VideoTele.com Inc. has upgraded its products to offer carriers more video-over-DSL connections for less bandwidth (see VideoTele Lowers DV Bit Rates).

Like an earlier, similar announcement from SkyStream Networks Inc. (see SkyStream Wants Its IP TV ), VideoTele.com says it can compress video signals so that the limited bandwidth available on copper phone lines is used more efficiently, enabling more channels to be delivered using less bandwidth.

The news raises questions about the status of digital television, which has entered industry lingo without correspondingly penetrating American living rooms. What's the holdup? If TV can be sent over phone lines using this kind of technology, why isn't it offered more widely?

The answer seems to point to the limited bandwidth of DSL and the ongoing telecom downturn. "DSL has bandwidth limitations when it comes to video," says analyst Adi Kishore of Yankee Group. That makes it chiefly of interest to tiny telcos and alternative carriers, particularly outside the U.S., he says.

These service providers don't mind adding something new to their copper connections to enable them to offer a mix of services in relatively small areas. In contrast, RBOCs are focused on big wins. They're not likely to think of investing in their copper networks in an area where an eventual technology overhaul might bring bigger rewards.

That overhaul could be years away, though, considering the current capex doldrums. Meanwhile, companies such as Videotele.com and SkyStream seem content to ride the waves of smaller business, releasing products that work over DSL but can also accommodate fiber and even Ethernet when the time comes.

VideoTele.com, for example, has its gear in use at Chibardun Telephone Cooperative in Wisconsin and in Norway's Telenor ASA (Nasdaq: TELN). It claims its Astria gear is ready to run over fiber and other facilities, not just copper.

SkyStream claims to have customers for video-over-DSL as well, although it can't release their names. "We think timing is the issue for RBOCs," says Bethany Mayer, VP of product marketing at SkyStream. "We're happy to run over copper, fiber, Gigabit Ethernet, ATM, or IP."

Videotele.com and SkyStream are joined by a roster of other vendors, including Harmonic Inc. (which Canadian LECs Sasktel and Alliant Telecom as video-over-DSL customers), Minerva Networks Inc., and Optibase Ltd. (Nasdaq: OBAS), who also see a future in IP TV, albeit one that's still bobbing on the horizon.

— Mary Jander, Senior Editor, Light Reading
www.lightreading.com