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Midco Virtualizes Cable Headend Functions

Changing cable economics

Cable operators are in the midst of transforming their networks, changing both the technologies that underpin their services and their overall operating processes. Midco, a regional cable provider, headquartered in Sioux Falls, South Dakota, has embraced this opportunity for change by virtualizing their headends. 

Midco partnered with Cisco to transform their cable access network, first by digitizing with Remote PHY and now they have become the first operator to virtualize with the Cisco Cloud Native Broadband Router (cnBR). The network transformation that Midco is undertaking has been a thoughtfully designed and planned process. It’s aimed at delivering the highest quality of service to their customers, upgrading their network to DOCSIS 3.1, and economically scaling their network capabilities. As a prerequisite to virtualizing their headend functions with the Cisco cnBR, Midco laid the digital foundation for their network transformation with Remote PHY and a modernized IP-based interconnect network.


Midco is changing the operational economics of their cable access network with cloud native software by:

  • Virtualizing traditional headend network functions
  • Scaling network services throughout their market regions



As a regional cable operator, based in the Midwest, United States, the Midco network spans thousands of miles and provides services to more than 385,000 customers. The geographic distribution and population density of Midco’s serviceable market has been a traditional challenge in terms of how they approach their network architecture. The uneven population distribution in the region means there are great distances between densely populated urban centers and the numerous rural communities in between.

As cable operators are aware, determining the placement and capacity of headends for maximizing subscribers’ services is a balance of costs and return on investment. This balancing act can be especially challenging for sparsely populated regions where the upfront capital expenditures needed for building and/or upgrading headends and hubsites has traditionally been cost-prohibitive. These costs are also compounded by increases in overhead and operating expenses. Placing a headend in a rural location to service a small community is rarely profitable and is not viewed as a sound business strategy.

However, advances in technology that support a distributed access architecture (DAA) are transforming the traditional mindset and economic barriers for cable operators like Midco. Getting to a DAA takes many steps. The first step is the digitization of the access network. As an early adopter of Remote PHY for digitizing their access network, Midco found a win-win scenario. They could make network upgrades that improve services for their customers and also reduce their operating overhead. By deploying Cisco Remote PHY Shelves and Cisco Remote PHY nodes, Midco is effectively extending the digital reach and control of their network to be closer to their customers. They are improving their customer’s quality of service while also improving control and insight for their own network operations. In addition to deploying Remote PHY, Midco also began modernizing their interconnect network, replacing analog fiber equipment with digital.

By strategically planning their network upgrades with Remote PHY and complementing it with a framework for a Converged Interconnect Network (CIN), Midco has begun virtualizing their headend functions with the Cisco cnBR. Faced with the need to begin upgrading and scaling existing cable modem termination systems (CMTS), Midco’s decision to switch from big iron headend hardware to a compute-based infrastructure is a significant one. By virtualizing the CMTS, Midco has adopted a new operating model with new subscriber-service economics. Compared to traditional solutions that come as large block upgrades, in chunks of approximately 56 service groups at a time, the cnBR can scale from one to an infinite number of service groups. Virtualizing headend functions with the cnBR brings new economies of scale to cable operators. With the cnBR scale is agile and elastic, which allows providers such as Midco to agilely scale up and or down to best fit the needs of their target markets. For Midco and its geographically distributed service areas, the cnBR is a scalable solution for delivering top-tier services to once uneconomically reachable, smaller, rural communities.

Midco performed their first trial of the cnBR in Mobridge, South Dakota, which is a market that was too small to justify installing and operating traditional big iron headend equipment. Undeterred in their mission to support DOCSIS 3.1 throughout their network and provide valuable gigabit services to their customers, Midco found a way to scale network services that delivers value to both the company and their subscribers. The carefully planned digitization with Remote PHY and modernization towards a Converged Interconnect Network (CIN) serves as Midco’s foundation for enabling virtualization. By replacing analog connections with digital ones, Midco’s access network can now connect into cloud systems for virtualizing services, functions, and optimizing resource utilization. In this instance, Midco deployed a 1RU Remote PHY Shelf for small hub site consolidation with the cnBR virtualizing CMTS functions. Compared to purchasing and installing a traditional CMTS with a capacity-to-cost floor and ceiling that is inextricably tied to dedicated hardware, the cnBR comes at a fraction of the cost with infinite and granular scale. In addition, the cnBR delivers up to 85-percent savings in physical space and reduces the operating overhead in terms of power and HVAC.

Virtualizing with Cisco’s cloud native, open standards design, using microservices and software containers is greatly simplifying our development and deployment of new functions while reducing our time to market with new services. Its ability to economically scale for big and small customer regions, as well as its high-level performance, are true differentiators.

Jon Pederson, Chief Technology Officer, Midco

Virtualizing headend functions marks a departure from traditional cable operations. Migrating from a hardware-based CMTS to a virtual CMTS isn’t done in a vacuum. Midco laid the groundwork for this architectural shift with Remote PHY. The cnBR can be placed when and where it is needed, opening new markets, upgrading legacy CMTSs already in service, and complementing their existing cBR-8 CCAPs. Virtualization, particularly cloud-native virtualization, is designed to deliver the level of agility and web-scale that cable operators need. With the cnBR, Midco will significantly reduce their time to market with their new ability to develop and deploy new services on demand. As subscriber needs change and capacity needs increase, Midco and their network are already prepared to adapt and grow with them.