Cable's Wideband response against IPTV

Cable operators are concerned about telco fiber and IPTV deployments, but they also understand that these formidable competitors can’t move faster than their backhoes. So while the telcos dig and deploy new networks, MSOs are readying competitive responses.

At the top of the list is “wideband” technology that will boost DOCSIS cable modem speeds to more than 100 Mbit/s, fast enough to compete with any near-term telco fiber offering.

Today’s DOCSIS 1.0, 1.1, and 2.0 cable modem networks are only able to support data transmissions within a single downstream 6 MHz radio frequency (RF) channel, limiting maximum throughput to 38 Mbit/s per modem. To hike data rates, CableLabs is cooking up a new standard – DOCSIS 3.0 – that will enable a cable modem to simultaneously tune into multiple 6 MHz channels through packet bonding techniques. The approach creates a wideband channel that can support well over 100 Mbit/s downstream, although the bandwidth is shared among many cable modem users.

While wideband is a powerful weapon in cable’s arsenal, there’s a catch. The DOCSIS 3.0 specification isn't done. In fact, it's not even close. And once it is finished, there will be a long wait for cable modem termination systems (CMTSs) that qualify for DOCSIS 3.0 specification compliance. It is anticipated that it may take two to two-and-a-half years to get a qualified CMTS in the markets

That’s not good news for cable operators with AT&T or Verizon breathing down their necks in the early telco TV markets. The same is true for MSOs in Europe and Asia that are already hip-deep in high-stakes bandwidth battles. To speed up wideband availability, CableLabs recently floated the idea of an interim DOCSIS 2.0b initiative, but that has been nixed due to concerns that it would further delay DOCSIS 3.0 availability.

Hedging their bets, MSOs have been pressing the top DOCSIS CMTS and customer premises equipment (CPE) suppliers – Cisco Systems, Motorola and ARRIS – to produce pre-standard wideband gear for near-term deployment. Each of these three players now has pre-DOCSIS 3.0 wideband modems and CMTS solutions in field trials and plans general availability within 2006.

ARRIS and Motorola are following similar paths by enabling wideband capabilities through software upgrades to their existing CMTS cards and chassis. The benefit of this approach is that it allows cable operators to roll out wideband using existing CMTS hardware. Plus, the approach enables MSOs to create wideband links logically across existing channels already in use for DOCSIS 1.0, 1.1 and 2.0 services. This way, they can avoid allocating precious new spectrum for wideband services. Cisco, on the other hand, is implementing wideband using a modular CMTS (M-CMTS) configuration. ARRIS and Motorola say they have M-CMTS solutions on their roadmaps as well. They're also developing DOCSIS CMTS cards with decoupled upstream and downstream ports that will alleviate potential wideband efficiencies via traditional CMTS designs.

Motorola’s first announced wideband customer is StarHub. The Singapore MSO is now launching a wideband trial and plans to begin offering a 100-Mbit/s Internet service commercially by the end of 2006. Near-term availability of wideband gear is good news for cable operators, even if that only includes pre-DOCSIS 3.0 products. The trade-off is that in pre-standard configurations, cable operators must buy the modems and CMTS products from the same supplier to ensure compatibility. Initial wideband modems will also cost four to five times as much as today’s DOCSIS 2.0 models.

As a result, tech vendors expect that sales of pre-standard products will be modest at best. Until DOCSIS 3.0 is ready for prime time, MSOs are likely to deploy wideband only in residential markets facing intense competitive pressure, as well as for targeted business services.

AT&T : Uverse IPTV

U-verse's Vitual Tour

Price Comparison amonst different offerringd

AT&T has at last launched its internet-based TV service i.e. U-verse video and high-speed Internet service to about 5,000 homes in San Antonio, Texas. Texas was also chosen by Verizon for its baby steps into IPTV, called Fios TV. A comprehensive roll out won't now take place until next year. The launch follows a field trial in San Antonio, AT&T's headquarters, beginning last December. AT&T is planning to roll out service in Houston this summer as well. AT&T will be launchin U-verse in 15 to 20 markets this year where it had built out its Project Lightspeed fiber-to-the-node network. Project Lightspeed is the SBC initiative to expand its fiber-optics network deeper into neighborhoods. That delivers AT&T's U-verse TV, voice and high-speed Internet access services.

Price: Current price declared by AT&T for its U-verse service might not have the cable competition panicking about their margins just yet. The entry-level U-verse package starts at $69, and the premium service costs $114 a month. That's comparable to cable, but U-verse does, however, include internet options up to 6Mbits/s. AT&T also is offering family-oriented bundles starting at $54 a month, as well as a premium Spanish-language package for an extra $10 per month after a promotional three-month discount. The introductory installation fee is $20, down from $95. The company is offering qualified customers three months of free "live TV"

Features: The services come with three TV receivers per home, including one with a digital video recorder, and a wireless Internet router. DVRs allow viewers to pause, rewind, replay and record live TV. TVs become IP-enabled via the IPTV receivers and can be used to display digital photos and other content. AT&T's STBs will run Microsoft IP-TV software and allow users a variety of interactive functions like video recording and video on demand. U-verse includes 200 channels of IPTV, Spanish-language programming, video-on-demand, and an interactive program guide. Features exclusive to IPTV include faster channel-changes, a mosaic approach to picture-in-picture displays, and content searches via keywords such as actor names. The service is launching with DVR capabilities on one receiver but will add whole-home DVR capabilities and High Definition TV later. The U-verse service includes IPTV and high-speed Internet access. AT&T is offering access at 1.5 Megabits per second; 3Mb/s and 6 Mb/s.

Fibre Strategy:
SBC's Project Lightspeed is using VDSL-2, to reach the overwhelming majority of their homes. They deliver fiber to the node, but twisted pair copper to the home. SBC uses Alcatel gear for the fiber backbone. It consists of IP routers, the 7750, the Ethernet switches, the 7450, the remote DSLAM, the 7330. Microsoft's IPTV solution is used for the settop box. AT&T has been building a $4 billion fiber-optic network to offer television, Internet and telephone service over phone wires. The fiber-to-the-node initiative will catapault SBC into a 13-state market for voice, video and data services and is the world's largest IP-TV rollout. Alcatel is primary supplier for Project Lightspeed infrastructure in a $1.7 billion deal. Within three years, about 18 million SBC households will have access to this network.

SBC is Using the release 1.1 of Microsoft’s IPTV middleware for IPTV launch offers four standard-definition streams. It also will support three standard-definition and one high-definition video stream, and will offer more than 200 channels. It further will include double the number of VoD options available during the controlled launch and provide the same high-speed Internet access. IMS-based VoIP will become part of the service starting in December. SBC has picked IP-TV settops from Scientific-Atlanta and Motorola for the telco's planned IP-TV system. Financial terms of the two contracts were not disclosed. The contracts give equal market opportunity to both vendors and continue through the end of 2008. AT&T's Homezone subscribers will use their integrated set-top box with AT&T Yahoo broadband to access video programs and movies, as well as tap into television programming through the AT&T-DISH Network satellite service. AT&T aims to use Akimbo as another tool to expand its IPTV offerings, which include phone, data and voice services designed to compete with those offered by cable companies. company is also on the cusp of announcing an intelligent NID (iNID) for the deployment. That device would sit outside the home to terminate video and data traffic, and a residential gateway with 802.11n would sit inside the house. AT&T is using MoCA technology for in-home networking today, but HPNAv3 over twisted pair and 802.11n are where it’s planning to go on the long term, as HPNAv3 works well both for single-family homes as well as for multidwelling units, in which a cable company may own the in-building coax. HPNAv3 is integrated into the set-top boxes AT&T is using. IPTV i.e. U-verse has gone pretty smoothly for AT&T as it moves through its controlled tests and on to its commercial launch, one of the challenges was integrating the Microsoft software and other parts of the Lightspeed solution with two different iterations of set-top boxes. For the controlled launch, AT&T was using Tatung set-top boxes, but the commercial services will use Motorola Inc. and Scientific-Atlanta set-top boxes, which are based on STMicroelectronics and Sigma Design Inc. chips, respectively.

In addition to the Lightspeed effort, AT&T this month or next will commercially launch throughout its DSL footprint a new hybrid DBS/DSL service called HomeZone, which uses a 2Wire box to deliver services within the consumer’s home. HomeZone will have a similar user interface look and feel to what’s being used for Lightspeed with very comparable video quality. It will include the same channel options available today through EchoStar’s DISH, which is providing the DBS component of the service. And it will offer pay-per-view and VoD options, including a broad slate of selections AT&T will provide in collaboration with Akimbo. VoIP is not a feature of the HomeZone bundle.

Further posts will be augmented with AT&T's pricing and component strategy

Pay TV vs Broadband Penetration

Source: http://www.tdgresearch.com/product.asp?itemid=38&catid=33

Worldwide IPTV Deployments

Operator (Bold text indicates active deployments)	Region	Country
MaLigneTV - TPSL	EMEA	France
MalignedTV - Canal+ SatDSL	EMEA	France
Canal+ Satellite	EMEA	France
Free SA ("Freebox")	EMEA	France
Swisscom ("Bluewin StreamIt")	EMEA	Switzerland
Q-DSL	EMEA	Germany
T-Online T-Vision	EMEA	Germany
iSH	EMEA	Germany
FastWeb	EMEA	Italy
Telefonica	EMEA	Spain
Italtel Spain	EMEA	Spain
Auna	EMEA	Spain
Belgacom	EMEA	Belgium
Canal+ Digital	EMEA	Sweden
TeliaSonera	EMEA	Sweden
Viasat	EMEA	Sweden
Telenor	EMEA	Norway
Lyse Energy AG	EMEA	Norway
NVE	EMEA	Denmark
Magnet Networks	EMEA	Ireland
Kingston (owned by Eclipse)	EMEA	UK
Video Network	EMEA	UK
OnDigital	EMEA	UK
SKY	EMEA	UK
British Telecom	EMEA	UK
NovaMedia	EMEA	Iceland
Telenor	EMEA	Norway
SiOL	EMEA	Slovenia
StreamTV	EMEA	Russia
Lattelekom	EMEA	Latvia
Baltcom	EMEA	Latvia
Aliant Telecom	NAM	Canada
SaskTel	NAM	Canada
Manitoba Telecoms Services	NAM	Canada
BellCanada	NAM	Canada
Bell ExpressVu	NAM	Canada
Qwest	NAM	USA
Microsoft MSNTV2	NAM	USA
Akimbo	NAM	USA
Vcinema	NAM	USA
EchoSTar	NAM	USA
DirecTV	NAM	USA
Verizon	NAM	USA
SBC	NAM	USA
BellSouth	NAM	USA
Iowa Network Services	NAM	USA
Pioneer Tekephone	NAM	USA
UTOPIA (Utah Telecom)	NAM	USA
Ringgold Telephone Company	NAM	USA
Comporium Communications	NAM	USA
SureWest	NAM	USA
Comcast, Cox, TWC	NAM	USA
ChungWa Telecom	AsiaPac	Taiwan
Softbank ("BBTV")	AsiaPac	Japan
NTT OCNTheater	AsiaPac	Japan
PCCW ("NOWbroadbandTV")	AsiaPac	Hong-Kong
SuperSUN	AsiaPac	Hong-Kong
Transact	AsiaPac	Australia
Shanghai Media Group	AsiaPac	China
KTCorp	AsiaPac	Korea
Hanaro	AsiaPac	Korea
Atlas Interactive (New Dehli)	AsiaPac	India
Reliance Infocomm	AsiaPac	India
Media Corp Technologies	AsiaPac	Singapore

TRAI's proposed amendments in Cable Television Networks (Regulation) Act

The Telecom Regulatory Authority of India (Trai) has proposed amendments in the Cable Television Networks (Regulation) Act and telecom licence agreement to keep IPTV (Internet protocol television) outside the definition of cable services. Such a move would mean that cable operators would not be responsible for IPTV content, but access service providers would ensure compliance with the programming and advertising code.Trai has said that amendments are perceived as necessary by the industry, as set-top box must be used even for free-to-air channels in the case of IPTV. As per the Cable TV Act, free-to-air channels do not need an addressable system and, therefore, set-top boxes.

Also, lack of standardisation of equipment in IPTV has been cited as a problem area by the industry. While the Cable TV Act talks about use of equipment conforming to Indian standards, different protocols are used by companies in the case of IPTV, thereby violating the Act. The industry is also not clear on applicability of FDI norms, programme codes and downlinking guidelines to IPTV. Industry stakeholders argued during a consultation process on the issue that an amendment to the Cable TV Act is necessary because of the time gap between the introduction of cable TV and IPTV in the country.

When the Cable TV Act was prepared, IPTV service was not even conceived, they pointed out. So, the Act is primarily aimed at regulation of conventional Cable TV systems, and not IPTV, according to the Trai proposal. The specific concern is over the section 2 (b) of the Cable TV Act which states, “cable service means the transmission by cables of programmes including re-transmission by cables of any broadcast television signals”. The regulator has suggested that Section 2 (b) should be revised to “Cable service means the transmission by cables of programmes including re-transmission by cables of any broadcast TV signals, but does not include video services offered under Unified Access Service licence holders on their networks”.

Another definition, according to Trai, could be, “cable service means the transmission by cables of programmes including re-transmission by cables of any broadcast TV signals, but does not include video services offered by any licensee under the Indian Telegraph Act, 1885, or the Indian Wireless Telegraphy Act, 1933, under the said licence”.

Trai has also suggested an amendment to the Unified Access Service Licence (UASL) agreement. The existing clause 2.2 (a)(iii) of UASL states that “the access service providers can provide broadband services including triple play-voice, video and data”. Trai has proposed it must change to, “the access service providers can provide broadband services including triple play-voice, video and data. The video services include re-transmission of any broadcast TV signals. The access service providers shall ensure compliance with the programme code, advertisement code and other guidelines issued on broadcasting content by the government in respect of video services provided by them”. But before finalising its recommendation, the regulator has sought industry inputs by June 23 on the issue.

IPTV: Business Case Viability

Forrester Research warns that low revenue opportunities and the high investments needed for broadband triple play could result in significant losses for Western Europe's incumbent telecoms operators. Forrester predicts an average cumulative loss of euro 3,700 per subscriber. The analysts caution operators against rushing into IPTV, based on a detailed profit and loss model they have developed.

Faced with combined competitive pressure and massive vendor hype, several operators have already started to offer Internet Protocol Television (IPTV), along with their voice and data services. However, the Forrester study shows that incumbents need to take a deep breath before proceeding further down the IPTV path, as the odds are stacked against telco success with TV services.

Forrester’s new, detailed bottom-up profit and loss model looks at the profit potential from 15 main revenue categories across 17 countries and shows that the vendor-recommended solution would be financial suicide. The model -- which uncovers very different cost and revenue projections for each country -- predicts an average cumulative per-subscriber loss of euro 3,742 in year 10. Incumbents in the UK, France, Italy, and Spain, face the worst situation, while Deutsche Telekom (DT) faces the smallest loss. Given this very negative business case, Forrester advises telcos to see TV services as purely defensive and forget about any potential revenue and profit uplift.

Lars Godell, Principal Analyst, Telecoms, Forrester Research said: “Creeping telecom and media industry convergence and increased competition between cable companies, telecoms operators and ISPs explain why broadband triple play is seen as the battlefield for future ownership of the consumer and the digital home. However, the poor revenue potential undermines this hype -- and the big question remains: Will operators be able to make money from their push into IPTV? At the moment, the answer is no.”

Vendor hype and competitors' moves
Vendors are playing on incumbent telcos' fears of losing profitable fixed-line customers and missing out on "the next big thing." Some vendors claim that triple play will greatly reduce customer churn, double average revenue per user (ARPU), and attract 30 per cent of broadband subscribers, or deliver payback, all within five years. Forrester found that while incumbent telcos are critical of these promises, they do feel compelled to get into triple play themselves. Meanwhile, cablecos like NTL in the UK and ISPs like Free Telecom in France attack incumbents with full bundles and low prices.


Triple-Play challenges for telcos
According to Forrester, incumbents will struggle with triple play for several reasons. Few are strategically committed to triple play, but are distracted by issues like ongoing industry M&A activity, restructuring, and consolidation. Most lack a track record in innovation, especially outside their core business, and are not operationally and culturally prepared. Also, telcos seem to think that there's a pot of gold waiting in the (broadcast) content space (which Forrester believes there is not), and are taking a huge gamble that consumers will quickly change their TV viewing behavior.

It’s surprising to see how eager incumbents like Deutsche Telekom and France Telecom (FT) are to deploy very expensive fiber-backed solutions for delivering IPTV, which is exactly the main cost reason why the P&L model shows huge losses. It’s hard to see how DT’s planned €3 billion investment in fiber and VDSL networks can ever return a profit in a country where consumers enjoy up to 48 free-to-air TV channels and are used to paying very little for TV services. And FT’s plans to move aggressively into entertainment don’t stack up well against market data showing little or no growth in overall consumer spending on content services.

Report sets out a series of recommendations as to how incumbents in Western Europe can best improve the triple-play business case. “Keeping copper loops at today’s lengths and avoiding suicidal fiber investments represent the starting point for smart damage control. Incumbents should learn from BT, KPN, and Telefónica, which actively use digital terrestrial TV (DTT) in their triple-play strategies. BT and Telefónica have ordered or already use hybrid DTT/IPTV set-top boxes, leveraging the very cheap/free and widely available DTT distribution networks.

Given the bleak IPTV business case, there’s no need to rush into making potentially very costly mistakes. Telecoms operators could instead make fixed-mobile convergence a priority for churn reduction until their triple-play strategy and operational preparedness are in place.

Gary Kim from VoIP Business News/FatPipe threw out the most controversial hand grenade- stating that the IPTV business is a terrible business model from a financial perspective and predicted that telcos will continue to lose 40% of their landlines in the next decade and half their revenues. When you add up the access costs, truck roll, and pay half your revenues to content owners, the resulting P&L "is not good" said Kim. But, Kim said Telcos have no other choice than to continue to move aggressively to deploy triple play because the alternative, sitting and cannibalizing TDM voice revenues with low-margin VoIP, is suicide.

IPTV over WiMax

Intel is looking for more reasons why operators should deploy WiMAX. Intel and NDS Group have announced a trial system to show that TV and video services can travel over WiMAX and that WiMAX can offer more than just broadband access. Using the WiMAX IEEE 802.16-2004 standard and the soon-to-be-ratified IEEE 802.16e mobile standard, Intel and NDS will also collaborate on industry and market development activities. The two are demonstrating the TV capability at Intel's Wireless Competence Center in Kista, Sweden, which shows how fixed pre-WiMAX equipment can deliver content to customer premise equipment and then use WiFi to send content to the notebook. The companies intend to enhance the system to support 802.16e standard in the future. However It does not appear that WiMAX or broadband wireless will be ready to deliver IPTV in the near future. However fixed WiMAX may offer the best potential for delivery of this potential content juggernaut. IPTV over WiMax seems like a fantasy as in the current environment WiMax only has enough capacity for 10-20 channels. Qualcomm is developing a wireless network specifically optimized for TV (MediaFLO), but they're using low resolution (320x240 - equivalent to VHS) and targeting mobile devices instead of homes. In india BSNL is going to become the first telecom operator in the country to introduce WiMAX technology on a large scale just in sync with its IPTV trial. It plans to launch the service in Delhi, and then in Mumbai - the only two cities it operates services. WiMAX enables broadband access at a download speed of up to 75 Mbps through wireless. But MTNL needs to wait till the Telecom Regulatory Authority of India (TRAI) assigns frequency spectrum for WiMAX services. Once TRAI assigns spectrum for WiMAX and decides on its pricing, MTNL will offer WiMAX commercially to its subscribers. As of now, they are going to be pilot projects. After successful pilot MTNL might go for IPTV over WiMAX technology.