Broadcom and MaxLinear both have DOCSIS 4.0 firmly on their respective silicon roadmaps. But the chipmakers are also pursuing commitments or assurances that cable operators will actually buy the next-gen products that will cost tens of millions of dollars to develop.
Broadcom and MaxLinear appear to be taking similar yet somewhat different paths toward that goal.
According to multiple industry sources, Broadcom, the subject of a US Federal Trade Commission complaint based on its alleged monopolistic behavior with video and broadband chips, is playing hardball with DOCSIS 4.0 in the form of somewhat onerous joint development agreements (JDAs) with major MSOs, along with a desire to lock in high-volume commitments.
MaxLinear, a chipmaker that acquired Intel's Home Gateway Platform Division (which includes DOCSIS tech) last year, appears to be taking a more subtle and less controversial approach. It's focusing on "collaboration" on the technology direction that MSOs will take, along with some assurances that they will end up buying what they ask the chipmaker to develop.
A big market shift
Either way, these developments mark a significant shift in the dynamics of DOCSIS technology and product development. Rather than working and negotiating more directly with makers of DOCSIS modems, gateways and network gear, chipmakers have elevated those discussions and the testy negotiations that come with them to the service providers themselves. That has exposed cable operators to a nastier part of the business they never had to deal with as directly in the development of prior generations of DOCSIS gear.
Although the way DOCSIS 4.0 products will be developed might end up simply being different to reach the same destination, cable operators "haven't been this involved from the silicon," an industry source said. "It's been hidden by the OEMs (original equipment manufacturers) with respect to investment and commitments."
Broadcom's JDA approach and its desire to lock in volume commitments (negotiations typically start at 100% and move down from there, according to multiple sources) have become a point of contention for operators that typically have not been as privy to this part of the sausage-making. And to be fair, operators likewise report that Intel had been known to exhibit bullying behavior and tactics as well when it was firmly ensconced in the DOCSIS chip market.
However, the demands now being made of major cable operators are relatively new, as chipmakers are now seeking a higher degree of protection for the money they end up splashing on DOCSIS 4.0, a new set of CableLabs specifications that will enable multi-gigabit speeds both upstream and downstream, alongside advanced security and latency capabilities on broadly deployed hybrid fiber/coax (HFC) networks.
You get what you deserve
Sources in operator and vendor circles are also quick to acknowledge that the MSOs' own behavior and treatment of chipmakers and device makers have contributed to the rise of this new paradigm. There have been too many instances, they point out, where operators pushed vendors to develop new technologies and products only to not opt to buy them in the end. Some of Comcast's early work around Full Duplex DOCSIS (FDX) – that at one point or another involved Broadcom, Cisco, MaxLinear, an Israel-based startup called Capacicom and others that didn't pan out at the time – is one relatively recent example prompting this change in Broadcom's strategy and attitude, sources familiar with the situation say.
"I don't begrudge them," says a cable engineering exec familiar with how this process has gone so far, referring to Broadcom. "The operators created this kind of scenario."
"They've been allowed to act this way," another industry source said of Broadcom. "The operators rewarded their behavior. They don't get to enable it and cry about it at the same time."
But not everyone feels that way. Some are flatly upset with Broadcom's recent behavior, even if they feel that some cable operators are partly to blame for enabling it.
"They are being bullies," an industry source from the vendor side of the business said of Broadcom. The chipmaker's overbearing, hardball tactics, the person added, might also force some cable operators to give stronger consideration to fiber-to-the-premises upgrades, rather than DOCSIS 4.0, as their next step.
Broadcom, an industry source familiar with the DOCSIS market said, is pressuring operators in Europe and the US to commit their full DOCSIS 4.0 plans to the chipmaker. Although it's not known if any operators have fully succumbed to that pressure, they risk being left out in the cold when Broadcom is ready to roll with D4.0 if they don't play ball, the person added.
And if enough operators do commit to anything near 100% volumes with Broadcom, that would certainly hinder the possibility of a healthy two-supplier market. To ensure there's a robust enough market for two silicon suppliers, the minimum commitment for either one should be at 45%, the source suggested.
Comcast, Charter Communications and Cox Communications are among the US operators that have signed DOCSIS 4.0-focused JDAs with Broadcom, multiple sources said, though the exact terms of those agreements are not yet known. Cox, a Comcast X1 syndication partner, confirmed it has signed a JDA but didn't elaborate; Comcast and Charter declined to comment.
Industry sources say that other Comcast syndication partners, such as Canada's Shaw Communications, Videotron and Rogers Communications, have been dragging their feet on the issue but could ultimately sign on as well.
Broadcom did not respond to Light Reading's inquiries about its DOCSIS 4.0 tech roadmap and its pursuit of the JDAs with cable operators.
DOCSIS 4.0 bifurcation also fueling the issue
The bifurcation of DOCSIS 4.0 itself has also made the path forward somewhat jagged. Comcast remains a somewhat lonely champion of the FDX flavor of D4.0, which relies on echo cancellation technology to allow upstream and downstream traffic to run over the same block of spectrum. Most other operators are taking a closer look at D4.0's Extended Spectrum DOCSIS (ESD) approach, which involves an eventual spectrum upgrade to 1.8GHz while continuing to keep upstream and downstream traffic separate.
That added layer of uncertainty and questions about whether FDX and ESD will or won't be supported in one chipset or will need to be supported on two different chips have only exacerbated the issue.
MaxLinear debating its final direction
MaxLinear doesn't expect to reveal much about its D4.0 plans until later this year but confirmed that it's on board. "It's a major piece of our business today and it's definitely a piece of our roadmap moving forward," Will Torgerson, vice president and general manager of MaxLinear's Broadband Group, said of the chipmaker's DOCSIS-facing plans.
But how exactly the D4.0 piece of the roadmap will be fulfilled is still being debated. And that's, again, at least partly due to the bifurcation of DOCSIS 4.0 between FDX and ESD, and the ongoing questions about which of the approaches will be adopted most heavily by the operators.
That bifurcation "has created a lot of angst, I guess, for folks like me that have to spend $100 million on developing something," Torgerson said. "I'm trying to drive the right things out into the market."
And the direction of that drive and the bet MaxLinear ends up placing will be influenced by cable operators. For this new generation of DOCSIS, it will be the service providers, not the OEMs, that will be making the big call.
"The large [operators] are going to be the ones that drive that market ... I've got to make sure I've got a customer tied to it," Torgerson said. "So, we want to make sure we are picking the right targets and we have the right partnerships in place."
MaxLinear wants some assurances from operators about the direction they are headed in and the products they will actually buy, but it's stopping well short of the extreme approach that Broadcom appears to be taking.
"We want something that says we're collaborating," Torgerson said. "We want to have something that says, this is the path we're going down, as far as at least ESD or FDX, to make sure we're not trying to drive a bunch of work that nobody's going to use. That's always been my concern here and that's the main thing."
And it's not yet clear from MaxLinear's perspective how it will develop its D4.0 silicon. Torgerson said it's possible to support both ESD and FDX on the same chip, but he isn't convinced that's the way to go given the various tradeoffs.
Thanks to the echo-cancelation requirement, FDX will require more silicon overhead, in the form of both power and die space, than ESD.
"If the market ends up being heavily extended spectrum, then you've got a lot of extra silicon that you're carrying around," Torgerson said. "It's a bit of a TBD situation right now on how we make that call."
Given that the costs of "wafer starts," or the initiation of manufacturing, are at a premium today, "you don't want to waste any silicon area on a function that's not being used," he added.
Broadcom appears to be going in a different direction. Broadcom hasn't announced its D4.0 product roadmap, but sources say there's an expectation that it will build one chip that does FDX and ESD, governed in one direction or the other by the firmware. That approach could cause the suppliers to build different SKUs – some for FDX and some for ESD – that contain the same core chipset. However, it's unlikely that such a device could be "flipped" from FDX to ESD mode, at least for the first generation of D4.0 products.
Does this really change anything?
It's too early to know how the D4.0 silicon market will shake out. One industry source's gut feel is that Broadcom could continue its dominance on the network end and still get its fair share of the D4.0 CPE business, but likely come up well short of the massively high volumes it actually wants. MaxLinear is also expected to remain a key player and fight for share, if it can get a few large operators to come on board.
Should it go that way, the DOCSIS 4.0 era, even with the bifurcation issue, could end up looking much like previous DOCSIS generations from the standpoint of the silicon and device market. One big difference is that the contention and battles occurring beneath the surface will be more heavily focused on the chipmakers and the major operators, with the device makers seemingly playing a less strategic role on the side, awaiting their orders from the industry's true power players.
— Jeff Baumgartner, Senior Editor, Light Reading
A version of this story first appeared on Light Reading.