Carriers Claim IPTV Wiring Worries
The IPTV signal typically enters the household via an Ethernet connection to an ADSL modem, which connects to a set-top box, which plugs into the TV (see Scientific-Atlanta Wins $195M SBC Deal). But U.S. households typically have two or three televisions and the various costs of running new CAT-5 cable to those additional sets are substantial.
“It’s what I call the dirty little secret of IPTV,” says Entone Technologies Inc. CEO Steve McCay. “The huge issue today is that it’s one thing to get the signal to one TV, but what if you have four or five TVs in the home?” (See BNS Expands With Entone IPTV .)
To get the IPTV signal from the main TV to sets in the bedrooms costs about $800, according to some accounts of carriers delivering IPTV today. Here’s how it breaks down: two additional set-top boxes at $150 each, new CAT-5 cabling at $50, approximately eight hours of skilled installation at $50 per hour, and a “windshield cost” (gas and depreciation on the service vehicle) of $50.
“We do truck rolls where I was hoping they would do the installation in 2 hours and they are there for 6 hours,” says Bill DeMuth, CTO of SureWest Communications (Nasdaq: SURW), which has offered IPTV service since 2002 (see IPTV Scramble Is On). “This is our biggest problem.”
So who pays for such a big headache? Coaxsys Inc. director of marketing Ted Archer says that IPTV operators all have different ways of dealing with the costs.
Some will offer limited or no inside wiring to go along with an IPTV installation, Archer says. But he maintains that carriers really aren't in a position to demand a big upfront fee from their customers.
“From the customer’s prospective, if you look at them and say 'I’m going to charge you $350 in installation charges,' they’ll just stay with their cable service,” Archer says.
Satellite providers offer prospective customers two rooms of free installation to move from cable to satellite. Add that to the free months of service often included in the deal, and you arrive at an average customer acquisition cost of around $700, cable industry researchers say.
Adding to the telecom carrier stakes is the fact that once a carrier wires a new subscriber's home, it loses that investment if the subscriber cancels their service, because the wiring can't be taken back.
While carriers are figuring out this quagmire, several equipment vendors are stepping in with suggested solutions. Coaxsys, Entone, and a few other companies market devices that allow the IPTV signal to travel over existing coaxial cable to the other TVs in the home.
San Mateo, Calif.-based Entone makes a gateway device, called Hydra, which terminates a single Ethernet connection and sends the IPTV signal over coax to each TV in the house, eliminating the need for separate set-top boxes, McCay says.
Coaxsys uses a slightly different approach (see Consolidated Uses Coaxsys for IPTV). Its device, called TVNet, creates an in-home IP network that utilizes coax to link to each set-top box in the house, and can support other IP devices such as digital video recorders (DVRs) and gaming devices in other parts of the home.
The set-top box makers are also getting into the act. Amino Technologies plc and ReadyLinks Inc. have teamed up to develop a HPNA adapter called the ReadyLinks SmartFoot that links Amino set-top boxes to the others in the home using coax or telephone wiring.
The solution to the home wiring problem could eventually be a wireless one. Wireless chipmaker Airgo Networks Inc. has developed a high-bandwidth chip utilizing the 802.11n standard, which, when baked into set-top boxes, will allow wireless communication among all IP-speaking devices in the household, says Airgo spokesman Joe Volat.
In the U.S., the only IPTV installations being deployed so far are by small, regional telephone companies. But larger carriers, such as SBC, are aware of the problem and will have to figure out a way around it soon enough (see SBC Touts IPTV Servicesand SBC: IPTV's Day Has Come).
The only thing that's clear at this point is that no standard way of handling home wiring exists. “Some telcos are saying ‘we’ll give you one TV,’ or they’re saying ‘we’ll give you two TVs but we’re not going to put the wiring inside your house,’ while others are saying ‘we’re just going to take the time and wire all the rooms and just get it done,’” Coaxsys's Archer says.
— Mark Sullivan, Reporter, Light Reading