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Neuf: Time Is Right for IPTV

Light Reading
News Analysis
Light Reading
1/31/2005

PARIS –- Having waited for more than two years for the market conditions to be right, French competitive operator Neuf Telecom is beefing up its network as it moves more aggressively into the TV-over-DSL market (see Neuf Expands IPTV With Cisco).

France is Europe's most advanced IPTV market, with three service providers -- Neuf, France Telecom SA (NYSE: FTE), and triple-play firebrand Iliad (Euronext: ILD), with its Free business -- competing for customers (see Competition Trumps Demand in Euro IPTV, French Say Oui to DSL TV, and Iliad Ramps Up Broadband to the Homer).

Now Neuf is stepping things up a gear, following a frantic year of access network expansion. The operator, formerly known as LDCom, operates a nearly national fiber network and offers wholesale and retail services in France. It has been the most aggressive unbundler of the French local loop, having installed its own access equipment in more than 700 local exchanges, covering the majority of the French population.

Talking to Light Reading at last week's TVoverDSL 2005 event in Paris, François Paulus, director of the operator's networks division, says Neuf trialed TV-over-DSL in September 2002, but "we wanted to own the customer, so we waited for unbundling," which took off in France in 2004.

In just one year Neuf has unbundled 700,000 lines for its own retail business and for its wholesale ADSL customers such as Tele2 AB (Nasdaq: TLTO), Tiscali, and T-Online International AG under T-Online's brand, Club Internet.

It began its TV service last year by reselling Canal Plus's satellite service of about 80 channels, but the broadcaster owned the set-top box and billed the customers.

Neuf recently launched its own 70-channel TV service, Neuf Telecom, which it is now marketing to its 400,000 DSL subscribers. "We've been negotiating content rights with the owners ourselves," says Paulus. It's important to have something original to offer the subscribers, he notes. "Competition is so intense in the Internet access market, and you would need millions of customers to make money from high-speed access services alone, because it's already so cheap."

So now Neuf has its own triple-play bundle: 8-Mbit/s Internet access for €15 (US$19.55) per month; flat-rate national VOIP, using softswitch technology from Nortel Networks Ltd. (NYSE/Toronto: NT), for €9 ($11.73) per month; and the Neuf TV service for €6 ($7.82) each month.

Paulus says Neuf decided some time back to go all IP, but is having to rely on some legacy technology in the short term. "We have based our approach on IP DSLAMs from Huawei, but it's good to have more than one supplier, so we also have Alcatel ATM DSLAMs and have got them to add Gigabit Ethernet interfaces to their equipment while we test their IP DSLAMs."

The operator's other main technology partner is Cisco Systems Inc. (Nasdaq: CSCO), which has supplied a range of IP switches as the operator has beefed up its network.

"We were already using Gigabit Ethernet Cisco equipment for our corporate services, and put out a tender when we expanded the network. It was a close thing between Cisco and Foundry." Now Neuf has upgraded its long-distance network to 10 Gbit/s to cope with the demands of transporting video traffic.

Its next move, in the fiercely contested Paris market, is to supply its customers with new set-top boxes from Netgem that not only deliver the TV-over-DSL channels, but also accept over-the-air terrestrial channels. This is a smart move, as some of France's most popular channels, such as TF1, have so far refused to provide their content to the IPTV brigade.

But Paulus says there are no definite plans to move into video on demand (VOD). "That's a tough market. We're looking at how others, such as FastWeb [in Italy] are doing it," but it involves a lot of upfront cost, he says.

"We're not a conservative company, but we're not going to throw our money out of the window."

— Ray Le Maistre, International News Editor, Light Reading

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blackstar
blackstar
12/5/2012 | 3:28:03 AM
re: Neuf: Time Is Right for IPTV
Anyone know how their network is set up? I thought most French ISPs were using L2TP, which isn't very friendly to multicast. Are these unicast video streams? Do they just count on having to dedicate bandwidth for a unicast stream per active viewer/subscriber?
I don't know how they did it, but the price is certainly right at 6 euro per month... incredible.
swxu
swxu
12/5/2012 | 3:27:54 AM
re: Neuf: Time Is Right for IPTV
Neuf is not only an ISP. It owns the network including the DSLAM that multicast is performed in the DSLAM, Huawei's MA5300 and Alcatel's IPDSALM (7302?).

It seems that the TV services to be provided have a few choices of packages only, due to the limitations on the DSLAM and the middleware used by the STB.
nole
nole
12/5/2012 | 3:27:48 AM
re: Neuf: Time Is Right for IPTV
What does it mean to enable multicast in the access? Does the core of the network support multicast?
paolo.franzoi
paolo.franzoi
12/5/2012 | 3:27:47 AM
re: Neuf: Time Is Right for IPTV

I think your core question is not meaningful for these types of deployment Carriers are building private internets to carrier video. This allows these carriers to control the QoS.

In the access, there is the need for the DSLAM or equivalent to support IGMP multicasting and the mapping of these streams to customers over primarily ATM based DSL lines.

seven

rjmcmahon
rjmcmahon
12/5/2012 | 3:27:46 AM
re: Neuf: Time Is Right for IPTV
What does it mean to enable multicast in the access? Does the core of the network support multicast?

For ip multicast to work properly it needs to be enabled between the source and the receivers. So I think the answer to your question depends upon what you defines as the "core" of the network.

Today, the incumbents' control over the access networks allows them to define what is the "core network" and, more importantly, whose multicast servers/sources get attached to that network.

I believe fixing this policy mistake is a major reason progressive societies will build open access, municipal, networks. Let video be like the web where anybody can publish/multicast. The effects of the Gutenberg press is probably the best analogy for what could happen to today's cable-fed society ;-)

http://www.ideafinder.com/hist...

The invention of the printing press, in turn, set off a social revolution that is still in progress. The German printing pioneer Johannes Gutenberg solved the problem of molding movable type. Once developed, printing spread rapidly and began to replace hand-printed texts for a wider audience.

Thus, intellectual life soon was no longer the exclusive domain of church and court, and literacy became a necessity of urban existence. The printing press stoked intellectual fires at the end of the Middle Ages, helping usher in an era of enlightenment. This great cultural rebirth was inspired by widespread access to and appreciation for classical art and literature, and these translated into a renewed passion for artistic expression. Without the development of the printing press, the Renaissance may never have happened. Without inexpensive printing to make books available to a large portion of society, the son of John Shakespeare, a minor government official in rural England in the mid-1500s, may never have been inspired to write what are now recognized as some of history's greatest plays. What civilization gained from Gutenberg's invention is incalculable.
alchemy
alchemy
12/5/2012 | 3:27:45 AM
re: Neuf: Time Is Right for IPTV
rjmcmahon gives us:
The invention of the printing press, in turn, set off a social revolution that is still in progress. The German printing pioneer Johannes Gutenberg solved the problem of molding movable type. Once developed, printing spread rapidly and began to replace hand-printed texts for a wider audience.

In the rjmcmahon universe, the first printer would have been compelled by the government to give away all their books for free. With no profit motive, no other books would ever be printed.
paolo.franzoi
paolo.franzoi
12/5/2012 | 3:27:43 AM
re: Neuf: Time Is Right for IPTV

Its interesting that you miss the point that the IXCs run the Internet Backbone in the US. Of course other firms run the backbone in other places. These backbone Internet providers receive no extra money for carrying premium traffic over the public Internet. Since there is no extra money, there is no extra attention paid to QoS of any traffic. That is why private internets will be used to carry the traffic.

seven
keelhaul42
keelhaul42
12/5/2012 | 3:27:43 AM
re: Neuf: Time Is Right for IPTV
RJ:
Let me start by giving you credit for (a) recognizing the current state of affairs is dysfunctional and (b) a willingness to propose a solution.
I do like to read your ideas even if I disagree.

What we all really want is abundant - and cheap - bandwidth to the {home, business, wherever}.
Let me ask you straightforwardly:
In the model you propose why do you think the owner(s) of the local access facilities would not resort to many (most!) of the disagreeable behaviors we see from the current monopoloy owners of the local loop?
Besides that, whenever someone says something like "natural monopoly" I start to cringe. What's really being said is (sic) we can't think of a way to do this otherwise so we're going to give someone a monopoly, regulate hime closely, and hope he doesn't behave like the fat, lazy monopolist that he is. Good luck on that one!
Is that not precisely how we got into the mess we're in?

Your thoughts appreciated. I mean the foregoing as earnest, honest observations.

-kh
rjmcmahon
rjmcmahon
12/5/2012 | 3:27:43 AM
re: Neuf: Time Is Right for IPTV
In the rjmcmahon universe, the first printer would have been compelled by the government to give away all their books for free. With no profit motive, no other books would ever be printed.

You are misrepresenting my position. In the model I propose the retail price of access would trend towards the marginal cost to transport the bits. Customers would pay direct to content producers for a near infinite supply of "channels". The natural monopolies would be recognized for what they are and be regulated with mecahnisms that minimized their market abuse. Doing this would enable independent content production and advance our society.

The situation we have today is natural monopolies feigning competition combined with complete regulatory capture. It's worse, government doesn't just sit by while taking its handouts in things like "franchise fees", but rather assists in the market abuse by passing legislation in states like PA preventing municipalities from laying their own fiber infrastructures.

We can do better. Future generations deserve better. It starts by recognizing the truths of where we are and the realities of where we could be.
rjmcmahon
rjmcmahon
12/5/2012 | 3:27:42 AM
re: Neuf: Time Is Right for IPTV
In the model you propose why do you think the owner(s) of the local access facilities would not resort to many (most!) of the disagreeable behaviors we see from the current monopoloy owners of the local loop?

The interests of the owners and the users must be aligned. That way if owners started behaving poorly they would be hurting themselves.
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