& cplSiteName &

SBC Sees IPTV Interference

Light Reading
News Analysis
Light Reading
1/4/2005
50%
50%

Legal battles over cable franchising may add a hurdle to SBC Communications Inc.'s (NYSE: SBC) planned rollout of IPTV service later this year (see SBC: 'Let Us Entertain You!').

Attorneys and industry advocates from SBC, the cable industry, and municipalities are already jousting over whether TV channels piped through the Internet are bound by franchise law, and the courts seem to be where the debate is heading.

The battle is worth watching because SBC and other phone companies could wind up forfeiting 5 percent of their return on investment to local authorities if the franchising rules are shown to apply.

The franchising agreements formed between TV providers and municipalities typically include standard provisions for reliability, customer service, billing cycles, public access channels, and the payment of a franchise fee.

National Cable & Telecommunications Association (NCTA) president Robert Sachs fired the first salvo in the IPTV debate in a speech to the Washington Cable Club on December 14. Sachs said there is no distinction between the technology used to deliver cable television in the Telecommunications Act of 1996, the law which set forth the franchising rules.

The business plan for SBC's Project Lightspeed, Sachs said, aims to target what it calls “medium-“ and “high-value” customers -- those willing to pay $110 per month for services -- with its IPTV offering. “To protect against ‘cherry picking’ certain neighborhoods based on income, the Communications Act requires local franchising authorities to ‘assure that access to cable services is not denied to any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides’,” Sachs says.

SBC says the NCTA’s motives are not really rooted in serving the public. “It’s not surprising that the head of the cable association would speak out against what we’re doing, because he’s afraid of the competition,” says SBC spokesperson Mike Balmoris (see MSOs Yawn at Lightspeed).

SBC argues that its TV service isn't the same as a broadcast or cable-provided service. To make that point, SBC’s lawyers are relying on a November ruling by the Federal Communications Commission (FCC) exempting the VOIP carrier Vonage Holdings Corp. from the jurisdiction of state utilities regulation and placing it under federal jurisdiction. The FCC’s central reasoning behind the decision was that Vonage’s VOIP service was not affected by state borders in any way and should not be regulated as such (see FCC Shields VOIP From States and Vetting SBC's VOIP).

“This is an IP platform,” Balmoris says. “It’s the same as when the cable companies provide telephone service over IP; there is no regulation at the local level.” Balmoris says SBC last year filed a forbearance petition with the FCC which states its view that IPTV should be exempt from the franchising agreements. The agency recently extended its deadline to respond, and is now expected to give its view by May 2.

But SBC isn't waiting that long to start digging up neighborhoods. Construction is set to begin this quarter to deploy SBC fiber close to customer locations to provide new, feature-rich, IP-based services, including IP television, VOIP, and fast Internet access. Project Lightspeed is expected to reach 18 million households by year-end 2007.

Balmoris said SBC’s response to any legal challenge from municipalities -- those potentially losing out on franchise revenues -- depends on the circumstances and timing. “We’ll cross that bridge when we come to it,” he says.

For the cable industry, the connection between the Vonage decision and an SBC exemption from local TV franchise rules is too big a stretch. “That decision was specific to voice,” says NCTA spokesman Brian Dietz.

The cable industry, and some localities, are citing language in the Telecommunications Act to support their argument that TV is TV, whether IP or not, and the franchising rules apply to phone companies. “The Act is really very clear on franchising; there is really no need for further interpretations on that.”

“City officials have said they will file injunctions [against SBC] if they don’t abide by the franchising rules,” Dietz says. “At federal level, the Congress could draft new language specifying that phone companies must enter franchise agreements."

Balmoris says some cities welcome the phone companies entrance in the local TV market because of the downward pressure they may place on rising cable TV prices. The NCTA’s Dietz, on the other hand, points out that many cities are more interested in collecting the franchising fees the phone companies might bring to city coffers.

“If SBC continues with their plan to roll out cable television service without entering into the franchising agreement, the law is very clear under Title 6 of the 1996 Telecommunications Act,” says Marilyn Morhrman-Gillis, director of federal relations at the National League of Cities.

Morhrman-Gillis says the situation could play out in a number of ways, depending on SBC’s rollout. “How cities choose to respond would depend on what they announced and in what locations and when,” she says. “But I wouldn’t be at all surprised if cities filed injunctions against SBC.”

One of SBC’s competitors, Verizon, has chosen to form traditional cable franchising agreements with cities and has already entered agreements with Beaumont, Calif. and the Dallas suburb of Sachse.

— Mark Sullivan, Reporter, Light Reading

(14)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
OldPOTS
50%
50%
OldPOTS,
User Rank: Light Beer
12/5/2012 | 3:31:08 AM
re: SBC Sees IPTV Interference
I found this interesting as I have been following the whole franchising activity, including Sachse, with my city council (in the Dallas Area). Things are heating up leagally;

Not mentioned was that Comcast cable is now claiming that the satellite business has 15% of the TV business in the Dallas area and therefore is operating in a competitive area according to the Cable Act. As a result it is asking to be free of Cable Act and the franchise restrictions of all cities in the Dallas area!

Who has to Franchise???
jim_smith
50%
50%
jim_smith,
User Rank: Light Beer
12/5/2012 | 3:31:07 AM
re: SBC Sees IPTV Interference
I think this legal battle is different from the VoIP one. Here's why:

The RBOCs collected the "toll". So the VoIP folks simply had to fight it out with essentially one entity (RBOCs) in front of the FCC.

In this case, the "toll" is collected by each municipality. As such, SBC may have to fight it out with every municipality in the local courts and fight it out with the cable cos. in front of the FCC. That sounds like a much, much bigger legal battle.

Makes sense?
materialgirl
50%
50%
materialgirl,
User Rank: Light Beer
12/5/2012 | 3:31:06 AM
re: SBC Sees IPTV Interference
Perhaps this is all an arguement for municipal fiber. Let them lay it and charge for transit. It has to be new and different anyway. Now is their chance. Then, the archaic arguements over who has what transit goes away. Munis just get their cut of the action from any bits crossing their tollway.
nowhereman
50%
50%
nowhereman,
User Rank: Light Beer
12/5/2012 | 3:31:05 AM
re: SBC Sees IPTV Interference
http://www.usatoday.com/money/...
rjmcmahon
50%
50%
rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:31:05 AM
re: SBC Sees IPTV Interference
Perhaps this is all an arguement for municipal fiber. Let them lay it and charge for transit. It has to be new and different anyway. Now is their chance. Then, the archaic arguements over who has what transit goes away. Munis just get their cut of the action from any bits crossing their tollway.

It does seem like the only way the last mile will ever get properly upgraded will require municipal action.

The question I have is what conditions must be in place before the municipalities will act? You say, "Now is their chance." But yet in the US only a rare few have acted and, of those few, many remain in a trial status. What are the pieces to this puzzle that remain missing?

(Note: many believe the muni's should stop at leasing ROW access to private industry. Why hasn't that model proven itself?)
flyingsausage
50%
50%
flyingsausage,
User Rank: Light Beer
12/5/2012 | 3:31:04 AM
re: SBC Sees IPTV Interference
I think it's not so different from the VoIP story if you look from a market & competition point of view.

Voice providers like SBC are subject to some regulations/restrinctions on voice services (things like serving everyone, ...).

Cable operator jumped into the voice market with VoIP (VoIP is different from traditional PSTN Voice switching from technical perspective, but from a market and end-user perspective it's the same, just a phone line), and started an aggressive priving strategy to gain marketshare.
But, they are not subject to the same regulations/restrictions as traditional voice providers.
It's a kind of "unfair" competition.

Looking at TV, Voice providers (like SBC) are now entering the cable companies homemarket with IPTV, so to be fair they should not be subject to the same regulations.

I mean, either voice & TV regulations applies to everyone, either to no-one. Otherwise cable companies get an unfair competitive advantage.

On top of that, while VoIP & PSTN Voice are very similar from a end-user experience, IPTV is very different from traditional Broadcast TV. It offers interactivity thanks to the 2 way communication nature of an IP network, in term of services it's things like : programs "a la carte", video on demand, network VCR, news/show replay, interactive EPG (can memorize genre, channels, ...), a customizable interface for each family member, online gaming on TV, email/web on TV, and much more. And still the good old broadcast TV.

Looking at all that, it's definitly a big move ahead from traditional TV, and a "premium" kind of service. Should such a premium service be subject to the same restrictions/regulations as the basic BTV service ?
Voice providers are making huge investments (look at the SBC numbers) to deploy this new technology, far ahead from traditional cable & satellite offers.
So, if some companies are making such huge investments (means it creates jobs somewhere), they should get in exchange fair competitive conditions.
jim_smith
50%
50%
jim_smith,
User Rank: Light Beer
12/5/2012 | 3:31:03 AM
re: SBC Sees IPTV Interference
What are the pieces to this puzzle that remain missing?

I'll take a guess: the missing piece is the "drive". Something that can drive the humans who are in charge to get stuff done. It's got to be something basic. Like Sex. Or Money. Or Power. Or Fear. Or a combination of one or more of the above.

Please surrender your lofty egalitarian ideals to the immigration official.

Welcome to America.
dwdm2
50%
50%
dwdm2,
User Rank: Light Beer
12/5/2012 | 3:31:02 AM
re: SBC Sees IPTV Interference
"Please surrender your lofty egalitarian ideals to the immigration official."

I thought I already did it years ago... but they may think I didn't ;-). Just because one wishes to see an equitable and a better way of information transmission, one that is not bullied by the status quo (RBOCs et al.), doesn't mean one is dogmatic (I know you didn't say that). It is the essence of American way to try better approach in an equitable way. When that spirit is hurt by a narrow interest like the story in the USA TODAY, that only shows what's puzzling is that the status quo will try to stop competition by whatever means they can.
wuvicija
50%
50%
wuvicija,
User Rank: Light Beer
12/5/2012 | 3:31:00 AM
re: SBC Sees IPTV Interference
The real issue is that the regulations that govern both cableco's and telco's are a totally antiquated hodge-podge of local, state and federal rulings and bodies.

With convergence (yes, the most over-used word in this industry) the entire regime is inadequate. The regulatory bodies see only declines in power (and revenue), while the service providers find themselves trying to compete head-to-head while each of them are playing under different rules.

I'm not a big fan of either the RBOC's or the cableco's but at the end of the day they should be playing under the same rules. Maybe the new Congress will get around to trying to revamp the Telecom Act and bring it into this century.
rjmcmahon
50%
50%
rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:30:59 AM
re: SBC Sees IPTV Interference
The real issue is that the regulations that govern both cableco's and telco's are a totally antiquated hodge-podge of local, state and federal rulings and bodies.

I believe fiber overbuilders could bypass many (most?) of these regulations. The question then becomes why aren't fiber overbuilds happening at a much greater rate? The fact that they aren't suggests antiquated regulations are only part of the problem.
Page 1 / 2   >   >>
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Charting the CSP’s Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it’s going from two industry veterans.
LRTV Custom TV
Cisco's Innovations in Cable

5|26|16   |   03:18   |   (0) comments


Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
DT: Telcos Must Escape Vendor Prison
Iain Morris, News Editor, 5/24/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
AT&T's Margaret Chiosi Retires
Ray Le Maistre, Editor-in-chief, 5/25/2016
Verizon Backpedals on Go90
Mari Silbey, Senior Editor, Cable/Video, 5/24/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.