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Cable Industry Richard Craig Telecommunications Technologies.

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Presentation on theme: "Cable Industry Richard Craig Telecommunications Technologies."— Presentation transcript:

1 Cable Industry Richard Craig Telecommunications Technologies

2 Chapter 2 Cable Television Cable delivers Multichannel high-quality video to subscribers for monthly fee. Can also provide two-way services for data & telephony

3 Cable 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

4 Cable 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 sbuscribers home, where it is picked up by television reciever. Entire system makes sure the original signal stays strong.

5 Cable Television (Background) Original purpose of cable to extend the reach of regional broadcast stations First deployed in the 40s for rural locations w/ bad broadcast reception Early predecessors include –Community Antenna Television (CATV) –Parsons Experiment

6 Cable (Background) 1949 Robert Tarlton Developed the Lansford System-building a master antenna at the base of the Allegheny Mountains to amplify televison signals.

7 Nature of Cable Changed in the 70s –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.

8 Nature 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)

9 Nature 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

10 Cable Milestone 1999 Emmy Awards milestone for Cable Industry –Cable programs had 134 nominations –HBO winning more prime-time Emmy awards than broadcast networks

11 Early 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 80s investment poured into industry –# of systems & subscribers increased –Profitability led to consolidation Small systems purchased by Multiple System Operators(MSOs)

12 Early Cable Regulation Price Deregulation –Led to rapid rise in cable rates By early 90s cable experienced significant regulatory and competitive problems. –Complaints from consumers about increasing subscription fees. –Deteriorating services

13 Early 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)

14 Competitors 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

15 Cable Expands Cable Expands Bandwidth upgrades begin in the 90s –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.

16 New Cable Service Tested 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

17 New 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

18 New Cable Service Cable companies also began to offer satellite delivered digital audio services in the late 90s. –providing subscribers with high-quality music channels for home stereo.

19 TC 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. MSOs 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.

20 Digital 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

21 Digital 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.

22 Digital 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

23 Current Status of Cable By year 2000cable reached into approximately 70% of American HHs –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.

24 Current Status of Cable Most cable systems owned by MSOs 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.

25 Future 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.

26 Future of Cable Cable 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 ISPs, using their systems. –Digital Subscribe Line(DSL) service being offered by some LECs, competition to cable modem. Combat competition w/ services at an attractive price and point- to-point data network services to businesses

27 Digital 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.

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