High-speed cable may not be a low-key play much longer

The next generation of high speed cable connectivity could come to Quebec business customers this year, posing an opportunity for cable company Videotron Ltd. to lure business customers in Quebec from telephone companies selling online data and telephony services.
Using ultra wideband technology from Cisco Systems of Canada, including its Wideband SPA, Videotron said in production tests it has achieved download speeds of up to 98 megabits per second. That speed isjust over four times the maximum 20 Mbps it offers home users now.

By comparison, most North American telephone companies are offering high speed at around six Mbps.

However, Videotron didn’t promise that when its ultra speed service debuts it will come close to the century-speed mark.

Still, Pierre Roy, the cable company’s vice-president of engineering, said that “this is a new era that enables us for the future.”

Manon Brouillette, Videotron’s senior vice-president of marketing, said business users are among those involved in the pilot project and their feedback on how they use the increased speed and capacity will help determine Videotron’s strategy. “We see significant opportunities for business to better communicate (and) better exploit their capabilities” with faster connectivity, she said.

While Videotron executives talked about the advantage to home users of ultra-speed connectivity, a Canadian telecom industry analyst said that it will also give the cable company a way to lure business customers in Quebec from VARs and telephone companies selling online data and telephony services.

“I suspect the 100 Mbps service will be more skewed towards business, and priced in a way business will find attractive,” said Iain Grant of the SeaBoard Group.

But high-speed cable in the enterprise has been a low-key play, according to Forrester Research Inc. principal analyst Brownlee Thomas.

“I don’t want to say it’s a nominal penetration, but the cablecos have not made a lot of noise about it,” Thomas said. “They’re very keen to bid on government contracts and large enterprise contracts.”

Cable’s footprint in the enterprise is largely about redundancy, she said. Cable offers a physically separate infrastructure from the wireline carriers. “It’s not good enough to go with Bell (for backup service) unless Bell has a separate exit from my building going onto a separate physical loop,” she said.
At 100 Mbps, Thomas said, it’s an Ethernet experience, that “makes you feel like your sitting on a LAN. A hundred Mbps, depending on the price point, on a completely physically separate network from Bell, that’s true competition, that’s facilities-based competition. It’s localized competition.” At Ethernet speeds, “you don’t need to do QoS, you don’t need to do classes of service, you don’t have to worry about that since you’ve got a ton of bandwidth. Since it’s local – and typically these things are priced on distance from the cable head or distance from the central office – it’s beautiful.”

Faster and faster
Vince Vittore, a senior analyst at the Yankee Group, noted that because cable bandwidth is shared, users rarely get the maximum speeds advertised by providers. Data flow slows as the number of people online goes up, he explained. On the other hand, his firm is examining the possibility that as speeds increase, downloads of Web pages get faster, to the point where the odds increase that the posted speed can be achieved.

Videotron’s offering is based on the proposed DOCSIS 3.0 specification for high speed data over cable. Most cable providers are using running on the DOCSIS 2.0 standard, although a number, such as Shaw Communications, are investigating the possibilities of adopting the new standard when it is finalized.

DOCSIS is a standard set by CableLabs in conjunction with a number of major IT vendors including Intel, Motorola, Broadcom, Netgear and Texas Instruments, many of whom make equipment for cable companies, corporate buyers and consumers.

DOCSIS 3.0 won’t be be finalized until the end of the year. Most Canadian cable companies, such as Shaw, Rogers, Aurora, Eastlink and Mountain Cable, will wait until then before upgrading their infrastructure, Vittore said. What’s noteworthy, said Grant, is that Cisco’s solution doesn’t need an expensive investment by a cable company, mostly a swap of circuit boards.

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