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Week in Review: Higher Cable Broadband Speeds Are Coming; Fox Is Going To Buy Sky TV

1. Higher Speeds Are Coming As Comcast Becomes Second Major Cable Company To Commit To Full Duplex DOCSIS 3.1

So to translate from tech-speak: Comcast and Charter are committing to using a technology called Full Duplex DOCSIS 3.1 (Data Over Cable Service Interface Specification.) DOCSIS, which has been around since 1997, is a way to squeeze more speed and bandwidth out of existing cable wires.

The cable that was laid in the 1970s and 80s tends to be hybrid fiber-coaxial (HFC.) On its own, HFC can’t provide the speeds offered by fiber optic cable. (That’s been Verizon’s big selling point for FIOS and what Google used for Google Fiber.)

But DOCSIS allows cable operators to get faster speeds out of their existing HFC wires. The latest iteration, Full Duplex DOCSIS 3.1, was introduced in February 2016 and is an improvement over the prior version, DOCSIS 3.1, that was introduced in in 2013.

In easiest terms, Full Duplex DOCSIS 3.1 allows operators to provide the same upload and download speeds— up to 10 GBPS (gigabit per second.) This is an improvement on DOCSIS 3.1 which allowed much faster download speeds (10 GBPS) than upload speeds (1 GBPS). The new system also provides significant energy savings.

Why It Matters

While speeds of 1GBPS or more are likely going to be overkill for most users, it’s a way to ensure that multiple gamers, streamers and texters can all be online at once, without any significant degradation of service. Though, TBH, it’s mostly a way for cable companies to prevent competitors with fiber optic cables from poaching their customers—10GBPS speeds are great for downloading large files (e.g. UHD movies) but in an age of streaming subscription services and online movie rentals, no one really downloads anything anymore anyway.

What You Need To Do About It

If you’re a cable company with HFC cable, you’ll want to seriously think about Full Duplex DOCSIS 3.1—as we noted above, it’s a great hedge against fiber optic providers who’ll try and convince your customers that fiber’s high speeds are worth switching for and that they’ll “never get outdated” …even as the need for higher speeds decreases.

Ahh, marketing.

 

2. Fox Is Going To Buy Sky TV

 21st Century Fox, the parent company of all Fox-named properties, reached a preliminary agreement to take over all of pay-TV giant Sky for an all-cash deal valued at around $23.3 billion. Fox currently owns around 40% of Sky, so while surprising, the deal is not a complete shock—in 2011, Fox attempted to take over the remaining 60% of Sky, but the deal was scuttled by fallout over Fox’s UK phone-hacking scandal.

Why It Matters

This is another vertical merger (programming and distribution) along the lines of AT&T/Time Warner and Comcast/NCBU. It’s not clear at this early stage what Fox plans to do with Sky—use it to distribute content overseas or try and launch a service in the U.S. (We’re banking on the former.)

Sky has advanced addressable advertising capabilities and a successful virtual pay-TV service in Sky Go. Both of those capabilities might prove to be of interest to Fox in the U.S. Though with successful Sky pay-TV services in the UK, Ireland, Germany and Italy, Fox may just be looking at an overseas distribution play.

What You Need To Do About It

Not much you can do right now until all the details of the deal are public. Though if you’re CBS, you’ll probably be glad that you started on that Viacom acquisition a while ago.