Energy is a big topic in the cable industry as operators look for ways to ride the green wave while reducing costs. Looking at the SCTE's energy pyramid, the access network accounts for more than 70% of an MSO's power expenditures, and therefore, should comprise a big component of any efficiency discussion, said Greg Whelan, principal, Greywale Insights.
When looking at the access network from an energy perspective, however, North American MSOs tend to include the outside plant and headend/hubs, but not CPE because they currently do not pay for the power usage of devices inside the customer's home.
"This is shortsighted," Whelan said. "CPE is the big pole in the tent. If you argue you don't have to pay for it, you miss the point. With virtualization, you do reduce the power consumption in the CPE which you don't pay for and move the functionality into the data center, which you are paying for."
By big pole, Whelan means approximately 11 watts per home for CPE, paid for currently by residential customers. In comparison, a maxed-out CMTS or OLT amortized comes out to about 0.4 or 0.8 watts per home. As for the technologies used in the outside plant, without CPE, PON at 0.33 watts per home was on the low end of the power scale due its passive nature. A remote PHY/MAC setup where the node is moved closer to the home is 0.30 watts per home.
Cable operators can make impact with their energy efforts by following a three-pronged approach, Whelan said. The first items are things that apply to any business, including using alternative forms of energy like solar and wind, and changing light bulbs.
The second is at the system level and follows Moore's Law. In other words, rebuilding with newer chips will save power.
The third is to make sure network architectures are energy aware. This could be as simple as building a new hub next to a waterfall to utilize alternative energy, or architecting so that packets are routed through a city where power costs less.
The reality is that operators can't run their business solely focused on energy. If a competitor comes into a neighborhood with a 1 Gbps service, a company cannot do only 500 Mbps even if it were determined to be greener, Whelan said. However, there is business value to having an energy strategy. If 2-5% of customers in a competitive neighborhood are eco-sensitive and a company comes in and says they are green, they might attract half of those folks, or 2.5%, on this basis.
"(Or) they can reduce churn. There is a marketing benefit to having a comprehensive energy strategy .... The whole operation should in my opinion become more efficient. It will help drive the cost out of the system and drive innovation," Whelan said, adding that having a strategy in place also could help stave off regulators.
"Putting together a multi-faceted energy strategy gives ton of business benefits and drives earnings per share," Whelan said. "This isn't all about energy. It is about business. If you are focused on business, energy is a big win."