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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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optoslob
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optoslob,
User Rank: Light Beer
12/5/2012 | 3:17:47 AM
re: SBC: IPTV's Day Has Come
Seven, Thanks for the feedback on GPON, It looks like we will have to agree to disagree on the Triplexer / biplexer cost differences, I should have said cost to manufacture the ONT doubles because this is the side of the equation that concerns me the most.

ONT Cost increase is not just due to the Triplexer optical assembly but also the Analog Cable driver amplifier and the linear optical to electrical stage (check out the noise distortion figures in the BPON spec). Also the system needs a cable return channel equivalent system. This fuction is difficult to implement because it changes between settop box makers and even between cable systems, so it is typically done as a 100Mhz 8 bit ADC followed by a DSP to decode the QPSK return data and bridge this over to an IP return channel.

All this is much more complex and less flexible than a simple IPTV flow, at least at the ONT level.

opto
paolo.franzoi
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paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 3:17:46 AM
re: SBC: IPTV's Day Has Come

optoslob,

Fair enough, although I am looking at the BOM of an ONT in front of me and that gives me some comfort in my position.

In terms of complexity versus IPTV, you are correct (at some level) for an ONT. However 2 other things. First, the ONT is only 1 part of the equation. With a wavelength overlay cheap ($50) and theoretically no ($0) set top boxes can be deployed. Second, real good put through an ONT will be higher for IPTV than for just surfing and this will add cost. Third, there is an experience will 10s of millions of cable systems versus IPTV. Finally, there are only 2 set top box makers that matter. It is straight forward to license a return path for both.

seven
materialgirl
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materialgirl,
User Rank: Light Beer
12/5/2012 | 3:17:34 AM
re: SBC: IPTV's Day Has Come
Poor people cannot make Rebublican contributions. They therefore do not deserve broadband. Forget them. (Just kidding, but it is sadly true right now).
paolo.franzoi
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paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 3:17:31 AM
re: SBC: IPTV's Day Has Come

My definition of real broadband is 1 Terabit to every other human being on the planet. And it needs to be free. In fact, we need to pay for people in Africa to be connected to the network for free. Until that is done, all we have is Fraudband. You gigabit per second pushers need to dream. Where is your vision???!!!!???

seven
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:17:31 AM
re: SBC: IPTV's Day Has Come
Poor people cannot make Rebublican contributions. They therefore do not deserve broadband. Forget them. (Just kidding, but it is sadly true right now).

Everybody deserves real broadband, regardless of economic status or political affilliation. The challenge we face is making it so.
OldPOTS
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OldPOTS,
User Rank: Light Beer
12/5/2012 | 3:17:25 AM
re: SBC: IPTV's Day Has Come

USTA is also running adds in my area that 'customers don't care how TV is delivered only that the delivery methods; cable, satellite and telcos DSL/FTTU should be treated equally. So tell your represenatives'.

Cableco contend, thru regular TV adds every day, that 'SBC and VZ should serve IPTV to all city neighborhoods, rich and poor, like cableco are required to do'

But interestingly the cabelco have so far denied SBC and VZ the right to run their respose adds over cable!!!

Are they concerned about video competition?
Is this a sign that 'IPTVs Day is Coming?'

OldPOTS
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:17:20 AM
re: SBC: IPTV's Day Has Come
My definition of real broadband is 1 Terabit to every other human being on the planet. And it needs to be free. In fact, we need to pay for people in Africa to be connected to the network for free. Until that is done, all we have is Fraudband. You gigabit per second pushers need to dream. Where is your vision???!!!!??

Gigabit per second is a realistic and achievable goal. It's been proven in other countries. Meanwhile the US falls further behind.

http://www.onpointradio.org/sh...

Slipping Behind in Broadband
Aired: Tuesday, April 26, 2005 7-8PM ET

The economic promise of the Internet is ultimately about how many people can use it and how fast. The transformational promise of the Net is deeply linked to high-speed, broadband access, and all the services and applications that make it possible.

Once a leader in Internet innovation, the U.S. is now falling behind Japan and other Asian countries. Recent statistics show that the "basic" broadband services in American homes are among the slowest, most expensive, and least reliable in the developed world.

According to a new article in the Foreign Affairs journal by former Foreign Service officer Thomas Bleha, the broadband technology lag will cost America in such areas as economic growth, increased productivity, and a better quality of life.
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:17:19 AM
re: SBC: IPTV's Day Has Come
Gigabit to homes actually has not been done anywhere.b

I've never been to Hong Kong and I haven't verified it for myself, but according the the following article, symmetric 1Gbs is being offerred to 800,000 households in Hong Kong for $215 per month.

Hong Kong Broadband Launches 1 Gbps Home Service for US$215/month

Hong Kong Broadband Network (HKBN) officially launched its 1 Gbps symmetric service for the residential market. Approximately 800,000 households, out of a total of 2.2 million households in Hong Kong, are wired to receive the service. The 1 Gbps symmetric service is priced at US$215 per month.

HKBN noted that its 1 Gbps service is up to 166x faster downstream and 1,950x faster upstream than the advertised bandwidth of the incumbent's ADSL service.

HKBN Premium bb1000 service is being offered on the same metro Ethernet infrastructure that delivers the company's Mass Market bb100 (symmetric 100 Mbps for US$34/month) and Entry Point bb10 (symmetric 10 Mbps for US$16/month) services.


http://www.convergedigest.com/...
paolo.franzoi
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paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 3:17:19 AM
re: SBC: IPTV's Day Has Come

Gigabit to homes actually has not been done anywhere.

seven
paolo.franzoi
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paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 3:17:18 AM
re: SBC: IPTV's Day Has Come

Its a shared 1 Gb/s connection to the building. 1 Gb/s to the home is a GigE at least to the CO.

Try again.

seven
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