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Why IP When You Need TV?

A thought for carriers leading up to NXTcomm 2008: IPTV is a big deal as a weapon against cable, but it's not a silver bullet and probably not practical when you've got loads of bandwidth to spare.

For AT&T Inc. (NYSE: T), IPTV was not only a cutting edge technology, it is a necessity. With its fiber-to-the-node (FTTN) network providing about 25 Mbit/s of bandwidth to individual homes, the carrier is making the most of its network.

"We absolutely intend to be the HD leader," said Michael Antieri, AT&T's senior VP of consumer marketing said Wednesday at the Oppenheimer & Co. Inc. technology conference. "But our bandwidth will not be a limiting factor to that since we don’t send all the channels to the home at once. So for us, channel count is not relevant."

For contrast, look to Verizon Communications Inc. (NYSE: VZ)'s fiber-to-the-home (FTTH) network and FiOS service, which started before AT&T's IPTV service was ready, and uses a cable-like distribution system that requires more bandwidth. The carrier has said it has IPTV on its radar, but Vincent O'Byrne, director of access technologies for Verizon, says it has more than enough bandwidth to meet the demands of customers using the broadcast model now. If that remains true in the future, Verizon won't make the switch. (See Verizon in No Rush for IPTV.)

Like Verizon, cable companies have shown that IPTV's promise of adding interactive features to television aren't exclusive to pure IP access networks. (See Verizon Previews FiOS Future and AT&T Shows Off IPTV Tricks.)

"Certainly on the face of it today, bandwidth is the most driving factor," says Heavy Reading senior analyst Adi Kishore. "But having unified voice, video, and high-speed Internet services on a converged network would facilitate some kind of efficiencies and advantages."

So although Verizon has the advantage in bandwidth, AT&T can claim an efficiency advantage. AT&T's method could prove more interesting if channel choice and video-on-demand selections are the two things customers crave more. But Verizon's model offers a speed advantage, and that could prove more interesting if over-the-top video starts eroding the need for more linear channels.

"I think that's more behind Verizon's decision than anything else," says Kishore. "They think it's going to be a lot easier for them to differentiate themselves on faster speeds than with a better TV package."

— Raymond McConville, Reporter, Light Reading

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