Weary of going town to town to get into the TV biz, the Bells want Washington's help

 

Last summer, phone companies turned Indiana into ground zero in their war with cable and satellite providers. Armies of lobbyists for Verizon Communications Inc. (VZ ) and AT&T Inc. (T ) descended upon Indianapolis and kvetched about the state of cable television. Having invested billions of dollars to upgrade their communications networks so they were capable of offering TV service, the phone giants wanted a law making it easier to actually offer it.

 

Their entry into the market has been as slow as a dial-up connection because U.S. law requires them to negotiate so-called franchise agreements with thousands of municipalities, town by town by town, across the U.S. That process can drag on for years. So phone companies are pushing states such as Indiana to let them speed up the process.

In January, after the Indiana legislature introduced a statewide franchising bill, the fight turned nasty. Attack ads funded by the cable industry rained down like hailstones. One, featuring a blonde-haired girl in a field of wildflowers, claimed the bill would "raise our taxes by millions of dollars" and allow the "phone companies to provide video services to only the wealthiest neighborhoods."

The negative blitz didn't work, though. On Feb. 28, the General Assembly passed the bill by a vote of 78 to 18. Governor Mitchell E. Daniels Jr. signed it into law on Mar. 14, boasting that the bill would spark big investments in the state. "In politics, momentum is everything," says AT&T Senior Vice-President James W. Cicconi. "And right now there is incredible momentum behind reforming the franchise."

 

For all the talk about broadband technology and video-content agreements, the biggest hurdle to phone companies sending TV into homes has been getting local government approval. Of the 301 franchise negotiations that Verizon is working, 107 have been dragging on for more than a year, according to a letter it filed on Mar. 8 with the Federal Communications Commission.

Sun Microsystems may have already found its first customer, in a Korean IPTV system, for its DReaM (DRM Everywhere Available) open source DRM, a system that is not meant to be completed for at least another 12 months.

This was revealed by the director of conditional access at Korean company Alticast, as he was speaking at a Sun Microsystems event at the end of March. Alticast revealed plans to build the DReaM conditional access system into an IPTV pilot, but also to build a commercial product based on it for implementation throughout the Far East. Sun says it is still between nine and 15 months away from a product, but since this is based on an Open source process, code exists already for most of the system.

This week Sun released the source code for two components of DReaM, its DReaM-CAS (Conditional Access System) and DReaMMMI (Mother May I) the underlying mechanism for always asking a central resource for permission to access content. In papers that Sun put out this week it has described both of these processes. DReaMCAS or D-CAS currently only manages access to content in the MPEG-2 format.

Sun told us in October that it plans to create a royalty-free, interoperable DRM technology, independent of any specific hardware or operating systems which focuses on the concept of a user being given access to content, rather than one specific device being authenticated. This is something that may come more easily to Sun, since it can rely on the Liberty Alliance initiative which is was also behind, for allowing a single copy of a persons identity to act as a trust source for other services, without having to reveal identities to other services.

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Recent speculation about problems with Microsoft's new Internet Protocol television software could give Siemens, the German telecommunications equipment giant, just the opportunity it's looking for to break into the emerging IPTV market.

Siemens, which makes equipment used by phone carriers to deliver broadband Internet access, claimed its stake in the IPTV market in April when it announced it was buying a small software company called Myrio, which specializes in IPTV software.

The next step is taking on Microsoft. The software giant is already considered by many to be the leader in this nascent market, with a software package that manages distribution of video content from the time it's picked up from a network until it reaches the set-top box in the home.

Though dozens of smaller companies offer pieces of the IPTV software solution, Microsoft is the only one that offers one-stop shopping for all the necessary applications. Microsoft offers software that lets operators acquire broadcast and on-demand programming from multiple sources, such as ESPN or HBO. It also sells software that manages the content and subscribers, and an operational- and billing-management system. On the consumer side, Microsoft also provides the software that sits in set-top boxes and provides viewers with a multimedia program guide.  [ more... ]

Engadget writes, "In part one of our interview with Bill Gates, published yesterday, we chatted with him about the next Xbox console, whether or not Microsoft is going to come out with a competitor for the PlayStation Portable, and the future of Windows Mobile. In today’s second and final installment we asked him about HD-DVD vs. Blu-ray, IPTV, Windows Media Center and DTV, and why the Tablet PC has struggled so much in the marketplace."  [ more... ]

Matthew Friedman writes, "After the false starts of the late 1990s, North American telecommunications carriers are salivating at the prospect of delivering television to consumers over their IP networks. However, a new report from Forrester research notes that, for all their excitement, "it is a long road from today's flashy Consumer Electronics Show (CES) demos to mass adoption of telco IPTV."

Nevertheless, report author Maribel Lopez notes that the carriers' success in IPTV will depend on a lot more than pulling broadband connections to subscribers' living rooms. "Listening to telco pitches, you would think that it was simply a matter of flipping a switch to deliver TV to any consumer anywhere," she writes. "But before telcos can launch a widespread TV offering, they must replace part of the copper plant with fiber, update the billing and provisioning system to support video, and bulletproof the equipment that will go into the home."

The carriers are far behind cable providers, their main competition in television delivery, and it's going to cost a lot for them to catch up. The price tag on SBC's network upgrade plans is a cool $4 billion, and Verizon will add 3,000 to 5,000 outside plant engineers at considerable cost to upgrade 2 million copper lines to fiber by the end of 2005."  [ more... ]

Derek Kuhn writes, "Video is not a business for the uncommitted or inexperienced player. Cable companies have had years of experience in acquiring and delivering content to subscribers and have had several years' experience in developing their pay-per-view (PPV) - and in some cases VOD - businesses while they converted their networks to two-way to support high-speed Internet (HSI) services. Coupled with the increasing acceptance of high-definition television (HDTV) by both the content producers (all major U.S. networks now offer an HDTV broadcast) and consumers (The Yankee Group3 estimates that more than 40 percent of U.S. households will have HDTV-capable equipment by 2007 and 90 percent of those equipment owners will subscribe to an HDTV service from either a cable/MSO, DBS or telco provider), it is clear that telcos must commit today to enable their networks to drive revenues in the future."  [ more... ]

"IPTV content streams -- like other IP services, such as VOIP -- are subject to spoofing, spamming, content theft, and other types of hacks, broadcast industry folks here say.

In contrast to the analog world, where tampering with the content meant using black-market hardware to unscramble a signal, IPTV encryption takes place on the software level. So hacking into a system is really just a matter of writing some malicious code. And that's got some carriers and content providers worried (see LR's TIC: Get Me Video ).

Several kinds of IP-based attacks are possible on IPTV networks. In the IPTV world, for example, spoofing is possible, but there's no precedent yet, according to Jim Veres, VP of advanced engineering for Widevine Technologies Inc.

“Hackers can spoof an IPTV network by trying to pretend they are a headend and flowing content down to your set-top box that might not be appropriate,” Veras says. “The question is how does somebody make money doing that -- although I don’t understand why people do denial-of-service attacks either.”" [ more... ]

"Between the bandwidth of fiber, the advances in compression technology, and the upcoming launch of additional satellites, the IPTV market and the satellite market will soon have the ability to offer hundreds of HD channels.

Sounds great? Well… yes and no. If you didn’t like the, uh, “openness” of OpenCable, you’re probably not going to like IPTV and satellite. At least with OpenCable the consumer stands a chance of having a choice in set-top boxes."  [ more... ]

Tcom&dtvro Co., Ltd. today announced the introduction of the TD530, one of the industry's first H.264 IP set-top boxes (STB) for IPTV applications in Korea. Offering a feature-rich, interoperable solution, the TD530 will be demonstrated at the National Association of Broadcasters (NAB) Conference in Las Vegas, April 18-21, and available for viewing in the Tcom&dtvro booth #SU9723 C/E in the Korea Pavilion.

Powered by TI's TMS320DM642 digital media processor, the TD530 enables advanced interactive multimedia applications such as voice over IP and TV over IP for carriers, targeting the corporate, hospitality and retail markets. As a result of the DM642's high performance, the TD530 also supports Microsoft's Windows Media Video 9 Series and performs on screen display (OSD), anti- flicker filter and video decoding in tandem, TI's programmability also affords TCOM&DTVro ease of design to support a variety of set top box models and new codec profiles in software.  [ more... ]

Yahoo! News: "Coaxsys today announced what it calls the largest in-home deployment of IPTV home networking products in the United States. The company said that Consolidated Communications Inc., the nation's 15th largest local telephone company, is now offering IPTV service to its subscribers using Coaxsys' TVnet. 

TVnet technology transforms a subscriber's existing TV coaxial cable infrastructure into a high-speed, IPTV-ready digital entertainment network. It delivers up to 104 Mbps transfer rate and supports distances up to 250 feet. TVnet is also compatible with TV splitters and supports Ethernet unicast, multicast, and broadcast.

Once a TVnet adapter is connected to the video or broadband source, all other coaxial jacks in the home become network enabled. Other TVnet adapters can then be connected to any network-enabled device to provide access to the Internet, share peripherals, or stream high-quality digital audio and video, including multi-channel TV and HDTV signals."  [ more... ]

Converge Network Digest, covering one of the NAB 2005 Keynote presentations, writes, ""FiOS will change the competitive landscape in the video marketplace, both now and in the future. From Day One, we'll offer a new technology, a new business model and a new customer experience," said Ivan Seidenberg, the chairman and CEO of Verizon, speaking at the National Association of Broadcasters (NAB) conference in Las Vegas. So far, Verizon has deployed its fiber-to-the-premises network in more than 100 communities across its service territory, and it plans to reach a total of 3 million homes by the end of this year.

Seidenberg is convinced that consumers will prefer the flexibility and integrated lifestyle enabled by IPTV. He said Verizon would offer more local content than cable or satellite. It will also provide upstream speeds will give customers multimedia and interactive capabilities such as sharing family videos, video on demand, 3-D gaming and setting camera angles for sporting events. FiOS TV will also offer HDTV and DVR (digital video recorder) functionality on multiple TV sets. Seidenberg said he is committed to protect intellectual property in a digital universe, specifically that Verizon will help broadcasters address retransmission issues in ways that expand the market for both the company and the broadcasters.

Seidenberg also said that Verizon is committed to partnering with broadcasters on the policy issues related to Verizon's entry into video. Citing the requirement that Verizon obtain a franchise from local authorities to provide cable service, Seidenberg noted that, as a local telephone company, Verizon has always had a franchise to deploy and operate its networks. Now, he said, the company is being asked to obtain a second franchise to use these networks to compete in video."

Press Release: "Part of MRG's IPTV Tracking Service, the new IP TV Market Leader Report--March 2005 measures the competitive position of 62 suppliers for 223 service providers (an increase of 30% over the previous report), serving over 2 million subscribers. The global Report ranks these 62 hardware/software suppliers for their "market position" and "growth opportunity" in Asia, Europe, North America, and the "ROW" in each of six market sectors, including analysis of which service providers buy the most products within each sector.

"The IPTV market is still in early development," states Bob Larribeau, MRG Sr. Analyst, "so it is prone to unpredictable market dynamics." Some of the sector highlights include surprises: in the Middleware sector, Microsoft joined forces with Alcatel, winning long-term contracts with SBC in the U.S. In Set-top Boxes, while competition remains balanced among multiple suppliers, such as Motorola, Pace, Amino, Kreatel, i3 and others, Yuxing gained strength in Asia based on its deployment in PCCW/Hong Kong. In VOD Servers, while Kasenna and Bitband maintained leadership in North America and Europe, respectively, Entone won a big contract with PCCW (Hong Kong), which strengthened its position in China."  [ more... ]

Digital Video Editing reports that, "Modulus Video, Inc. is demonstrating full frame rate 1080i high definition (HD) video delivered at 5.5 Mbps -- the lowest bit rates yet achieved by a real-time AVC encoder -- through 10.5 Mbps. This achievement underscores Modulus' commitment to delivering the highest quality video at the lowest bit rates and has profound implications for new satellite, cable, and telco IPTV services that must deliver high fidelity HD images using limited available bandwidth.

Lower bit rates mean that service providers can more readily meet demand for increased channel count, new bandwidth-intensive HD channels and additional digital television services. Visitors to the Modulus booth at NAB 2005, SU9636, can compare the remarkable quality of the 5.5 Mbps video stream alongside a 10.5 Mbps HD video stream.

"This is the strongest example to date of the full power AVC offers to broadcasters," said CEO and Chairman Bob Wilson. "NAB provides a unique opportunity for broadcasters to evaluate new technology, so we decided to be very aggressive with this demonstration. The combination of the sheer horsepower and elegant design in the ME6000 enables Modulus to show not only what we can do now at 10.5 Mbps, but, to also illustrate the anticipated evolution of the product over time.""  [ more...]

Digitalwebcast.com reports that, "SkyStream, the leader in IP video delivery solutions, today announced the integration of its MPEG -4 AVC headends, the Mediaplex and iPlex platforms, with set-top boxes from Advanced Digital Broadcast (ADB), Astri, i3, Sentivision, and Thomson.

By giving service providers flexibility and choice with a wide-range of proven MPEG -4 AVC set-top box options and potential applications, SkyStream is offering a complete, interoperable solution to enable roll-out of end-to-end MPEG -4 AVC-based services. SkyStream's AVC complete solution works with any leading middleware and leading digital rights management (DRM) or conditional access (CA) solutions that service providers select for their deployments

SkyStream's headends will provide MPEG -4 AVC encoding and transcoding to convert MPEG -2 content to an MPEG -4 format, for transmission over any type of network to an MPEG -4 set-top box. This ability to deliver high-quality content at low bit rates generates substantial bandwidth and cost savings for service providers offering IPTV, Video-on-Demand and content delivery over any last mile network. SkyStream's MPEG -4 AVC solution uses highly efficient algorithms, including CABAC and CAVLC, to produce superior broadcast video at half the bit rate of MPEG -2."  [ more... ]