Cable Business Services Are Moving Up in Size

The cable industry's commercial services initiatives, which remain healthy revenue generators, are evolving toward bigger -- but not the biggest -- customers.

Last week, Comcast announced that its Ethernet services is targeting organizations with as many as 500 employees, which is a shift upward from its previous sweet spot of 20 or fewer employees. Kevin O'Toole, the senior vice president of product management and strategy for Comcast Business Services, says the announcement was intended to call attention to change that has been in the field for some time.

The cable industry has long been a significant player in the commercial services business, and Ethernet-based services are an element of those initiatives. According to Vertical Systems Group, last year Cox was the fourth largest and Time Warner Cable the seventh largest domestic provider of business Ethernet services.

However, the industry as a whole has tended to focus on very small customers. The move suggested by the Comcast update last week, and the significant and growing presences of carriers such as Charter and Cablevision -- through Optimum Lightpath -- suggest that the general trend is for operators to provide services to somewhat larger organizations.

Within the big picture of business services, there are a good number of subtleties between service offerings and MSO strategies. Some operators, observes Vertical Principal and Co-Founder Rosemary Cochran, are more engaged than others. "There are some who have dabbled but not made a major play, or are doing wholesale but not out knocking on doors and competing," she says. "If the operator has an enterprise group, it's an indication they are moving to make it work" at the retail level.

The inconsistency in the level of interest in commercial services is understandable. The cable industry has many exciting opportunities before it and is fending off threats to its core video business. Operators must deploy their resources carefully, and that doesn't include demanding commercial services in many cases. The bottom line is that going after commercial businesses -- especially if the roadmap is to move beyond very small customers that can be served by relatively easily tweaked versions of the services offered over existing HFC infrastructure -- is not an easy task.

More Ethernet

Bigger businesses -- especially if they are regional offices of national organizations -- demand deeper redundancy, formalized and demanding service level agreements (SLAs) and other high-end services. In short, moving into commercial services is a major step, and it usually involves more reliance on metro Ethernet.

For the right operator in the right region, there is a tremendous upside. In the past couple of years, the opportunity has grown even deeper as the industry begins offering backhaul services to cellular carriers struggling to accommodate exploding levels of data traffic and the transition to 4G. This involves overlapping technology. Combining commercial services and cellular backhaul increases revenue and makes capital investment calculations more appealing. Cox Business Senior Data Product Manager Bob Preston notes that the company is serving larger customers and has enjoyed two to three years of "major growth" in its backhaul business.

Cox Business surpassed the billion-dollar revenue mark in 2010. "Last year we had 14% revenue growth and are continuing that trajectory," Preston notes. "We will have 14 or 15% growth this year. Ethernet is our fastest growing data service."

The reality is that even the larger customers eyed by some MSOs represent relatively small organizations in the big picture, which includes multinationals and huge enterprises. The primary targets for operators serious about the commercial services business are organizations in specific verticals that mostly exist within their footprints. Healthcare, education, and state and local government fit nicely into the Cox profile, Preston explains. Connections to off-network endpoints are handled through partnerships -- with other operators when possible -- or other arrangements.

The key, Cochran notes, is more the overall profile -- the number of venues served and where they are -- than the raw number of employees served. "It's the number of locations and the locations of the locations," she says.

Those targets, along with the existing HFC-driven small customer base and cellular backhaul business, appear to set the industry up for healthy growth in commercial services without the need to compete with the telcos for the large enterprise business customers.

Gaylord Hart, Infinera's director of marketing for the MSO market segment, calls the market "bifurcated." Some companies, such as Cablevision and Cox, have aggressively courted the commercial services business for years.

"Time Warner and Comcast only recently started putting a very large focus on commercial services," he explains. "First, they target low-hanging fruit, typically 20 or fewer customers that can be served with existing HFC plant. These customers require no new plant buildout. Now, they have begun putting more and more resources on commercial services and have begun targeting bigger businesses."

Carl Weinschenk is a reporter for Broadband Technology Report. Contact him at

Get the Broadband Technology Report Newsletters Delivered to Your Inbox

Subscribe to email newsletters today at no cost and receive the latest information on:

  • Video Technology
  • Network Technology
  • Technology Alerts
  • BTR LATAM (Latin America)

SCTE-Cable Tec Expo 2016 Video Show Dailies

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 3

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 3

In our Video Show Daily for Day 3 of exhibits at SCTE Cable-Tec Expo in Philadelphia, BTR Editorial Director Stephen Hardy covers trends in distrib...

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 2

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 2

In our Video Show Daily for the second day of exhibits at SCTE Cable-Tec Expo in Philadelphia, BTR Editorial Director Stephen Hardy highlights furt...

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 1

BTR's SCTE-Cable Tec Expo Video Show Daily, Day 1

BTR Editorial Director Stephen Hardy reviews the hot technologies and announcements from the first day of exhibits at SCTE Cable-Tec Expo 2016 in P...

Diamond Technology Reviews - 2016 High Scores

2016 Diamond Technology Reviews Slideshow

2016 Diamond Technology Reviews Slideshow

Diamond Technology Reviews 2016

Diamond Technology Reviews 2016

BTR's Diamond Technology Reviews, now in its twelfth year, is a technology recognition program wherein vendors serving the broadband cable ...

Related Articles

Status Report: Full Duplex DOCSIS

Status Report: Full Duplex DOCSIS

October 19, 2016

By Monta Monaco Hernon - Specification development for Full Duplex DOCSI...

Netcracker Technology

Netcracker Bundles Virtualized Services, Cloud Apps

October 18, 2016

NEC and Netcracker Technology unveiled their Network-as-a-Service (NaaS)...


WOW! Gigabit: Where Technology and Strategy Meet

October 18, 2016

By Monta Monaco Hernon - When WOW! launched gigabit Internet speeds in A...


2016 SCTE Cable-Tec Expo Wrap Up

Whether you couldn't make it to Cable-Tec this year or want to see if you missed anything while you were there, you'll want to join BTR editors Stephen Hardy and Ron Hendrickson as they reveal their picks for the...

October 12, 2016
Sponsored by

Counting the cost: Efficiently transitioning from HFC to FTTH

HFC networks are uniquely positioned to provide compelling and competitive services, and are also uniquely positioned to transition to symmetrical FTTH as commercial requirements demand.  This webinar will d...

Date:September 22, 2016
Sponsored by

Maintaining High Quality of Experience in an Adaptive Bitrate System

This webinar will look at the many points in an ABR system where the video is touched.  From ingest (satellite, file, and IP), to egress, each point should be qualified for compliance to help maintain a high...

Date:August 25, 2016
Sponsored by

White Papers & Special Reports

Cable VoIP 2.0: Voice Moves to the Cloud

October 2016

Cable providers led the charge on the VoIP evolution and won customers and market share. Now voice networks are evolving again. The cloud voice platform has ...

Understanding Ultra High Definition Television

October 2016

Over the last 10 years, high definition television (HDTV) has been replacing standard definition television as the expected viewing format for television pro...

Are You Ready for DOCSIS 3.1? The Future of Cable Technology and How to Prepare Your Network

October 2016

DOCSIS 3.1 promises 10x capacity throughput and a range of technical benefits for cable providers and users alike. Are you ready? Discover the technical adva...

BTR Blogs

BTR Managing Editor Ron Hendrickson

FCC Rethinks Set-Top Plan

September 10, 2016

By Ron Hendrickson - The FCC has reworked the "unlock the set-top b...


In Memoriam: Richard Covell

August 18, 2016

By Rob Stuehrk, Publisher - We at Broadband Technology Report were sadde...

BTR Managing Editor Ron Hendrickson

Court Overturns FCC Municipal Broadband Order

August 11, 2016

By Ron Hendrickson - You win some, and you lose some, and the FCC just l...

Featured Hangouts

4K 4 U: How to Prepare for UltraHD Video

4K 4 U: How to Prepare for UltraHD Video

4K/UltraHD video is coming - consumers are buying the TV sets, and more content is becoming available. Watch this inf...

DOCSIS 3.1: A Look Ahead

DOCSIS 3.1: A Look Ahead

Watch a 30-minute video chat of experts from a variety of related disciplines discuss how close deployments really ar...

Featured Hangout

4K 4 U: How to Prepare for UltraHD Video

4K/UltraHD video is coming - consumers are buying the TV sets, and more content is becoming available. Watch this informative Hangout on demand by clicking the link above.

Sponsored by Verimatrix.