Cogeco 2013 Annual Report Download - page 15

14 COGECO CABLE INC. 2013 Management's discussion and analysis (“MD&A”)
CABLE SERVICES NETWORKS AND INFRASTRUCTURE
Cogeco Cable provides Television, On-demand video services, HSI access, Telephony services and Business telecommunications services
through advanced fibre optic and two-way broadband distribution networks in Canada and the United States. Cogeco Cable delivers these
services through ultra-modern long distance fibre optic systems, advanced hybrid fibre-coax ("HFC") broadband distribution networks, point to
point fibre networks and fibre to the home ("FTTH") network technologies.
Our distribution network expands over 56,000 kilometres in Canada and the United States, of which over 25% is pure optical systems. Its leading
edge's inter-city optical transport networks extend for a distance of over 10,800 kilometres in Canada and the United States. The broad reach
of Cogeco Cable's core transport network is designed to easily interconnect, at very high speed, its many local distribution systems to video
content providers, other public telephony networks, software application providers and to the world-wide Internet.
For residential services, Cogeco Cable is deploying optical fibres to nodes serving clusters of typically 350 to 450 homes passed, with multiple
fibres per node in most cases to rapidly extend the capacity of the system with smaller clusters when necessary. This just in time process, known
as “node splitting,” leads to further improvement in quality and reliability while increasing the capacity of two-way services such as HSI, Video on
Demand and Telephony and maximizing the efficiency of capital investments. The HFC distribution infrastructure is designed with Radio Frequency
("RF") capacity of 450 Megahertz ("MHz"), 550 MHz, 750 MHz, 860 MHz or 1 Gigahertz ("GHz") of bandwidth capacity, depending on the market
served and customer needs.
In each market, the signals are transferred from the optical network to the coaxial cable network at the node for delivery to its customers. We
believe that active use of fibre optic technology as a supplement to coaxial cable plays a major role in expanding channel capacity and improving
the performance of the systems. Fibre optic strands are capable of carrying hundreds of video, data and voice channels over extended distances
without the signal amplification typically required for coaxial cable. Cogeco Cable will continue to deploy fibre optic cable as warranted to further
reduce amplifier cascades which improve picture quality and system reliability, and reduce system maintenance cost. This hybrid combination of
fibre optic and coaxial cables is the most efficient choice when it comes to deliver high quality networks with judicious capital investments.
In order to increase distribution system capacity further, Cogeco Cable is completing two network enhancement programs:
a) conversion of video services from analogue to digital with the deployment of digital to analogue ("DTA") converters
to its customers having older analogue television equipment. This significant capacity enhancement will replace each analogue
channel by up to four High Definition ("HD") channel or sixteen Standard Definition ("SD") channels; and
b) conversion to SDV technology. This technology allows Cogeco Cable to selectively broadcast the digital television channels
that are currently being viewed by customers, effectively allowing it to offer a greater selection of digital channels over the
same network infrastructure.
Cogeco Cable Canada completed at the end of fiscal 2012 a first phase of its program converting in digital signals analogue channels
in its systems. Subsequent phases of its program to convert the remaining channels are underway and expected to be completed this year in
majors systems and within the next two to three years in smaller systems.
Cogeco Cable uses Data Over Cable Service Interface Specifications ("DOCSIS") systems to deliver HSI and Business Internet Protocol services
over HFC networks. DOCSIS has numerous advanced features, including the prioritization of packets to ensure a continuous transmission and
high quality of service delivery. This prioritization is important for services that need to be transmitted in real time, such as Telephony service. In
addition, this technology provides a flexible and expandable platform to further increase IP transmission speeds up to 160 Mbps and beyond and
for providing other products like symmetrical services, which are particularly well suited for commercial customer applications.
Finally, Cogeco Cable is deploying FTTH systems in new residential developments which meet specific criteria of size, proximity to the existing
plan and service penetration rate. Cogeco Cable uses a FTTH technology called Radio Frequency Over Glass ("RFoG"). The primary benefit
of RFoG is its compatibility backward and forward with existing Cable Modem Termination System ("CMTS") investments and back-office systems.
RFoG is an excellent platform for the delivery of enhanced video services and higher speed internet services in the future.
The following table shows the percentage of Cogeco Cable’s homes passed in Canada and the United States where Digital Television, Video on
Demand Services ("VOD"), HSI and Telephony services were available as at August 31, 2013:
% of homes passed where service is available
Service Canada United States
Digital Television 99% 99%
Video On Demand 96% 86%
HSI 97% 98%
HSI (DOCSIS 3.0) 89% 88%
Telephony 94% 98%