If you want to understand the future of Cable TV from a technology perspective, you need to check under the hood at recent Israeli IPO, BigBand Networks (NASDAQ: BBND). Really interesting stuff, as I've written on previously.

In short, this company, complete with its stable of technologies and Tier 1 cable customers, is really a late stage venture company that went public a bit prematurely. After a recent IPO, management needs to run the company according to a certain operational maturity that the Street requires. Earnings have been really lumpy and the stock price has paid the piper.

Well, as I speculated in the aforementioned article, BigBand announced today that it will be shuttering a small division in Boston that works on its CMTS (Cable Modem Termination System) technology. This is part of a larger restructuring plan that will ultimately end in layoffs for about 15% of its staff. It's a move that a Morgan Stanley analyst thinks is "the first step in the road to recovery."


On the bright side, the company announced that Comcast (NASDAQ: CMCSA) has chosen BigBand as its switched digital video vendor. This is another feather in the hat for a company that is the arms dealer in the arms race between telcos and cable companies to offer video services and applications. With the most widely deployed switched video solution (SDV), BigBand has seven of the top 10 largest service providers in the U.S., selling to companies like Time Warner Cable (NYSE: TWC) and Verizon (NYSE: VZ). The company is also positioned to benefit from what analysts call TelcoTV (video delivered over DSL).

There are some operational issues here. Investors should keep an eye on this one as management has to regain credibility through performance. But for a small-cap bet on the future of video delivery, this could be a winner.

Note: Miller has no no position in any of the positions mentioned above.

Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Visit AOL Money & Finance for more earnings coverage