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Microsoft at Home

3:40 PM -- Speaking as a guy playing with Monopoly money, I like the thought of Microsoft Corp. (Nasdaq: MSFT) getting into the home-gateway piece of IPTV.

Microsoft is not doing that, you understand. In fact, I get the impression that not running the home network was an early cornerstone of the IPTV/Mediaroom strategy. It's a job left to partners -- 2Wire Inc. , in the case of the AT&T Inc. (NYSE: T) U-verse deployment.

Ignoring expense and difficulty level, though, wouldn't it make sense?

It's just an opinion, not an official declaration, but Joe Seidel, director of the global partner ecosystem for Microsoft's Mediaroom, sees merit there, too. When things go wrong with a service like U-verse -- which nets you a home network for free, he points out -- someone like 2Wire won't get the blame. "If the home network starts dropping frames or dropping bits, it's not our fault, but I've got to believe people are going to call their provider up and say, 'It's the software,'" he says.

In other words, a lot of subscribers will assume Microsoft is running their home network anyway. As more carriers look into providing managed home networks, it might make sense for the company to take control of more of the home.

I'm not saying consumers would like the idea. [Insert your blue-screen-of-death jokes here.] But from a kibitzer's view, it's a tempting strategy.

As far as what Microsoft is doing, the company is holding a developer conference in Toronto this fall to see what Mediaroom applications are getting built. "We'll see a lot of movement in that, probably in the next year," Seidel says. Hoped-for areas of development include social networking functions that could really start to blur the distinction between Mediaroom-driven TV and something like Sezmi.

— Craig Matsumoto, West Coast Editor, Light Reading

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