Cable Cost Per Bit on a Downward Run

Cable cost for delivering each bit is reaching for the bottom of the pit. Bob Stanzione, CEO and chairman of Arris Group Inc., affirmed that the cable cost to deliver each bit is decreasing very rapidly.

According to him, it decreases at a rate that is roughly inversely proportional to traffic increases.

Stanzione believes that when downstream traffic rises at 50 percent per year, then the cost per bit for delivery decreases at the same rate.

As MSOs starts to implement super-dense Converged Cable Access Platform (CCAP) products, probably sometime next year, these costs will lower radically.

This, in return, would help cable MSOs make the push toward an all-IP infrastructure.

Daniel Moloney, President at Motorola Mobility Inc., said that the industry should, again, start paying attention to the traffic patterns as they are following an upward trend.

Even when cable costs are decreasing, DOCSIS 3.0, which can bond multiple channels together, is increasing.

Mark Palazzo, VP and GM of Cisco Systems Inc. (Nasdaq: CSCO)’s Access Network Business Unit, said that the downstream port costs are about $500 per downstream on the vendor’s 3G60 cable modem termination system (CMTS) blade.

This compares to $4,000 per-port costs four years back. Though Palazzo didn’t comment on a set target for CCAP port pricing, he did say that they are anticipating a cost less than $500.

So heading around the circle, we see the cost of data go down as the amount of data increases, which brings us to the question of why broadband providers are dropping unlimited data plans to put data caps in place?