Charter to Beef Up Broadband

Facing an erosion of analog cable subscribers that defected to direct broadcast satellite, Paul Allen’s Charter Communications is regrouping by juicing up its broadband network.

Hardware giant Cisco Systems said Monday that Charter selected its DOCSIS 1.1-qualified Cisco “uBR10012” cable modem termination system (CMTS) router for expansion of broadband services.

The announcement follows Charter’s recent news that its cash flow for the third quarter would fall because it had lost some basic (analog) subscribers to direct broadcast satellite providers. Instead of cash flow growth of between 14 percent and 16 percent, the company is expecting 13 percent growth for the quarter, largely because it lost subscribers to its basic analog service.

With DBS broadband considered an inferior IP service because of latency issues with connectivity, cable providers see broadband via set-top boxes as a key competitive differentiator. They also see Voice over IP — delivering voice services as part of a voice/data/video package in one monthly bill, as a key to revenue growth out of a difficult economic environment. Cisco is considered a leader in building VoIP hardware systems.

Cisco said the new “uBR10012” would enable Charter to economically scale its network of high-speed data services to residential and business customers. The St. Louis-based Charter has already test-driven the router in its Tennessee, South Carolina, Michigan, California, Wisconsin and Missouri markets.

Cisco’s “uBR10012” router is the San Jose, Calif.-based company’s flagship CMTS router. The company said it its architecture is backed by the widest selection of line cards, 1+1 or 1+N redundancy. It also features advanced spectrum management abilities and works with Cisco’s “uBR7200” Series CMTS family of routers.

The ability to upgrade older routers with newer ones is critical in helping cable companies quickly scale up their broadband services, company officials said. In this case, Charter is expected to deploy the “uBR10012” router within its highest density locations and cut down on congestion. Its less dense markets with the service will be serviced with the “uBR7246VXR” family of routers.

Charter counts nearly 6.8 million customers across 40 states, many of them in small markets. Despite its cash flow problems and a lingering malaise afflicting a cable industry whose big investments in IP-centered products now weigh on their balance sheets, Charter is among the more aggressive cable companies rolling out new digital cable and data services.

By the end of this year, Charter is expected to pass the one million mark on counting cable modem customers.