1:50 PM -- The University of Texas (UT), which arguably has the most profitable college sports program, is looking to launch its own cable network. As reported by BusinessWeek, UT is talking with content distribution partners including Time Warner Cable Inc. (NYSE: TWC), Comcast Corp. (Nasdaq: CMCSA, CMCSK), and AT&T Inc. (NYSE: T) for carriage of the network in Texas and bordering states.

If it gains carriage, it will join a host of other channels focused on college sports, including the recently launched Big Ten Network and ESPNU. Sports programming is a double- edged sword for telco TV providers. While it has great appeal for subscribers, it also tends to be the most expensive programming, and often leads to thorny negotiation cycles. IF UT is successful with this, will it open the floodgates for individual college channels?

While some may argue that a new UT channel is illustrative of sports programming gone out of control, it also demonstrates the promise of telco TV and, more precisely IPTV. One of IPTV’s early promises was its ability to deliver virtually “unlimited” channel availability. That ability could conceivably allow IPTV providers to deliver a wider array than their competitors of specialty and niche programming offerings. I often heard it referred to as delivering a “me TV” experience, where customers could build their own content lineups, based on their preferences.

But today’s reality often gets in the way of that promise. All of those niche channels, UT being an example, want to get paid, and paid handsomely. That means demands for the broadest carriage, not for some “niche” programming tier, which leads to higher programming costs and ultimately higher costs for consumers. Perhaps too high for the promise to be realized.

— Bernardin Arnason, Managing Partner, Pivot Group , and Chairman, TelcoTV 2008

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