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With so much riding on the growth of its broadband and IP service portfolio, Comcast Corp. has quietly transformed itself from a traditional service provider relying on software provided by its technology vendors to developing its own software, middleware, and application programming interfaces (APIs). More importantly, Comcast is licensing access to these software stacks to its vendors and fellow cable operators as it seeks to streamline the lengthy cycle of product definition, development, testing, homologation, and deployment.
The result of Comcast's efforts has been a series of software stacks that have either been spun off into their own entities for the purposes of management, licensing, and ongoing development (RDK and RDK-B) or licensed directly by Comcast itself (X1). Let's be clear. Comcast's goal is not to generate additional revenue through the licensing of these software stacks to equipment vendors and fellow multiple-system operators (MSOs). Rather, the company wants to reduce its own operational costs by providing a common reference point for the development of new hardware, services, and applications.
Prior to Comcast's efforts, the cable industry made a number of attempts to develop a standardized framework for the development of applications, including the OpenCable Application Platform (OCAP) which overreached as an all-encompassing platform for the development of next-generation video services.
Comcast took a different approach, developing the reference design kit for video (RDK-V) to integrate fundamental elements such as digital rights management (DRM) and conditional access (CA), while providing set-top box (STB) vendors the opportunity to differentiate on key pieces such as the user interface (UI), in addition to hardware and overall industrial design. Comcast's successful X1 platform runs on the RDK-V software stack, and over 275 technology vendors and cable operators have licensed elements of the RDK.
Comcast has gone even further by integrating reference design kit for broadband (RDK-B) into its latest DOCSIS 3.1 broadband gateway, the XB6, which was announced back in September 2016, and is scheduled to launch in the first quarter of this year. Comcast worked with OEM partners to design the XB6 hardware and has even developed its own UI for managing home networks and applications, including Wi-Fi access and security, and smart home applications. In terms of broadband devices and services, Comcast is effectively standardizing on the X1 platform for video and porting it onto its upcoming generation of DOCSIS gateways for the provisioning and management of broadband services.
For Comcast, the picture is clear: To counter the economic and mindshare threat posed by OTT providers, the company has to define and control the user experience in the home. To effectively control the user experience in the home, the company must be hands-on in the development of firmware, middleware, software, and hardware, as well as the integration of all these moving parts.
Going Beyond the Home
Of course the home is where a service provider has the most frequent interaction with its customers. But broadband services traverse a complex network of platforms and protocols before reaching the home. For cable operators, nowhere is this complexity greater than in their access networks, which are a collection of new and legacy technologies, including fiber, coax, RF, Ethernet and IP. DOCSIS data traffic is converted from dig
Comcast, like other cable operators around the world, will be spending the next 10 years eliminating this complexity and standardizing on IP and Ethernet running over an increasingly fiber-based network. This is not to say that coax is going away. In fact, coax will still be the dominant physical layer technology for many years to come, thanks to technologies such as DOCSIS 3.1 and full duplex DOCSIS, which can push downstream speeds to 10Gbps.
Just as with home networks, which have become increasingly complex, we theorize Comcast has signaled its intention to define the future access network in conjunction with its technology suppliers. Through the development of an RDK-like operating system designed to provide a standard reference point for the creation, provisioning and management of broadband traffic and services, Comcast's future-proofing becomes evident.
Back in September 2016, Harmonic announced a warrant agreement with Comcast, allowing Comcast to potentially acquire 7.8 million shares of Harmonic stock based on sales and deployment milestones of Harmonic's CableOS product. Comcast has signed similar warrant agreements with ARRIS Group Inc. and Universal Electronics (UE), with ARRIS's agreement focused on networking hardware and UE's agreement centered on its voice remotes for the X1 platform.
The agreement with Harmonic is interesting because Harmonic, though a long-time supplier of edge quadrature amplitude modulation (QAM) platforms for video services, has not been a major supplier of converged cable access platforms (CCAPs) to Comcast. But Harmonic's CableOS platform addresses the anticipated architectural changes Comcast and other MSOs will see in their broadband access networks.
Cable operators and their cable modem termination system (CMTS) vendors have for years prided themselves on the tight integration of hardware platforms and software to provide high QoS levels for broadband services. This integration has served them well in helping to quickly and economically expand their broadband service offerings, including a continuous cycle of speed upgrades, as well as digital voice and other adjunct services.
But the tight coupling of hardware and software is quickly being viewed as a limiting factor for operators who are faced with a future that calls for a minimum of 1 Gbps of downstream throughput for every broadband subscriber. Even today's generation of CCAP-capable platforms from ARRIS, Cisco Systems, and Casa Systems will be hard-pressed to evolve to match those performance levels without a fundamental decoupling of underlying software from hardware platforms and a dramatic architectural change in hybrid fiber-coaxial (HFC) access networks.
Virtualization also opens up the potential for cable operators to offer new services, including subscriber-specific content delivery networks (CDNs) where content and bandwidth preferences can be stored on the network and optimized on a per-subscriber basis.
But for Comcast, the virtualization of its broadband access infrastructure, and all the software elements involved in making that a reality, will go a long way to building an operating system for DOCSIS networks and broadband services, in general. Again, we believe the idea here is for Comcast to exert the same level of operational control over its broadband access network as it is doing in subscribers' homes by developing an access network operating system upon which all CCAP, optical node and OLTs will run. This operating system will extend the existing DOCSIS specification into a virtualized environment, providing specifics for the provisioning of broadband services across the entire access network, and then incorporating APIs to tie into RDK-B to extend that service provisioning into the home. The development of this RDK-A or CableOS, whatever name it takes, will allow Comcast and any of its licensees to move faster towards a more virtualized future, relying on generic hardware platforms in the headend, hub, and remote nodes.
So, back to Harmonic and its warrant agreement with Comcast. Not much is known regarding the specific software elements of Harmonic's CableOS. But it is very possible that there are elements that Comcast is looking to incorporate into its longer-term vision of an access network OS. If this is the case, it is a potentially huge win for Harmonic, which has struggled to gain market share at Comcast in the critical CCAP market. It could mean the licensing of its CableOS software to other cable operators and, potentially its competitors. Like RDK for the home, competitors such as ARRIS, Cisco, and Casa Systems could be required to license the software for integration into their own CCAP platforms. For Comcast, this would ultimately mean more control, technologically and economically, over how broadband services are created and delivered from its network, which will be absolutely critical as broadband encompasses fixed, Wi-Fi, and mobile networks.
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