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SBC: IPTV's Day Has Come

Light Reading
News Analysis
Light Reading
4/22/2005
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LAS VEGAS -- NAB2005 -- The RBOCs have tried IPTV before and failed, but SBC Communications Inc. (NYSE: SBC) told broadcasters here this week that it's an idea whose time has come.

“So why now?” asked Jeff Weber, SBC's VP of product and planning for Project Lightspeed. “I’ve already been asked this question a thousand times and it’s already come up today: 'The telcos have been down this path before -- what is it that makes you think that SBC can pull it off this time?' ”

Weber’s fellow panelist, Steve Hawley of Seattle-based IPTV consultants Advanced Media Strategies, raised the point just minutes earlier. “The telephone companies were doing this as long as 12 to 15 years ago," Hawley noted. "Some of you may remember the Bell companies' video-on-demand trials back in 1993.”

One example: Pacific Bell (now part of SBC), said in 1993 it would spend $16 billion to hook up 5 million homes to a fiber optic "information superhighway" that would provide multimedia programming, video on demand, and support videophones by the year 2000. California residents are still waiting for those videophones, by the way.

But Weber says that past failures aren't indicative of future projects. "At the highest level, the economics look dramatically different today than they did ten years ago,” he claims.

“The improvements in compression technology, the ability to do switched video instead of broadcast video, the technology development on a scale around the world makes [IPTV] real. As these standards evolve -- and I think SBC can help provide that -- the scale and the economics come down, driving the deployment costs [down].

“Because we don’t have to take fiber all the way to the house to enable video into the house, rather than spending $40 billion dollars, we can spend four, five, or six billion dollars."

And Weber didn’t fail to mention the defensive motivation behind SBC’s IPTV effort: “The competitive environment is meaningfully different than it was 10 years ago -- wireless has taken a meaningful share of our total voice business, which we all know cable is getting in.”

For the most part, broadcasters and other content creators here say they're excited about the entry of telcos into IPTV, because it creates a new, competing distribution channel. They say IPTV will give broadcasters more leverage when negotiating content licensing agreements with cable and satellite players (see MSOs Yawn at Lightspeed).

Weber then progressed to the “slideware” portion of his presentation. He displayed several mock-ups of SBC’s Project Lightspeed interface, which included a rough-looking interactive channel guide, a box for chat, and an IPTV content panel. Another slide displayed user interaction services like photo and music file sharing with chat (see Inside SBC's IPTV Factory).

SBC says it will indeed spend between four and six billion dollars to deliver the fiber optic cable needed for IPTV and other services to 18 million U.S. homes. The fiber will give SBC customers connection speeds of 25 Mbit/s to 30 Mbit/s, Weber says.

Interestingly, he says SBC will not attempt to compete on price. “That is not where we think we can demonstrate our value to the marketplace. We’re going to have a superior product, and we want to be priced accordingly...

“I am scared and greedy,” Weber said, playfully mocking an earlier panelist's description of the big telephone companies (see SBC Puts on a Happy Face).

Whatever the motivation, SBC believes that the revenue opportunities in IPTV are substantial. “There’s upside, there’s real revenue, and we can do it because of the economics in a way that makes sense. The time is right -- that much is clear.”

— Mark Sullivan, Reporter, Light Reading

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lilgatsby
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lilgatsby,
User Rank: Light Beer
12/5/2012 | 3:18:07 AM
re: SBC: IPTV's Day Has Come
Question: 25-30mb (assuming GPON) to each subscriber does not deliver enough bandwidth to offer much more than internet, VOIP, standard channels, and very limited HD-channel support. If a home has more than one TV and is watching HD on both/three/etc, or when the request for VOD is initiated, or when HD is being recorded on a dvr while other HD channels are being viewed this should max-out the "pipe" very quickly and start dropping one or more paid for services.

Deploying a service that doesn't seem equal to current offerings today via cable or satellite...where is the value?

The business case must exist, but the xPON strategy doesn't scale today...why keep adding layers of duct tape? Other options must exist, right?

Am I missing something?

lg
pnni-1
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pnni-1,
User Rank: Moderator
12/5/2012 | 3:18:06 AM
re: SBC: IPTV's Day Has Come
Yeah! Do some homework first before posting.
paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 3:18:05 AM
re: SBC: IPTV's Day Has Come
lilgatsby,

What you are missing is that with MPEG4-AVC coding or the equivalent, you could fit 2 HDTV steams + 2 SDTV streams + web surfing in 25 Mb/s.

On top of that, you will get more than 25 Mb/s per sub out of a GPON. As an example, one could keep the 3rd wavelength (if one were so disposed) and run the broadcast TV over the 3rd wavelength just like a cable system.

The big issue with satellite and cable that is partially solved in telco architected IPTV is better theoretical support for unicast flows for personalized content. Given the switched nature of the video, the subscriber drop problem is solved for both broadcast and unicast video. The next bottleneck is upstream of the OLT or DSLAM.

seven
photonsu
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photonsu,
User Rank: Light Beer
12/5/2012 | 3:18:03 AM
re: SBC: IPTV's Day Has Come
I get it! DWDM to the home, just in case. Now there is a truly economical solution. Maybe Ciena can play a role here!

But seriously, what about high bandwidth applications that can't or don't have MPEG4-AVC encoding capability? IPTV means more than content from traditional providers, does it not?

PONs are outdated, high cost, limiting, and require low margins for the providers of the technology. In short, PONs are not healthy for the industry at large and are totally unnecessary. Why are they there? I'll not go into that sad discussion.

lilgatsby
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lilgatsby,
User Rank: Light Beer
12/5/2012 | 3:18:03 AM
re: SBC: IPTV's Day Has Come
seven - thanks for the input, although I'm not quite sure about what your reference to wavelengths has to do with it unless you're trenching to Dr. Huber's home.

Isn't the GPON divided into 32 even parts? How does this splitter environment handle multicast video streams? My suggestion was that 30mb will get filled fast, and yes - it will be oversubscribed and drop services, and with PON's mediocre QoS...this might be your HD broadcast of Survivor...or Monday Night Football, imagine the backlash!

Then the next phase will be to replace the GPON that replaced today's BPON that replaced yesterday's APON...I'm buying stock in duct tape.

lg
paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 3:18:02 AM
re: SBC: IPTV's Day Has Come

Well I was not planning to teach you all about PON systems, but PONs can be either 2 or 3 wavelength in the ITU standards. If they are 3 wavelength systems, the 3rd wavelength is a 1550 downstream transmission equivalent to an 870 Mhz cable TV system.

No, the bandwidth is not evenly divided. The bandwidth is divided via traffic contracts. Think of it as 2 GigEs downstream and 1 GigE upstream statistically shared between 32 homes (this is the GPON standard). Splitters optically divide the light so all ONTs see the downstream traffic and a TDMA like structure (with Dynamic Bandwidth Allocation) in the upstream.

Also, it is quite possible to multicast on both ends of the PON. A reasonable cable channel lineup could be contained in 1 Gb/s downstream with the other 1 Gb/s used for VoD and websurfing etc.

I take it that you actually know very little about PON systems. My suggestion is that you read the G.983 and G.984 standards.

In ATM PONs by the way, ATM traffic management is quite obtainable. This could be done in GPON as well, but Ethernet traffic management is more likely.

seven
paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 3:17:59 AM
re: SBC: IPTV's Day Has Come

Nobody deploys GPON in any significant quantity. OSI and Flexlight together have under 5,000 subs on GPON. I don't believe that anybody will use a 3 wavelength system. I was just trying to explain the standard.

3 wavelengths does not double the cost of the ONT by the way. Also, 80% of the video market is cable. It is not clear that Multi-cast IP Video will actually be better. There is not a single thing that can be done on an IPTV system that can not be done on a cable system. There are already middleware/set tops that support both home and network PVR, VOD, web portals, HDTV, PPV, all of it. Even better they are already deployed in small quantity (say 150,000 subs).

seven
optoslob
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optoslob,
User Rank: Light Beer
12/5/2012 | 3:17:59 AM
re: SBC: IPTV's Day Has Come
Brookseven, Is anyone actually deploying 3 wavelength GPON systems?

Seems like a silly idea to me! doubles the cost of the ONT and delivers "cable look alike" analog/QAM64 digital TV but usually with lower CTB/CSO performance. why try to do this when Mpeg4 over multicast works so much better?

optoslob
OldPOTS
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OldPOTS,
User Rank: Light Beer
12/5/2012 | 3:17:50 AM
re: SBC: IPTV's Day Has Come
In Texas legislature, cities and phone/cable companies are negotiating a swap from municipal fees on phones and cable bills. Replacing them with a sales tax. Fees compensating cities (~2% revenue) for public right of way. Proponents say sales tax will end city feuds with telco & cableco.

But critics contend that this would hurt consumers through significant increase in sales tax. Phone companies want to avoid different rates in each city. Cableco contend (regular TV adds every day) that this will weaken the city's ability to make SBC and VZ serve IPTV and the other new BB technologies to all city neighborhoods, rich and poor, like cableco are required to do. See SBC.com marketing plans to serve the neighborhoods where the most ARPU is.

Following the big money for the politicians.

OldPOTS
pilpel
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pilpel,
User Rank: Light Beer
12/5/2012 | 3:17:49 AM
re: SBC: IPTV's Day Has Come
1.GPON rate is 2.5Gbps at the downstream, which means 78Mbps for each subscriber (assuming max 32 subscribers) - currently only FlexLight networks can provide such rates.

2.For HDTV, assuming 15Mbps for each channel, we get 5 different HDTV channels for each and every home (160 different HDTV channels in total !!!!) which is more than enough.

3.There is still need for video overlay (a third wavelength) it all depends on the service providerGÇÖs headend technology.

pilpel
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