disappeared overnight.  Cable went into a defensive mode.  Maintain and recoup.  Innovation stopped, plant investment halted, and growth became stagnant. 

This in turn affected the equipment and partner side.  Vendors scaled back on the big bet investments and R&D.  Contractors slowly disappeared.  As in any economic downturn, only the strong survived.  This trend also applied to cable operators as consolidations of many of the mid to smaller tier companies occurred.  

Then in 2008, everything changed once again, and would never be the same.  Netflix began streaming in November of 2008.  While there were sceptics because of the limited content at the time, Netflix became an instant success.  Particularly for people on a budget.  By this time, internet connectivity had finally overtaken video as the most important communication service required in the home.  Many people in the down economy had to pay for internet, but didn’t want to fork over the extra $50-100 per month for video.  Netflix provided a revolutionary and cost saving idea, and gave subscribers an experience better than anything they ever had in the past.  

It is very important to understand that up to this time, from the introduction of cable internet, one DOCSIS QAM channel per service group had sufficiently accounted for data traffic. Within 2-3 years, Netflix alone accounted for 50% or more of all internet traffic.  The revolution had begun.  Steadily, we began to see the demand for DOCSIS QAM per service group rise from 1-2 by 2010, 2-4 by 2013, 4-8 by 2015, etc.  Now the industry is looking at 32 channels and beyond over the next few years alone, and with smaller and smaller service group sizes.

 

Chart: DOCSIS QAM Growth Trends & Projections for constant service group size.

In addition to Netflix and streaming services, FTTx began to heavily roll out in the 2010s.  The ‘speed war’ had begun.  30 MB, 50 MB, 100 MB, 300 MB, 1 GB tiers!  Not only was keeping up with real customer demands a concern, but now a marketing war based on subscriber perception had begun.  

The problem many cable operators faced, was that cable technology at the time, would not be able to keep up with those speed requirements.  It was also apparent as they viewed the demand/impact hockey stick of QAM channel requirements, they were going to have significant issues keeping up with consumer demand—unless they continued to split nodes; over and over and over again.  This would cause rapid expansion in CMTS chassis requirements, optics, fiber, nodes, etc.  Not a viable option for any long term strategy or business model.

Major MSOs began to question whether they should abandon growing HFC at all and move directly to a FTTH architecture.  There seemed to be no good answer.  Moving to a FTTH architecture was a massive cost, change in technology, new HE’s, changing set-tops, re-educating maintenance crews, changing operating procedures, …new vendors, partners, contractors, etc.  In addition, the transitional process would be a nightmare.  On the flip side, investing in HFC to keep up with demand and competition appeared okay for a while; but seemed a lost cause in the long run. 

Fortunately, the few remaining thought leaders in the industry came together.  The result of this is DOCSIS 3.1, higher density chassis, remote Phy, 1.2 GHz gear, larger US splits, etc.  The foundations of this all arising in the 2012-2014 time frames.  The possibilities that these technologies would provide, modeled cable systems well beyond a 10-year time frame at a fraction of the cost of a full FTTx overbuild.  Adopting a hybrid New Next Gen HFC architecture with targeted PON not only extends that even further, but helps the longer term migration to fiber deeper becomes manageable and cost effective. 

These technologies help solve the bandwidth issue, speed requirements, scaling issue at the HE, and provide spectrum for next gen services such as managed IP, Cloud VOD, Cloud DVR, etc.   At this point, it was all a matter of the vendors and partners executing on that solution, equipment and software.  

Opportunities in Cable are back, and in a big way.  Major players in cable such as Comcast and Time Warner continuing to investment in HFC technologies.  These changes include Node splits, upgrades, CMTS replacement and scaling, D3.1, Remote Phy, IP video, Targeted PON growth, new build PON integration, etc.  

Over the next 10 years, the majority of cable operators will have:

• Upgraded most if not all of their node and active components
• Enhanced tap and passive networks
• Migrated to node only
• Growing CMTS capacity multiple times over
• Introduced DOCSIS 3.1 and Remote Phy
• Migrated services away from broadcast and traditional QAM to IP delivered services
• Migrated portions of their network to true virtualization
• Began process of migrating to full FTTX/PON

Vendors will be releasing new platforms and technologies at a rapid pace over the next few years.  The scale of changes in the network will rival, if not exceed the changes that took place in the late 90s to mid-2000s.  To achieve success during this transition, operators, vendors and partners need to work together—leveraging the strengths of each entity.  

CCI has the ‘across the network’ experience and expertise to help cable operators build a strategic migration solution for both the physical network and service strategy.  From strategy to design, installation, implementation, and Managed NOC & Call Center services, CCI is the ideal partner to help cable operators with transitioning their traditional video and HFC systems to the IP capable network of the future.

CCI Systems Adds Drew Kempen to Technology Team

Consulting Systems Engineer brings extensive cable architecture knowledge to CCI

  

Drew Kempen, CSE 

IRON MOUNTAIN, Mich., September 21, 2015- CCI Systems recently announced technology expert, Drew Kempen, has joined the team to offer additional expertise with HFC and FTTx end-to-end architecture, solution and consulting services.

“Drew’s years of experience, business acumen, and technical vision are vital components to providing thought leadership to our customers and guiding them to success,” said CCI CTO, Matt Reath.

As Cable Architecture and Strategy CSE, Kempen will play a role in developing and implementing CCI’s cable strategy, with emphasis on Tier 2-4 service providers (SP). He has worked with cable operators around the world in developing a planned strategy that migrates the network based on customer and service requirements. This includes technology, service and architecture migrations that help operators effectively transition toward a Next-Gen IP video platform. His specializations include solution architecture, service and bandwidth modeling and migration, service & technology transition strategy, cost analysis and construction/operational impact analysis, with experience in developing Optical, HFC, X-PON and FTTx solutions.

"CCI has been doing great things for services provider networks for a long time. Customers know they can come to CCI to get the job done right.” Kempen noted. “The cable operator market is about to go through a major transformation which presents an enormous opportunity for CCI. I am excited to help CCI become not only a leader in implementation, but a thought leader in the industry, where customers come to CCI to figure out ‘what to do’. As we engage customers at the strategic level on developing solutions and a long term plan, the value of CCI to the customer will vault to the top of the value pyramid; and will entrench us as a partner and solution provider to the customer for years to come.”

Kempen joins CCI after 16 years with Cisco as an Architecture Specialist and Consultant, where he worked with customers at the operational layer, as well as the strategic level, giving him a unique perspective and understanding of the requirements cable operators have when looking for solutions.

While holding a Bachelor’s degree in Business Science and Management, Kempen has also earned multiple Cisco certifications, including Cisco Certified PM, Cisco certification in networking and the Advanced Sales Masters Certification. 

Stop by and say hello to Drew at the upcoming SCTE Cable Tec Expo. CCI will be in booth #2721 and will be  available to have candid planning discussions with Service Providers regarding present and future network needs.