Message Font: Serif | Sans-Serif
 
No. of Recommendations: 85
Warning: LONG POST

Put that in your pipe and smoke it

Like drug users, trying to figure out if they should use a pipe, roll it in papers, use a hookah, or bake it in brownies, broadband users will have many ways to get their fix. I think that cable is the most efficient way to deliver the goods over the next few years. Eljar, you may be right about 10 years vs my previous thought of 5....here's why:

|
|
|
|
|
|
|
|
|
|
| |
| |
| |
||| |||
| |
| ||||||||||||||||||
|
|||||||||||||||||||||

(In case you didn't know, "|" is a pipe symbol).....

Phone lines

OK, let's talk for a minute about pipes....first there is the telephone wire, which had its humble beginnings way back when in the 1980's and could deliver 300 bits per second (bps). Since letters, numbers etc. take 8 bits in the ASCII character set (disregarding the error checking and correction bits that are thrown into the signal), this equates to roughly 300/8 = 37 1/2 characters per second.....many people can type faster than this...you could see green characters print across your dark green IBM PC (with its 4.77 MHz processor).

BPS vs baud rate....Baud is how fast the flow of data comes across the line...it actually was increased until it hit a limit of 2400 baud....but the bits per second kept increasing until 9600 BPS was reached in the late 1980s...how? Through compression of the original signal by several means such as sending different signals at roughly the same time through a modem (modulator demodulator) and having the demodulator on the other side decipher the waves and spit out the same digital signals that were modulated into analog to go across the phone wire.

By the early 90's, 14.4 Kbps (Kbps are thousands (really 1024) of bits per second)was reached and was thought by many to be a theoretical limit...not so, clever engineers were able to double this twice more (28.8 and 56 K).....then came ISDN, which gave up to 128K, though the price for this service was exorbinant.

Now along comes DSL, which totally blows away the old thinking by delivering over 1 Mbps (Millions of bits per second) through the same old phone lines (though they have to be a certain distance and have a certain line quality to reach these speeds).

While the theoretical limit is better stated as not known (since who knows what technological gurus will come up with next), they are having a harder time increasing the bandwidth over the venerable old POTS (Plain Old Telephone System) lines.

Yet many media hypsters rave about DSL as being able to smoke Cable pipes.

Cable pipes

What they don't state is that 75 ohm coaxial cable was developed with broadband in mind, carrying multiple television signals at the same time. Who knows what the theoretical limits are? They haven't been tested, since they are just now being deployed throughout the US and several other countries.

Hybrid Fiber Coax (HFC)

The upgrades that E@H encouraged through giving stock to its cable company owners based on their performance in these upgrades are known as Hybrid Fiber Coax (HFC). What this means is that the fastest transmission medium around at the present time (literally operating at the speed of light), that is, fiber optic cable (the Fiber part of HFC) are strung as loops from the cable plant in each metropolitan area that is served. The Coaxial cable, mentioned above, that you are used to via cable TV, is the C in HFC. The connection between the Fiber Optic Cable and the Coaxial Cable takes place at nodes along the Fiber Optic Cable, each serving between 500 and 1500 homes. These nodes, which propagate upstream and downstream signals between the two types of cables constitute the Hybrid, or H, in HFC.

While this system operates by sharing the bandwidth of each node among the subscribers' coax cables and can thus slow down if more people are connected, it is flexible enough to allow the technologists at @Home and the cable companies to fix any bottlenecks that occur. These are widely reported and have been thought of as a weakness in the cable broadband infrastructure.

The future

With wireless and satellite being mentioned as the future of broadband technology, both of which require transmission of signals through the atmosphere, there are some major hurdles to overcome to get them to come close to approaching the speed and lack of transmission and receiving problems that the landlocked (telephone and cable) systems enjoy. In addition, the problems of how to have millions of people get uplinks for transmitting signals to satellites has not been solved and wireless broadband is still a ways away. Once again, given the unbelievable profit potential and the technological marvels that have come about in the last century, these hurdles very well might come down at some point in the future.

In the meantime....

In the meantime, the vast majority of people who are connected to the internet today do so over the old POTS 56K modems. This form of computer connection to outside networks has enjoyed its dominance for close to 20 years. It came into its own with the creation of bulletin board services and proprietary services (e.g. AOL, Compuserve and Prodigy) that could give you fast access to a wealth of data. It was further enhanced when the speed got to 28.8 K (fast enough that graphics could be viewed the same day<g>), and NetScape came out with the Navigator browser. This allowed the Internet, which was the playtoy of a few physicists from around the world to become what it has today.....so 20 years of POTS domination (and counting)....

Cable broadband service is just beginning. Wherever it is deployed, it will takeover as the preferred way to connect. This point, while debated by DSL backers, will become more obvious as time moves along. There are several reasons:

1) By stringing up fiber optic cable throughout cities across the US, Canada and several other countries, cable has taken the lead in getting the fastest transmission medium closer to the end user. While they still use existing cable lines as "the last mile" (the most expensive place to upgrade because each home that wants the service must be individually connected to), this is the closest any major data carraige has come to fiber optic cable being delivered straight to your house.

2) The last mile of the POTS system has inherently less bandwidth, even with Digital Subscriber Lines (DSL) and will require much more expense to match what the cable companies are currently in the process of.

3) In addition, DOCSIS standards are being developed by the various cable systems to ensure equipment such as cable modems can be standardized and thus produced in volumes cheaply. The fact that there are currently two major infrastructure developers (@Home and RoadRunner), as well as Paul Allen's venture, means that there are not too many cooks to spoil the standard's soup. Contrast this with DSL standards, which are in relative disarray, and you'll see that cable stands to take advantage of standards well before DSL.

This is not to say DSL will not have its place. By offering a direct line to the metropolitan plant, security and other benefits do go to DSL. These benefits are more tangible to businesses, most of whom are not wired for cable, anyway. That's why @Work is pushing DSL in it's efforts.

How long will Cable Broadband reign, once it becomes dominant?

This is a good question, but given the fact that cable broadband has been talked about for years and is still in its embryonic stage, it shows you that once it becomes established, it will take a long time (not just in internet time) to knock it off the throne of data connectivity. Many people like to talk about these things as if by talking about the next wave of technology, it will magically appear at your doorstep tomorrow. This talk gets investors in ATHM frustrated as they continually see the talk and don't see the action.

The action is coming. Once it arrives in earnest, you'll be glad you invested not only in ATHM, but in the other companies that support it.

All that said, the information and entertainment that we will enjoy will come from more different types of pipes in the future than we are used to today. I can't imaging a phone plugged into a cable wire, can you? It will happen, and it will probably be a video phone, to boot (Jetsons, here we come).

Good Luck and sorry for the long winded post. I've posted substantially the same thing before, but there are quite a few people who've come on the board since then, so I thought it was due for a reprise right before the Q4 report next week.

Good Luck all,

Scott (nole1)
Print the post  

Announcements

Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.