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Viodi View Newsletter - May 11th, 2005 Issue

Indie Telco Local Content Workshop Advertisement

Is IPTV Enough?

By Ken Pyle, Viodi, LLC

IP Television is one of the hot telecom topics of 2005. One of the questions raised in last week’s series of planning calls for the upcoming IP Video @ Supercomm conference is whether IPTV can be rolled out fast enough to meet the needs of the telcos. And when IPTV is rolled out, will it be sufficiently differentiated from the alternatives of satellite and Hybrid Fiber Coax?

These were just some of the questions posed by the panelists last week. With over 40 speakers and each one with a strong unique point of view, I suspect there will be some thought provoking answers to these and many other questions surrounding IPTV. Here are some of the challenges that will be addressed during this two day conference:

• Can IPTV be deployed fast enough? Brian Sugar, Vice President of Marketing for 2Wire suggested that there are many hurdles for telcos to pass in order for them to be able to compete effectively with the incumbent video operators. These hurdles include regulatory, content differentiation, system build-outs and economics. He may be somewhat biased, as 2Wire offers a unique solution for telcos moving into the video space.

  The 2Wire solution, as written about previously in the Viodi View, is centered around a gateway-like, set-top box that integrates satellite receiver, off-air tuning, Digital Video Recording, DVD player (or optional recorder), home video networking, high definition reception and high speed Internet. It also has USB interfaces to allow customers to upload directly their photos and music, without the need for a PC. Broadcast content can be delivered via satellite or off-air, while on-demand or, as available, IPTV content can be delivered via the high speed Internet connection.

  2Wire estimates that the cost to deploy a satellite/DSL combination is roughly 50% and 70% less than it would be to deploy either fiber to the node or fiber to the premise, respectively. Their first customer is SBC. SBC plans on using it to extend the SBC Yahoo! DSL experience beyond the desktop and to the televisions and stereos. As an indication of the seriousness of this announcement, SBC and 2Wire formed a partnership, SBC Media Solutions, in early 2005 to market the set-top. As Sugar points out, this box may be a key element to SBC’s overall video strategy.

• Operational support and business support systems could be considered the foundation for IPTV services to scale to level that is required for success. Mike Riley of Lucent Technologies has made a career out of the challenges surrounding these back-office processes. In our discussion, he pointed out that as telcos move into video delivery they have to be conscious of two fundamental differences between their existing POTS and future full-service network.

  First, in the POTS world, a telco only had to be concerned about opening a connection. In today’s world, they are also potentially providing the content. Secondly, the telco was only responsible for ensuring the signal delivery to the network demarcation, typically at the side of the home. With video distribution, that demarcation has moved to the set-top box inside the customer’s home.

• Convincing the customers to take the new services is another challenge for new operators. The panelists on the “Success cases of Telco deployment of video and broadband services” know this as well as anyone. This panel will have an interesting mix of speakers representing the smaller operators (Howard Juul of INS), the medium (Scott Sandall of D & E), the large (Pierre Costa of SBC) and the international (Paul Berriman of PCCW). I am especially interested to hear how PCWW has used techniques like selling set-top boxes at retail and including “free” channels as part of their DSL package to go from zero to 400,000 subscribers in just a few years.

• Local content is another proven way to differentiate an offering. One of the independent telcos that has been creating some innovative local content is TCT West in Wyoming. Rod Collingwood will discuss some of their local content initiatives, including a CSPAN-like offering that highlights local politics.

  Joining Rod on the local content panel is Roger Bindl. Roger Bindl has been spending quite a bit of time with independent telcos this past month learning and documenting, via various videos, what their IPTV efforts. He kicked off the month with a short video, Twisted Pair that made its debut at the Wis-Kino 48 hour Kabaret; a comedy on twisted communications in a world of new communications.

  He followed that effort with TelcoTV in Wisconsin - leaders in the
  nation, which is a telecom documentary describing how Wisconsin has led in the nation in adopting new technologies and services. As a monthly contributor to public access WYOU in Madison, WI, Roger is uniquely qualified to speak about the challenges of local content production from the view point of an independent producer.

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