Telecom NZ Scraps Caps for Web TV

Telecom New Zealand Ltd. (NYSE: NZT; New Zealand: TEL) is to exempt Web-sourced (over-the-top) video piped into a new hybrid TiVo Inc. (Nasdaq: TIVO) "Media Device" from its strict monthly data consumption cap, the carrier has stated.

The national operator is deploying the new devices from November and is keen to make sure broadband customers won't think they could be penalized by using the TiVo box.

TNZ, which has more than 815,000 broadband customers, applies monthly caps and a metered business model to its various service-level tiers. On the high end, its "Pro" tier caps monthly usage at 40 Gigabytes, and charges customers 20.40 New Zealand dollars (US$14.48) for each additional gigabyte consumed.

But to fuel interest in its DSL service and the new TiVo DVR, which combines a high-speed broadband connection with access to the digital, over-the-air "Freeview|HD" service, any videos and movies streamed over, or downloaded to, the TiVo device won't be metered.

TNZ expects to sell the TiVo Media Device and a wireless adapter for NZ$920 (US$653.16) at retail stores and through its online store.

"This will be their exclusive box," says Joshua Danovitz, TiVo's VP and GM of international business.

Save for some software differences to account for different broadcast standards, the TiVo box Telecom New Zealand is gearing up to debut is similar to the model Australia's Seven Network Ltd. is offering today. Both service providers are getting access to the DVR pioneer's technology and services through Hybrid Television Services, which holds the exclusive TiVo license rights in both countries, and is owned by Seven Media Group and TVNZ.

Although TNZ subscribers will be able to download video to their hearts' content via the TiVo box, the telco has yet to reveal a full suite of broadband video partners for the new TiVo device. More will be disclosed closer to the launch date, but TNZ reportedly expects to start with a menu of about 200 pay-per-view movies, with more content (including some free, ad-supported shows) to be added later. Seven Network, by comparison, already has a deal to stream in content from Blockbuster Australia.

TiVo has broadband video partnerships with the likes of Amazon.com Inc. (Nasdaq: AMZN) and Netflix Inc. (Nasdaq: NFLX), but those content rights don't transfer to the New Zealand and Australia markets.

TiVo's approach in New Zealand and Australia is similar to its U.S. service provider strategy.

RCN Corp. plans to offer TiVo as its primary DVR next year, and will use the box's broadband port to complement the MSO's own video-on-demand (VoD) service. And Evolution Broadband LLC , which targets small and mid-sized MSOs, has similar aims through its TiVo partnership.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), meanwhile, expects to offer TiVo as a primary DVR option in at least one tru2way-enabled market, but hasn't said if that box will use a broadband connection or have access to TiVo's stable of over-the-top video partners. (See RCN Picks TiVo as 'Primary' DVR and TiVo Covers Its Cable Bases .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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