Cable cos test system to expand HD, keep costs low

By Yinka Adegoke

NEW YORK (Reuters) - Cox Communications said on Wednesday it is testing a technology that allows cable operators to offer more bandwidth-hungry high definition (HD) programming by delivering a television station only when the user tunes in.

The technology called switched digital video is just one step in a battle by cable companies to fight off competition from the advanced TV services of telecommunications rivals and from satellite operators who claim leadership in HD.

Cox and cable peers including Time Warner Cable Inc and Cablevision Systems Corp are looking to switched digital to maintain their offering of premium TV services and keep costs low in an escalating battle for network bandwidth.

"HD is absolutely a bandwidth hog and cable operators can offer virtually unlimited programming when they go to switched digital," said John Connelly, executive vice president at BigBand Networks Inc, which is providing privately held Cox with switched digital technology.

Cox, the third-largest U.S. cable operator with 5.4 million homes, is initially rolling out the technology in its northern Virginia market.

Switched digital costs in the tens of millions to integrate into a cable operator's existing system, saving space for more channels and faster Internet speeds by only delivering programs when they are ordered.

Use of the technology could trim the bills for cable companies spending up to $80 billion worldwide by 2012 to meet bandwidth demands for combined video, voice and Internet services, according to some analysts.

Telecoms companies like AT&T Inc and Verizon Communications Inc are spending nearly $25 billion over the coming years to offer advanced digital video services.