CableLabs aims to boost industry profile with Sunnyvale outpost

 Real Estate Reporter- Silicon Valley Business Journal

You may have never heard of CableLabs, but it’s safe to say that its inventions are probably living inside your home.

From its Colorado base, the nonprofit industry skunkworks — sometimes called the Bell Labs of the cable world — has developed many of the technologies that power the country’s $97 billion cable industry.

Now the organization has its sights set on Silicon Valley in an effort to draw more talent, investor and corporate interest into the cable ecosystem.

CableLabs, founded in 1988 and funded by cable operators, is building out a 17,000-square-foot space at 400 West California Ave. The office at Sunnyvale Business Park is located in the same building that Twitter leased this spring, and will consolidate a smaller office that was opened two years ago in San Francisco.

On tap: a combination R&D lab, outreach center and “co-innovation space” for potential tech partners that CEO Phil McKinney says will boost the industry’s presence here.

It’s not lost on McKinney, the former chief technology officer of Hewlett-Packard who took the CableLabs job last June, that the Valley is commonly associated with the disruption of the cable industry (just witness Los Gatos-based Netflix’s, or San Bruno-based YouTube’s role in the so-called pay-TV “cord cutting”).

The increased visibility, he said, is designed to show investors, tech companies and engineers that cable as a platform is not too shabby, thank you very much.

“We want to expose the unique capabilities of cable infrastructure (to the Valley), and educate all companies large and small that cable is a great platform to innovate on top of,” McKinney told me earlier this week. “It touches 90 percent of U.S. homes. If you want to offer that kind of service, not a bad platform and reach.”

In fact, suppliers such as Cisco Systems Inc., Intel Corp., Broadcom and others are major partners in the industry. Their presence here made opening the office something of a no-brainer, McKinney said.

“We looked at the Valley, plotted out all the companies large and small that have interaction with the cable industry, and that drove us to narrow down the search parameters for the space,” McKinney said. “There’s probably three dozen companies today that are already engaged with the cable industry based in the Valley.”

CableLabs’ importance to the cable world is hard to overstate, said Bruce Leichtman, president and principal analyst of Leichtman Research Group Inc.

“With consolidation in the industry, there are fewer players than in the past,” he said. “So having an organization focused on the current and future technology is important to the industry.”

Staking a claim in Silicon Valley is the right move, Leichtman said, who also said it’s time for the industry to take credit for fostering much of what makes high-speed Internet possible.

“The reality is, without cable, broadband wouldn’t be that far,” he said. “For as much attention as Netflix gets, it’s miniature to where the cable industry is.”

His research shows cable subscribership relatively flat — the 13 largest multi-channel video providers in the U.S. lost roughly 345,000 net video subscribers in the second quarter, LRG said. But those providers still boasted nearly 94.6 million subscribers.

CableLabs’ vision

The organization is working on new technologies that are speeding data transfer, network capacity and picture resolution.

To that end, a portion of the Sunnyvale outpost will serve as development labs, where CableLabs engineers can work with vendors building products.

“We literally have one of everything used in the cable industry worldwide, so a tech company can come, sit down, and say, I want to test it against a Comcast infrastructure or a Time Warner infrastructure,” McKinney said.

Another piece of the lab will serve as “flex space” for tech companies and startups interested in applying their product to a cable platform, McKinney said. Space for meetings and events will occupy another sizable chunk.

Overall, CableLabs has 175 employees, with 110 of them engineers. McKinney said the Sunnyvale office would have perhaps three dozen staff there, up from the five that were in San Francisco.

Its biggest project right now is “Docsis 3.1,” a new specification that will support speeds orders of magnitude higher than what’s currently standard. That will help drive adoption of thinks like 4K-resolution television, a much higher-quality resolution TV experience.

“Our biggest challenge is to convey a message of innovation around the cable platform,” McKinney said.

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