Technology Solutions To Meet Growing Capacity Demands

Ken WrightChief Technology Officer, ARRIS

CANITECMonterrey, Mexico

28 April, 2010

Topics of Discussion▪

Drivers of Capacity Pressures

▪

Technology Solution Alternatives

2

Topics of Discussion▪

Drivers of Capacity Pressures-

Exponential growth in internet traffic

3

0

5

10

15

20

Mar-07 Jul-07 Sep-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jul-08 Oct-08 Feb-09 Mar-09 Apr-09 Jun-09 Jul-09

Vide

os V

iew

ed (B

illio

ns)

U.S. Online Video Viewed on Major Video Properties*

Demand for Convergence and Bandwidth Growing

4

0

10

20

30

40

50

60

70

80

90

100

Megabits per Second

per Subscriber

E-Mail

Digital MusicVoIP

DigitalPhotos

PodcastingOnline-Games

VideoMail

VideoBlogs

All Video on Demand

WebBrowsing

Video onDemand

High DefinitionVideo on Demand

Time

More than Doubled in 24 Months

150% More Bandwidth Consumed Per Subscriber

Every Year

Since 1982

Sources: Comscore, ARRIS estimates

IP Video

www.arrisi.com

Over The Top (OTT) TrendsBi

llion

s

Source: comScore

0

2

4

6

8

10

12

14

16

7.2

14.3

©

Copyright 2009. Broadband Directions LLC. All rights reserved.

Total Online Videos Viewed/Month

Over The Top (OTT) Trends

Source: comScore

0

50

100

150

200

250

300

350

400

151

327

# of

min

utes

© Copyright 2009. Broadband Directions LLC. All rights reserved.

Number of Minutes Watched/Average Viewer/Month

IP Video... It's Here To Stay... And It's Growing!

7www.arrisi.com

Overall Online Video Usage (U.S.)

Oct-09 Year-Over- Year

Month-Over- Month

Unique Viewers 138,623,000 +14.8% -0.5%

Total Streams 11,226,935,000 +26.2% +1.9%

Streams per Viewer 81.0 +9.9% +2.4%

Time per Viewer (min) 212.5 +23.8% +8.9%

Source: The Nielsen Company

All images are the property of their respective copyright owners.©

Copyright 2008. Broadband Directions LLC. All rights reserved.

On Demand Drivers For Growth

8

Several Applications Are Currently Driving the DOCSIS Bandwidth Growth

▪

Many MSOs indicated average downstream traffic levels increased by 40-50% in 2009... some saw even larger increases

▪

Recent measurements indicate that more than 60% of the Internet traffic is created by:-

Peer-to-peer file transfers (mostly movies)

-

Progressive video downloads (YouTube, Hulu, Netflix, etc.)

10

Data Speed Trends for Modems Predict Ongoing Exponential Growth

ARRIS Confidential and Proprietary

11

Max Permitted Bandwidth for Modems (bps)

1982 1986 1990 1994 19981

10

100

1k

2002 2006

10k

100k

1M

10M

100M

1G

50 Mbps

1.2 kbps 2.4 kbps

300 bps

56 kbps

9.6 kbps 14.4 kbps

28 kbps33 kbps

The Era ofDial-Up Modems

The Era ofWideband

Cable Modems

2010

Year

???

2014

10G

100G

1 Gbps10 Gbps

100 Gbps

12 Mbps

2016

The past 25-years show a constant increase of ~1.5x per year...

~300 Mbps

(1.5) (2006-1982)

= 5M/300

(1.5) (2016-2006)

= 300M/5M

128 kbps

256 kbps 512 kbps

1 Mbps 5 Mbps

The Era ofCable Modems

12 Mbps

"Past performance is no guarantee of future results, but..."

~3.5 Mbps

Avg. BW90 kbps

Trends and Predictions of Maximum Offered Modem Bandwidths

Max

DS

Perm

itted

Ban

dwid

th fo

r Mod

ems

(bps

)

1982 1986 1990 1994 19981

10

100

1k

2002 2006

10k

100k

1M

10M

100M

1G

2010 Year2014

10G

100G

2016

The Era ofWideband

Cable Modems

12 Mbps

The past 25-years show a constant bandwidth increase of ~1.5x every year... ~300 Mbps ?

128 kbps

256 kbps 512 kbps

1 Mbps 5 Mbps

The Era ofCable Modems2.4 kbps

300 bps

56 kbps

1.2 kbps9.6 kbps 14.4 kbps

28 kbps33 kbps

The Era ofDial-Up

Modems

50 Mbps200 Mbps

12

Trends in the Next Decade: Bandwidth Growth

▪

HSD & IPTV demands will lead to even more DOCSIS downstreams per headend

▪

ARRIS CMTSs must (and will) reduce the price/DOCSIS downstream to enable this evolution

ARRIS Confidential and Proprietary 13

# D

OC

SIS

Dow

nstre

ams

Req

uire

d fo

r 40K

HH

PH

eade

nd

Year

40

>1000

HSD

IPTV + HSD

???

Topics of Discussion▪

Drivers of Capacity Pressures-

Exponential growth in internet traffic

-

Increase in other Unicast traffic (voice, Video On Demand, etc.)

-

Deployment of HD channels-

3D -

Each program requires ~1.3x to ~1.5x the bandwidth

-

Simulcasting will require many resolutions for different devices▪

Example: 600 kbps for cell phones, 1.75 Mbps for PCs, 3.75 Mbps for Standard-Definition TVs, and 15 Mbps for High-Definition TVs

14

Topics of Discussion▪

Drivers of Capacity Pressures

▪

Technology Solution Alternatives-

HFC bandwidth expansion (450 Mhz, 550, 750, 860, 1GHz)

-

Analog recapture -> All Digital (but still a lot of analog TVs)

15

Evolution of Bandwidth & Utilization Upstream Capacity Limited

--Status monitoringStatus monitoring--SetSet--tops returntops return--DOCSIS returnDOCSIS return

Analog VideoAnalog Video Digital broadcastDigital broadcast

2020 40405050 550550 750750 860860MHzMHz

DOCSIS forwardDOCSIS forward

20002000

--Status monitoringStatus monitoring--SetSet--tops returntops return--DOCSIS returnDOCSIS return--CBR telephony returnCBR telephony return

Analog VideoAnalog Video Digital broadcastDigital broadcast

--VOD, SVODVOD, SVOD--DOCSIS forwardDOCSIS forward--CBR telephony forwardCBR telephony forward

2020 40405050 550550 750750 860860MHzMHz

20042004

20082008

--VOD, SVODVOD, SVOD--DOCSISDOCSIS--SMESME--CBR telephonyCBR telephony--VoIPVoIP

--Status monitoringStatus monitoring--SetSet--tops returntops return--DOCSIS returnDOCSIS return--CBR telephony returnCBR telephony return--VoIP & SME returnVoIP & SME return

Analog VideoAnalog Video Digital broadcastDigital broadcast HDTVHDTV

2020 40405050 550550 750750 860860MHzMHz

20122012

--VOD, SVODVOD, SVOD--DOCSISDOCSIS--SMESME--SDVSDV--VoIPVoIP--IPTVIPTV

--Status monitoringStatus monitoring--SetSet--tops returntops return--DOCSIS returnDOCSIS return--VoIP & SME returnVoIP & SME return

Standard Definition Digital VideoStandard Definition Digital Video HDTVHDTV

2020 40405050 550550 750750 860860

UnicastUnicast

MHzMHz 1,0001,000

Topics of Discussion▪

Drivers of Capacity Pressures

▪

Technology Solution Alternatives-

HFC bandwidth expansion (450 Mhz, 550, 750, 860, 1GHz)

-

Analog recapture -> All Digital (but still a lot of analog TVs)-

Higher order compression (MPEG 4) and modulation (1024 QAM) (limited by installed base of set-tops)

-

DOCSIS 3.0•

4 channels yields 160 Mbps

17

MSOs Are Moving Toward DOCSIS For Their IP Video Delivery▪

Based on a trusted DOCSIS architecture

▪

Converges transport of voice, high speed data, and IP video

▪

Provides channel-bonding and stat-mux gains for 30% or more extra content offerings

▪

Provides high availability and intelligent packet scheduling of CMTS, as well as CMTS quality of service

▪

Provides the next generation of cost-effective CMTS solutions geared toward IP Video transport-

Moore's Law silicon benefits

-

Increased packet size trends due to IP video-

Multi-core chip architectures

18

IPTV over DOCSIS – Cost Reductions Due to Larger IPTV Packet Sizes

4 plus-fold throughput increase via the same processing engine

1370

CMTS Optimized for IPTV:

1 Gbps1 Gbps1 Gbps1 Gbps

Processor can process all 364K 1370B large

packets/sec arriving...

88% processor capacity is utilized

364K packets/second arrive

Avg. Packet Size for HSD = 300 bytes Avg. Packet Size for IPTV

= 1370 bytes

Processor can process all 300B 416K packets/sec...

300

CMTS HSD:

1 Gbps416K packets/second arrive

300 300 300 100% processor capacity is utilized

1370

CMTS without optimization for IPTV:

1 Gbps91K packets/second arrive

Processor can process 416K packets/sec but there are not

enough packets arriving...

Only 22% of processor’s power is

utilized

Topics of Discussion▪

Drivers of Capacity Pressures

▪

Technology Solution Alternatives-

HFC bandwidth expansion (450 Mhz, 550, 750, 860, 1GHz)

-

Analog recapture -> All Digital (but still a lot of analog TVs)-

Higher order compression (MPEG 4) and modulation (1024 QAM) (limited by installed base of set-tops)

-

DOCSIS 3.0•

4 channels yields 160 Mbps

-

IP Video

20

▪

IPTV -

overused term, means anything from YouTube video clips to watching full programs on Hulu or streamed programs from an MSO’s channel lineup

▪

“Pure”

IP Video -

delivery of video services over a managed network via Internet Protocol (IP) to a screen, through a broadband access network

▪

Screens include:-

Computers-

Hand-Held Devices (cell phones)-

TVs with IP STBs

▪

Services typically include:-

SD and HD video-

Digital Video Recorder-

Video-on-Demand-

Electronic Program Guide-

Interactive TV applications-

Targeted and Personalized Advertising-

Blending of internet and video services -

widgets

What is IP Video?

Place and Time Shifting

Photo and File Sharing

Internet Content

Any Device, Any Where

Drivers for IP Video Adoption▪

Consumer-

Any content, Anywhere, Anytime-

Content sharing across multiple devices-

Personalized and integrated services –

one provider-

Exponential growth of internet video usage▪

Cable Operator-

Competition on user experience and variety of services-

Additional revenue streams such as targeted advertising-

Competition on price –

reduce Set Top Box costs▪

Technology-

DOCSIS 3.0 (IPv6, Multicast, High Asymmetry, M-CMTS)-

Emergence of Systems on Chip for home devices that are capable of “blending”

traditional TV with IP Video content -

Network support for higher security and end-to-end QoS-

Advancements in processing & memory –

Moore’s law-

Advanced Codecs –

MPEG-4, AVC

ARRIS Confidential and Proprietary 22

Driver is Consumer DemandAny Content, Any Where, Any Time

Internet Video•

Unlimited Choice of User Generated Content

•

Limited Choice of High Value Content

•

PC, Game Console & Mobile Devices display

Internet

Managed Video•

Tight Control•

High Value Content•

Limited Choices of Content•

Limited choice of destination -

STB & PC

Agnostic Content•Unlimited Content –

Movies, TV Shows, Internet Video, and User Generated Content •Time-shifting •Targeted Advertising

Hybrid Approach •Central content and storage•Move streaming traffic to the edge•Hierarchical Caching•Better asset utilization•Scalable IP transport

Consumer Preference is the “AND” Solution

InternetInternet

Today’s Cable Video delivery is an “OR” choice for the consumer

OR

23

Examples of IPTV Services

Many MSOs Are Planning to Offer IP Video Within the Decade▪

Offers access to a broader audience and all three screens (TV, PC and handheld)

▪

Provides a direct conduit to the 15 to 30-year-old demographic

▪

Monetizes high quality video content with new subscription fees

▪

Offers access to the growing "Internet advertising market" through directed advertising in IP-based videos

▪

Offers opportunity to become "the organizers" of all IP Video content (MSO-based and web-based)

▪

Eliminates high costs of the existing MPEG Set-Top Boxs

25

Ultimately Convergence in the Home and in the Network

Dynamic Multicast

Always-On Static Multicast

Dynamic Unicast

Static Unicast

Dynamic Multicast

Always-On Static Multicast

Dynamic Unicast

Static Unicast

Scheduled Programming

Smart Phone

Simple IP Settop

Data/Video

Internet Video

Video Gateway

Data/Video

Data/Video

Data/Video

Data/Video

Data/Video

Data/VideoData/Video

Data/Video

Data/Video

Data/Video

Data/Video

Data/Video

Streaming and Storage

Linear Broadcast Video

SDV Video

VoD/nPVR Video

CDN

HFC Network

(remains unchanged)

Intranet / Internet

Intranet / Internet

Web Tablet

Home

Streaming over DOCSIS3.0

▪

DOCSIS3.0 bonds multiple 6 MHz channels -

4x34 mbps = 136 mbps-

8x34 mbps = 272 mbps-

16x34 mbps = 544 mbps

▪

Inside such a large delivery pipe, it is possible to take advantage of “organic” self-averaging of Variable Bit Rate (VBR) streams

VBR VBR

mbps

time

CBRCBR

time

mbps

Savings

▪

Peaks of information inside un-

correlated VBR streams are unlikely to occur at the same time instances.

▪

I-frames of streams encoded with variable GOP size occur at random, un-correlated intervals

▪

As a result, the streams naturally self-average

their composite bit rate resulting in a more predictable composite stream with Peak to Average (PAR) value closer to 1

View of Individual Streams

21 streams MPEG4 HD streams each peaking at ~ 20 mbps

Same Streams Packed into 40 mbps Channels

6 to 7 RF (6MHz 256 QAM modulated) channels are needed to deliver 21 streams

40 mbps

Same Streams Self-averaging inside 160 mbps

4 bonded RF channels can deliver the same 21 streams

160 mbps

VBR Self-averaging inside 320 mbps

48 HD Video VBR streams packed into octal-bonded DOCSIS3.0. That’s 6 more than 2 x 21 in two quad-bonded

4 RF channels used8 bonded RF channels can carry 48 streams

320 mbps

Topics of Discussion▪

Drivers of Capacity Pressures

▪

Technology Solution Alternatives-

HFC bandwidth expansion (450 Mhz, 550, 750, 860, 1GHz)

-

Analog recapture -> All Digital (but still a lot of analog TVs)-

Higher order compression (MPEG 4) and modulation (1024 QAM) (limited by installed base of set-tops)

-

DOCSIS 3.0•

4 channels yields 160 Mbps

-

IP Video-

Service Area Segmentation

32

Segmentation Solutions▪

Reduce service group sizes –

fewer users sharing

bandwidth▪

Relatively low cost way to gain capacity

▪

Only approach that increases both forward & reverse capacity

▪

Can be done incrementally where needed, when needed▪

Optical multi-wavelength techniques now take cost of adding fiber out of equation

▪

Amplifier to node upgrades -

Segment amplifier cascades for service group size reduction.

-

Labor (and cost) can be reduced by up to 40% by reusing the amplifier base and eliminating coax resplicing.

33

Segmentable Nodes Network View

34

4 x 4 Segmentation Segmented Amplifier Cascades

Existing Fiber is Being Exhausted Need Emerging for Fiber Reuse Technology

www.arrisi.com 35

Late 1990’s Mid 2000’s Late 2000’s

Tx

Nodes NodesTx

Tx

Tx

Tx

Tx

Tx

Tx

Tx

Existing fibers approaching exhaustion

Tx

Tx

Tx

Tx

New Community

32X the Capacity of Late 1990’s

Topics of Discussion▪

Drivers of Capacity Pressures

▪

Technology Solution Alternatives-

HFC bandwidth expansion (450 Mhz, 550, 750, 860, 1GHz)

-

Analog recapture -> All Digital (but still a lot of analog TVs)-

Higher order compression (MPEG 4) and modulation (1024 QAM) (limited by installed base of set-tops)

-

DOCSIS 3.0•

4 channels yields 160 Mbps

-

IP Video-

Service Area Segmentation

-

Fiber Deeper and Optical Evolution

36

37

Graceful Evolution Using Existing InfrastructureFiber Deep -> RFoG -> EPON

ARRIS Confidential

Thank You

Questions?

38