In a new research report out today from ABI, the industry analysis firm explores the significance of CableLabs’ August 7 approval of the preliminary DOCSIS 3.0 specification.

 

DOCSIS, which stands for Data Over Cable Service Interface Specification, is a standard that defines methods for sending data over cable. It is developed by nonprofit research consortium CableLabs.

 

In a press release about its new research, ABI explains that DOCSIS 3.0 “is the penultimate version of a standard which will allow cable operators to reduce bandwidth usage while improving performance and capabilities on their existing networks.”

 

ABI admits that entrance of DOCSIS 3.0 won’t produce any dramatic short-term changes in the on-demand video industry, but it is nonetheless a significant step toward the development of a standard capable of, over the longer term, greatly impacting the relationship between cable operators and telco TV providers.

 

“By delivering interactive IP video to the home over DOCSIS, cable operators shift bandwidth demand on their networks to take advantage of the innovative features offered by IP video,” ABI analyst Michael Arden said in a statement.

 

Arden added: “CableLabs’ release of this nearly-final specification will allow vendors to start developing compatible equipment.”

ABI explained in its press release that transitioning to DOCSIS 3.0 will be a two-step process: first, Cable Modem Termination System (CMTS) network equipment will be replaced on the service provider end; then, customer premises equipment (referred to as CPE—cable modems and set-top boxes installed in subscribers’ homes) will be upgraded to DOCSIS 3.0-compatible equipment.

 

“2007 should see the first volume shipments of DOCSIS 3.0-compliant network equipment,” Arden predicts. He noted that Harmonic, Motorola, and Cisco already offer pre-3.0 equipment.

 

ABI’s projection is that North American penetration of in-use CMTS DOCSIS 3.0 equipment will reach almost 60 percent by 2011. The penetration of installed DOCSIS CPE will be somewhat slower, reaching 40 percent in 2011.

 

It should be noted that DOCSIS is not the only solution being developed to improve bandwidth usage efficiency. But, ABI does not think any of them can be considered serious competitors to DOCSIS.

 

In fact, the research firm thinks that “competition from telco TV providers—if it develops—may spur the cable operators to accelerate the DOCSIS 3.0 transition process.”