Cable Industry Richard Craig Telecommunications Technologies.
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Transcript of Cable Industry Richard Craig Telecommunications Technologies.
Cable IndustryCable Industry
Richard Craig
Telecommunications Technologies
Chapter 2 Cable TelevisionChapter 2 Cable Television
Cable delivers Multichannel high-quality video to subscribers for monthly fee.
Can also provide two-way services for data & telephony
Cable SystemCable System Cable System Consists of – Headend- point at which all program signals
are received, assembled & processed for transmission by the distribution network
– Distribution network- carries the program signal through the community, using coaxial or fiber optic cables. • Consist of 2 elements
– Trunk- large cable that leaves the headend, travels thru the community, and splits at various points, stops at the end of service areas
Cable SystemCable System
– Feeder-smaller cable running along the streets in a neighborhood to which subscribers connect.• Bridge amplifiers-spread throughout trunk to
maintain strong signal.
– Subscriber Drop-then takes the signal from the feeder system to the sbuscriber’s home, where it is picked up by television reciever.
Entire system makes sure the original signal stays strong.
Cable Television (Background)Cable Television (Background) Original purpose of cable to extend the reach of regional
broadcast stations
First deployed in the 40’s for rural locations w/ bad broadcast reception
Early predecessors include– Community Antenna Television (CATV)– Parsons Experiment
Cable (Background)Cable (Background)
1949 Robert Tarlton Developed the “Lansford System”-building a master antenna at the base of the Allegheny Mountains to amplify televison signals.
Nature of CableNature of Cable
Changed in the 70’s– with new software in programming– no longer an extension for broadcast stations
‘75 HBO makes first communications satellite network exclusively for cable companies.– Cable operators now could offer multiple channels
of unique programming to customers.
Nature of CableNature of Cable
Ted Turner– Uplinks signal of his small, independent
Atlanta television station (then WTCG, now WTBS) to the same satellite carrying HBO signal.• Allowing any cable system distributing HBO
to distribute his station as well.– First Superstation– Inspired creation of new cable channels (CNN,
MTV, ESPN)
Nature of CableNature of Cable
Opens up Niche Market Capabilities Cable companies needed to upgrade
system to offer more channels Number of available cable channels
sparked interest in cable from consumers in urban areas
Growth in urban areas caused # of cable subscribers to increase drastically
Cable MilestoneCable Milestone
1999 Emmy Awards milestone for Cable Industry– Cable programs had 134 nominations– HBO winning more prime-time Emmy
awards than broadcast networks
Early Cable RegulationEarly Cable Regulation Local regulations– Local governments claimed authority over cable
systems. Regulated prices, channel line-ups and more.
Cable Act of ‘84 removed most of these restrictions.– Late ‘80’s investment poured into industry
– # of systems & subscribers increased
– Profitability led to consolidation
• Small systems purchased by Multiple System Operators(MSO’s)
Early Cable RegulationEarly Cable Regulation
Price Deregulation– Led to rapid rise in cable rates
By early ‘90’s cable experienced significant regulatory and competitive problems.– Complaints from consumers about increasing
subscription fees.
– Deteriorating services
Early RegulationEarly Regulation
Complaints led to the Cable Television Consumer Protection & Competition Act of ‘92– re-regulated cable industry
• imposed price control• customer service requirements
– Delivered major victory to broadcast television stations.• Allowing them to dictate to local cable systems whether
they had to be included on cable line-up(must carry).
• Or whether the cable operator had to negotiate for permission to carry the station (retransmission consent)
Competitors to CableCompetitors to Cable Experiments with alternative technologies to
deliver cable– Wireless Cable
– Multichannel Multi-point Distribution Service (MMDS)
– Direct Broadcast Satellite (DBS)• has experienced significant growth in past several years
• Now has “local-in-local” capabilities
– Video Dial Tone (VDT)
Competition Act required cable program networks to sell their services to competitors
Cable Expands Cable Expands
Bandwidth upgrades begin in the ‘90’s– went from coax to Hybrid Fiber/Coax (HFC)
• optical fiber backbones deliver greater bandwidth & better signals to feeder networks & the nodes in local neighborhoods
– Two-way interactive capacity also engineered into new systems.
New Cable ServiceNew Cable ServiceTested cable-delivered telephony
– Encountered problems• uninterrupted power to cable telephony systems
when electrical outages occurred– needed to preserve for 911 and emergency services
• Plus consumer acceptance was low.– Pilot studies suggested telephony could be
delivered• State & federal regulators slow to grant approval• Cable operators slow to make huge investment
New Cable ServicesNew Cable Services Broadband
– Explosion of internet shifted calbe companies interest from telephony to data.
– Driven by consumer demand for faster Internet service, to accommodate graphics and video.
Developed data transmission capability w/ HFC– Broadband link that provides much more speed
than telephone lines.– Offers downlink data rates of up to 10 Mb/s,
compared to 28.8Kb/s of telephone
New Cable ServiceNew Cable Service
Cable companies also began to offer satellite delivered digital audio services in the late ‘90’s.– providing subscribers with high-quality
music channels for home stereo.
TC Act of ‘96TC Act of ‘96 Developed to encourage competition among
Telecommunications Industry– Deregulated cable rates again– Prescribed conditions in which competitors could
begin to enter the video distribution business & freed cable companies to deploy telephony, data and other services.
MSO’s were interested in telephony.– Became apparent other competitors such as resellers
could enter market quicker with less investment, compared to huge capital cost of cable entrance.
Digital ConversionDigital Conversion
Also in ‘96 FCC authorizes deployment of a digital over-the-air television service in the U.S.– Projected date of 2006 for the retirement
of analog
Digital ConversionDigital Conversion Major Barriers to overcome for digital
conversion– Have to address process of converting signals
from one format to the other, – or cable systems converting to a different digital
modulation standard
Agreement will need to be made between broadcasters & cable companies whether the cable company will transmit a broadcasters digital signal, analog signal or both.
Digital ConversionDigital Conversion
– Cable argues that if they make room for two channels per broadcaster they will have to drop carriage of existing channels
– Claim that such a demand constitutes an “illegal takings”
Current Status of CableCurrent Status of Cable
By year 2000cable reached into approximately 70% of American HH’s– Distributing an average of 57 channels– approximately 600,000 residential subscribers
to cable telephony services and 1.5 mil. with data services using cable modems.• Problem with data deployment is in the complexity
and cost of installing cable modems.
Current Status of CableCurrent Status of Cable
Most cable systems owned by MSO’s Traditional cable companies disappearing
as large telecom. companies are purchasing them for broadband network access.– Acquistions tend to produce higher stock
prices for the companies.– Yet have raised anti-competitive concerns
amongst congress and regulatory agencies.
Future of CableFuture of Cable
Cable will continue to dominate residential video delivery.– May diminish a little with growth of DBS– And inability to convert to digital could worsen
the churn of subscribers
Cable telephony will continue to grow– will be reliable and cost less than traditional
wired and wireless telephony services– wired telephony will continue to be viable.
Future of CableFuture of CableCable has taken lead in delivering
high-speed online data services– greatly due to deployment of broadband network– some cable companies plan to offer their cable
modem customers open access to there choice of competing ISP’s, using their systems.
– Digital Subscribe Line(DSL) service being offered by some LEC’s, competition to cable modem.• Combat competition w/ services at an attractive price and “point-to-
point” data network services to businesses
Digital is CrucialDigital is Crucial
Currently cable is major residential broadband delivery system in the U.S. in order to maintain success must make conversion to digital. Offering services at prices below competitors, and continue to be a reliable telecommunications provider.