Gateway to Cable Operators' Future

BTR_Feature_Art_Key_3_19_13Multimedia home gateways are not only gateways to consumer electronics devices in subscribers' houses and apartments. They also are the gateways to increased revenues and, to a great extent, the cable industry's multiscreen and advanced services future.

The importance of gateways is felt on two levels: Most immediately, they are the control points in the gradual shift of bandwidth allocations from digital to IP. The gateways also serve as a layer to help manage mobile devices and, eventually, advanced services - such as home automation - that the advent of IP makes possible.

Gateways are the single pivot around which many important issues coalesce: Consolidating functionality can reduce capex, simplify the introduction of new services and easing operational issues. "There are a whole bunch of technical reasons that this makes sense," said Derek Elder, ARRIS' senior vice president of sales.

Comcast is the highest profile operator on the home gateway front. Its Xfinity X1 service is in the field now. The XG5 is in the prototype phase and is expected to follow soon. Several vendor announcements concerning the latter were made at the Consumer Electronics Show in Las Vegas in January. The XG1 provides MPEG services to the main television and IP feeds to second and third sets. The X5 platform are expected to add data and voice functionality.

The gateway concept is not new, of course. Recent research by IHS Screen Digest suggests that the sector is set for rapid acceptance. The firm released research this month that predicts that from 2011 to 2015 - in other words, a research term that we already are in the middle of - multimedia home gateway shipments will rise from about 90,000 to 9.6 million. The study does not break out the growth by carrier or network type but, according to its authors, North American MSOs will be in the middle of the action.

The most interesting question isn't whether this will happen. Rather, it's precisely how the industry chooses to transition to this IP future. The keys will be to not limit new service introduction while, at the same time, stranding as little investment as possible in the current generation of set-top boxes. "The STBs originally were the bridge from analog to digital broadcasting,” said Daniel Simmons, the senior principal analyst at IHS and lead author of the report. “Multimedia home gateways are the next evolution of the STB as it will be used to convert broadcast to IP video."

The question on the table is the way in which gateways will be deployed. The two options sound like a plotlines for a slasher film: Operators can either go headed or headless.

Currently, the industry is wrestling with the way in which to roll these services out. John Sweeney, the vice president of technology for SMC Networks, said headed gateways have traditional set-top box functionality built in, while headless gateways pass MPEG signals to the installed STBs, which act as "thin clients." In that case, the signals travel from the gateway to the set via MoCA.

The headed vs. headless debate won't fade quickly. Many operators won't feel the pressure to make a commitment as service offerings and televisions evolve. The evolution of sets is particularly important: If they are capable of decoding MPEG signals and using CableCARD for decryption, the dynamics could shift. "Many people are looking at headed gateway as the right direction, but some are starting to look at the headless devices," Sweeney said. "That is driven by intelligent TVs .... People are buying these expensive TVs and are not looking to hook up an STB. But they still want access to all that content."

The use of legacy STBs as thin client or slave devices in headless scenarios may not be as elegant a solution as it appears on first blush. The installed base of STBs don't all have MoCA capabilitiesmany lack the processing power to handle some of the emerging video schemes. Both of these issues could be limiting factors.

Observers suggest that headless approach ultimately will predominate. How this will roll out is uncertain, however, due to the significant number of variables in play. Some operators may sit on the sidelines until the technology and business cases solidify and jump right to the headless gateway approach, while others may move more quickly and introduced a generation of headed gear.

The bottom line is that the debate over how to best deploy gateways is not close to being settled. "What you find is that the bigger operators [are considering] both of these systems, depending on the household," said Roger Gregory, the vice president of Entropic's set top business unit. "It depends on the household. If it is a household with multiple DVRs and lots of television end points, they may wish to have a headless gateway. If it is a household with traditional DVR service, they may opt for a headed service and expand over time."

Carl Weinschenk is the Senior Editor of Broadband Technology Report. Reach him at carl@btreport.net.

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