technology breakfast at scte cable-tec expo...

TECHNOLOGY BREAKFASTat SCTE Cable-TEC Expo 2006

Denver Press Club

Denver, ColoradoJune 22, 2006

Bob Stanzione, Chairman & CEOJim Lakin, President BroadbandJim Bauer, VP Investor Relations

Todd Kessler, VP Product ManagementTom Cloonan, CTO Broadband

Welcome

Bob StanzioneChairman & CEO

3 SCTE Technology Breakfast June 2006

Safe Harbor

This presentation contains forward-looking statements concerning projections of revenues, income and other financial items; plans and objectives for future operations, products and services; future economic performance; and the assumptions underlying or relating to the foregoing. The statements in this presentation that use such words as ”believe," "expect," "intend," "anticipate," "contemplate," "estimate," or "plan," or similar expressions are also forward-looking statements. Actual results may differ materially from those contained in any forward-looking statement or from those which could be expected to accompany such statements. Specific factors which could cause such material differences include the following: the timing of the introduction and the performance factors of certain new ARRIS products; design or manufacturing defects in our products which could curtail sales and subject us to substantial costs for removal, replacement and reinstallation of such products; manufacturing or product development problems that we do not anticipate; an inability to absorb or adjust our costs in response to lower sales volumes than we anticipate; loss of key management, sales or technical employees; decisions by our larger customers to cancel contracts or orders as they are entitled to do or not to enter into new contracts or orders with us because of dissatisfaction, technological or competitive changes, changes in control or other reasons. Other risks involve capital spending levels by our customers based in part on demand for broadband services, customer adoption of our technologies, the development and marketing of technology by our competitors and the risks associated with potential acquisitions of competitors, additional lines of business and/or product and services offerings. The above listing of factors is representative of the factors which could affect our forward-looking statements and is not intended as an all encompassing list of such factors. We disclaim any obligation to update publicly or otherwise these statements, whether as a result of new information, future events or otherwise.

ARRIS FlexPath™ Solution DOCSIS®-based Wideband Now !

Todd KesslerVP Product Management


ARRIS FlexPath™ Solution Agenda▪ Market Situation for Wideband Service▪ FlexPath™ Technology History and Overview▪ Migration to FlexPath Service▪ Conclusion


Agenda

▪ Market Situation for Wideband Service▪ FlexPath™ Technology History and Overview▪ Migration to FlexPath Service▪ Conclusion


Market Trends Driving Wideband in the 2006-2007 Timeframe▪ High-bandwidth applications are becoming real

− Increased Data, Voice, and IP Video traffic requires more bandwidth per subscriber

− Commercial services, video downloads, IPTV, & other applications will all require more bandwidth

▪ PacketCable™ Multimedia (PCMM) allows operators to monetize dynamic bandwidth needs (i.e., bandwidth on demand)

▪ DOCSIS® 2.0 physical layer improvements are enabling higher upstream throughput

▪ Telco competitive threats are increasing


New Services Create More Traffic and Consume More Bandwidth….

E-Mail

Digital MusicVoIP

DigitalPhotos

PodcastingOnline-Games

VideoMail

VideoBlogs

All Video on DemandUnicast per Subscriber

WebBrowsing

Video onDemand

High DefinitionVideo on Demand

Advanced Services Demand More Bandwidth

Video Mail

0 102030405060708090

100

Meg

abits

per

Sec

ond

per S

ubsc

riber


Agenda



ARRIS FlexPath™ Solution Provides Immediate Answer to Higher Bandwidth Needs

▪ Competition is increasingly fierce, requiring MSOs to address competitive threats on market-by-market basis today

▪ DOCSIS® 3.0 wideband support, along with many other important functions, may still be 2 years off

▪ ARRIS FlexPath technology enables MSOs to meet the competitive challenges TODAY!− Wideband deployments now through software-only

upgrade on the C4 CMTS− Forward compatibility – C4 CMTS support for both

FlexPath and DOCSIS 3.0 in the future

Protect revenues by addressing competitive threats more quickly


ARRIS FlexPath™ Packet-basedChannel Bonding Demo & Trial History

2004 2005 2006 2007

2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07

World’s 1st Channel Bonding Demo (FlexPath System at NCTA)

Lab & Field Trials of ARRIS FlexPath Technology(ex: ntl, Hanaro and others)

World’s 2nd Channel Bonding Demo (FlexPath System at SCTE)

GeneralAvailability

(August 2006)

This road map is subject to change.

Tested and reliable solutions speed deployment and reduce

operational costs


ARRIS FlexPath™ Solution –Wideband Now!▪ What is the FlexPath Solution?

− DOCSIS 3.0-based channel bonding software solution for higher bandwidths downstream and upstream

▪ ARRIS FlexPath Design Goals − Leverage C4® CMTS hardware already deployed

Software-only upgrade to launch service− Implement downstream and upstream bonding that

Addresses primary marketsDelivers a solution early in the market window

▪ Provides additional speeds MSOs require before DOCSIS® 3.0 products become available− Available before DOCSIS 3.0 spec is finalized

Cost effective solution ready today!


ARRIS FlexPath™ Operation Utilizes Existing Cadant® C4® CMTS with Software Update

New Touchstone®

Wideband Modem with FlexPath software(160 Mbps downstream120 Mbps upstream)

Any legacy DOCSIS®

Cable modem on any downstream or upstream

Up to four separate downstreams from multiple Cadant C4 Cable Access Modules (CAMs)

Up to four separate upstreams to Cadant C4

CAMs

Today’s Cadant C4 CMTS with a FlexPath Software Upgrade

40 Mbps

40 Mbps

40 Mbps

40 Mbps

30 Mbps30 Mbps30 Mbps30 Mbps

Deployed Cadant C4 CMTS Chassis Are FlexPath Solution Hardware Ready!


Mainstream Adoption of New Applications Requires Increased Upstream Bandwidth

▪ Markets require increased upstream bandwidth− Increasing upstream throughput has great value for

enterprise subscribersLeased Line SubstituteSmall Office/Home Office (SOHO)

− Residential customers also need more upstream bandwidth due to adoption of new broadband applications

▪ ARRIS FlexPath™ solution implements an upstream channel aggregation scheme that

Addresses these primary marketsDoes not impact overall delivery schedule

Capture revenues from mainstream residential and business subscribers quickly


Example Subscriber Using FlexPath™Upstream Channel Aggregation

• Video Chat

• Send E-Mail Attachment

• VPN Connection

• Sling Video

• Video Phone

• Etc.

Multiple Applications, spread across four upstream channels

Home RouterNetwork Address

Translation (NAT)


Agenda



MSO Migration to FlexPath

▪ Most wideband solutions require the MSO to dedicate downstream channels to wideband cable modems

▪ ARRIS FlexPath™ solution was designed to evolve from the MSO’s existing architecture− FlexPath solution allows all channels to be shared with

standard DOCSIS 1.0/1.1/2.0 cable modems− Cost effective for early deployments− Can also be deployed in a dedicated manner

▪ Software upgrade only− No new hardware investment needed

Protect existing hardware investment


Simplified DS Combining Network Example — Standard Service

Node1

Node2

Node3

Node4

DS DS DS DS

2Dx12U CAM #1(in existing C4® base)

2Dx12U CAM #2(in existing C4 base)


Simplified DS Combining Network Example — FlexPath Wideband Service

Node1

Node2

Node3

Node4

2Dx12U CAM #1(in existing C4® base)

2Dx12U CAM #2(in existing C4 base)

DS DS DS DS

SplittersSplitters


FlexPath™ Enables Easy and Cost-effective Migration to Wideband Today

▪ Revenue from early adopters pays for additional capacity▪ No new downstreams required for currently deployed C4®

CMTS▪ Same number of downstreams cover the same number of

nodes for the initial deployment− Very low incremental cost to initially deploy wideband services

▪ FlexPath modems and the existing population of standard DOCSIS® modems can coexist

▪ As FlexPath take rates increase, additional capacity can be added

Use existing downstreams and generate new revenues


ARRIS FlexPath™ Solution Provides Major MSO Benefits

▪ More bandwidth per subscriber▪ Technology surpasses xDSL data rates▪ Decreases incremental cost to achieve higher speeds by permitting

large-scale statistical multiplexing▪ Permits new services

− IPTV over DOCSIS®− Fast Video Downloads

Touchstone®Wideband Modem

WBM650

Cadant® C4® CMTS

ApplicationServers

PC w/Video Download App

HFC

For a typical encoded movie (2 GB file):

< 3 minutes !!!~100 Mbps89 minutes~3 MbpsDownload TimeDownload Speed


Agenda



New Revenues From High Bandwidth Applications Today!▪ FlexPath™ Technology

− More mature with more field experience than any other wideband solution

− Easy and spectrum efficient to deploy− Available today for field deployments

▪ ARRIS has worked through the technical issues− Maintaining high availability with bonded channels− Achieving high-throughput over cable networks− Tuning of the system, including PCs and servers

▪ ARRIS enables easy migration from FlexPath to DOCSIS® 3.0− C4® CMTS will support FlexPath even as DOCSIS 3.0 support is

added

Reliable solution delivers new revenue opportunities and

enables easy migration to DOCSIS 3.0

Thank You

Next-Generation CMTS Solutions:

M-CMTS & I-CMTS

Tom Cloonan, Ph.D.CTO - Broadband Division


A Few Quick Notes

▪ Roadmaps described in this talk are still evolving & subject to change.

▪ All CMTS & CM vendors participating in the DOCSIS® 3.0 standardization process are bound by the CableLabs® NDA agreement & are not permitted to discuss details of the DOCSIS 3.0 and DOCSIS 2.0b features (other than details available in the public domain).


Next-Generation CMTS Solutions:M-CMTS & I-CMTS Agenda

▪ Introduction▪Traditional CMTS, I-CMTS, & M-CMTS▪Predictions▪Conclusions


Introduction

▪ MSOs are planning for many changes in the future

▪ Let’s consider a few quick examples…


2005 2006 2007 2008 20091

10

100

1000

30 kbps

Avg. Bandwidth per subscriber (kbps)

100 kbps

1 Mbps

Example of Bandwidth Changes Proposed by one MSO


Example of CMTS Bandwidth Changes Proposed by one MSO

DOCSIS MAC

GigabitEthernet

Switching

VoDServer

Broadcast Analog Video (45 programs = 45 channels)Broadcast Digital SDTV (200 programs = 20 QAMs = 1 Gbps) & Broadcast Digital HDTV (40 programs = 20 QAMs = 1 Gbps)

Narrowcast VoD &IPTV

(13.6 Gbps / 340 QAM)

IPMetroNtwk

RF

RF

RF

RF

D5EdgeQAM

D5EdgeQAM

D5EdgeQAM

D5EdgeQAM

IP Router

HSD & Voice(1 Gbps / 32 QAM

& 128 Up Channels)RFUS

RCV

C4 M-CMTS20KHHPHub

Shift from MPEG-delivered Video to DOCSIS-delivered IPTV


2005 2006 2007 2008 20090

2

4

6

8

10

12

14

16

18

20

Total # Downstreams/SG

Total # Upstreams/SG

Total # Ports for 4-Fiber Node Service Group

Begin Channel Bonding

1

4

2

4

4

4

8

4

12

8

U:D=4:1 U:D=2:1 U:D=1:1 U:D=1:2 U:D=2:3

Example of DOCSIS Upstream:DownstreamRatio Changes Proposed by one MSO


Next-Generation Architectures Must Deliver Key Improvements to Permit MSOs to Evolve their HFC Networks

IPv4 – Address Management

• Complicated management due to limited available IP addresses

IPv6 – Address Management

• Simpler network operations and more IP devices per subscriber

Standard bandwidth

• Single channel limits the services that can be offered

Channel Bonded bandwidth

• Channel bonding increases usable bandwidth enabling new services

Fixed upstream / downstream ratio• Capital invested in unused capacity

as US/DS ratio changes

Flexible upstream / downstream ratio

• Align investment with revenue opportunity

Today

Traditional (DOCSIS® 2.0)Next Generation Network Architecture

M-CMTS and DOCSIS 3.0


Agenda



Block Diagram of Traditional CMTS

L3/L2 ForwardingC4® CMTS DOCSIS® Apps

System Controller

DOCSIS Resource Mgr

Timing

To HFC Network

To Internet

Fixed 1:6 Ratio of Downstream to Upstream Channels

RFProtection Switch Matrix

Blades

2 DN PHYs&

12 UP PHYs

2 DN PHYs&

12 UP PHYs

MAC

MAC


Block Diagram of Integrated CMTS (I-CMTS)

L3/L2 ForwardingC4® CMTS DOCSIS® Apps

System Controller

DOCSIS Resource Mgr

Timing

To HFC Network

To Internet

Flexible Ratio of Downstream to Upstream Channels

DownstreamModules

UpstreamModules

MAC

MAC

MAC

MAC

MACUPPHYs

UPPHYs

RFProtection Switch Matrix

DNPHYs

DNPHYs

DNPHYs


Edge Resource Mgr

Router/Switch

TraditionalCMTS

orI-CMTS

NCast VoDServer

SwitchedDigitalBCastVideoMgr

CM MTA STB

SG #1 Forward Path

SG #1 Reverse Path

CM MTA STB

SG #2 Forward Path

SG #2 Reverse Path

EQAM

EQAM

EQAM

EQAM

HFC Network Topology based onTraditional CMTS Architecture or Integrated CMTS (I-CMTS) Architecture


Modular CMTS (M-CMTS) Standards History

2003 2004 2005 2006

2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06

Comcast, Cox, & Time-Warner began studies of NGNA

Several vendors injected ideas & proposals

Comcast, Cox, & Time-Warner definedthe desired NGNA reference architecture

CableLabs took over spec creation &renamed it the M-CMTS effort

4 CableLabs committeesdeveloped the DTI, DEPI,DRFI, & ERMI specs

Interops


Block Diagram ofModular CMTS (M-CMTS)

• Management Control• Data Traffic• Timing Control• RF Switching Control

MAC

Session Resource Managers

Application Managers Edge

Resource Manager

Switching Control

IP MetroNetwk

Resource Manager

Fiber Node

Fiber Node

Fiber Node

Router

Timing Clock Master

UpstreamPHYs

RF Switch Matrix

DnstreamPHYs

Distributed Architecture

RF Switch Matrix


Cadant® C4® M-CMTS Core

Separating Downstream PHYs (as Edge QAMs) Permits DOCSIS & Video to Share Resources

MAC

Session Resource Managers

Application Managers Edge

Resource Manager

Switching Control

IP MetroNetwk

Resource Manager

Fiber Node

Fiber Node

Fiber Node

Router

Timing Clock Master

UpstreamPHYs

RF Switch Matrix

DnstreamPHYs

RF Switch Matrix

Use of Edge QAMs as DOCSIS® PHY elements could yield lower DOCSIS CAPEX costs for MSOs


Edge Resource Mgr

D5 EQAM

D5 EQAM

D5 EQAM

D5 EQAM

D5 EQAM

Router/Switch

C4®

M-CMTSCore

NCast VoDServer

SwitchedDigitalBCastVideoMgr D5 EQAM

CM MTA STB

SG #1 Forward Path

SG #1 Reverse Path

CM MTA STB

SG #2 Forward Path

SG #2 Reverse Path

This “Universal Edge QAM”approach could reduce the

cost & increase the flexibility of migrating from MPEG-TS video distribution

to IPTV video distribution

Separating Downstream PHYs (as Edge QAMs) Permits DOCSIS® & Video to Share Resources


Agenda



MSOs Will Select From Multiple DOCSIS®

Architectures in the Near Future

▪ Integrated CMTS (I-CMTS)− Architecture has all required CMTS modules in one chassis− Supports flexible Downstream-to-Upstream Channel Ratios− Permits support for full redundancy within a single chassis− Offers simpler management (MSO manages only one network

element)▪ Modular CMTS (M-CMTS)

− Architecture separates the downstream PHY (EdgeQAM) from the MAC and upstream PHY

− Supports flexible Downstream-to-Upstream Channel Ratios− Allows network elements from multiple vendors if desired− Permits sharing of Edge QAMs for VoIP, Video, & Data services

▪ ARRIS will offer products supporting both types of architectures

MSOs will be able to select the architecture that best suits their needs


Fixed U:D Ratio

Integrated CMTS (I-CMTS)

Modular CMTS

(M-CMTS)

Flexible U:D Ratio

Next-Gen CMTS Evolutionary Paths

DOCSIS 2.0

DOCSIS® 3.0

DOCSIS 2.0bTests (if defined)


Fixed RatioIntegrated2.0 CMTS

Fixed RatioIntegrated2.0 CMTS

Flexible U:D Ratio DOCSIS® 3.0/2.0b

Flexible Ratio 3.0/2.0bM-CMTS

Next-Gen CMTS Evolutionary Paths

Integrated CMTS (I-CMTS)

Modular CMTS

(M-CMTS)

DOCSIS 2.0

Flexible Ratio Integrated 3.0/2.0b I-CMTS

Fixed U:D Ratio


Quick review of past DOCSIS® Spec Releases & 1st Successful Cert Waves

1997 1998 2001 2002 20031999 2000 2004 2005 2006

DOCSIS 1.0Spec Issued

1st Qualified1.0 CMTS


1st Qualified1.1 CMTS (ARRIS)


2nd Qualified2.0 CMTS (ARRIS)

1st Qualified2.0 CMTS (Terayon)

2007


???

M-CMTSSpecs Issued

???

When will these new CMTS Architectures be Deployable?


Industry Predictions: 2006-20082006 2007

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

2008

Interops (2.0/2.0b)

Deployments

Interops Lab/FieldTrials

Deployments

Interops Lab/FieldTrials

Lab/FieldTrials

(since 1Q05)

This does not reflect ARRIS product plans. It is a representation of general industry milestones by all Vendors.

Pre-Standard(e.g. FlexPath)

M-CMTS

DOCSIS 2.0b(if defined)

DOCSIS® 3.0

Lab/Field Trials


Industry Predictions: 2008-20102008 2009

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

2010

Deployments

Deployments

This does not reflect ARRIS product plans- It is a representation of general industry milestones by all Vendors.

Pre-Standard(e.g. FlexPath)

M-CMTS

DOCSIS 2.0b(if defined)

DOCSIS® 3.0

Lab/FieldTrials

Lab/FieldTrials

Deployments

Deployments


Agenda



Do MSOs need a Next Gen CMTS?

▪ Flexible bandwidth allocation needed to reduce CAPEX/sub− Discrete deployment of Upstream and Downstream capacity

allows new cost-effective services like IPTV▪ Competition from DSL and FTTX is driving Channel Bonding▪ IPv6 is needed to resolve IP address exhaust for large MSO

or interconnected IP networks▪ Triple play is moving to converged IPTV, VoIP, and HSD

− This requires more bandwidth, security, and IP addresses to facilitate this shift to everything IP, everywhere

Answer: Yes…

• to reduce CAPEX in new hardware and OPEX in complex network management

• to increase revenues from new services


Conclusions

▪ DOCSIS® 3.0, I-CMTS, and M-CMTS will all be available in the near future

▪ With DOCSIS 3.0 & I-CMTS & M-CMTS, the cable industry is creating a long-term infrastructure that will dominate the edge for years to come

Thank You!

Questions?

Jim LakinPresident, ARRIS Broadband

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