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09.26.2006
Originally featured on BroadcastEngineering.com
IPTV providers must work on five fronts to succeed

In May, Dr. Geng Lin joined Emeryville, CA-based broadband gateways and service delivery assurance software provider Netopia as vice president, application and server software engineering.

With more than 13 years of experience in communications software and network management, Lin previously served as a director of engineering for Cisco Systems, where he coordinated Cisco’s connected home management initiative.

IPTV Update turned to Lin for insight into the unfolding IPTV market and his thoughts on how IPTV service providers can best position themselves to succeed in the competitive battle with the cable industry.

IPTV Update: IPTV is slowly taking off in the United States, offering consumers an alternative to cable for television content. What steps can IPTV service providers take to differentiate themselves from the well-established cable companies? To what degree will interactivity and other IPTV value-added services be a competitive edge?

Geng Lin: IPTV service providers need to work on five fronts to lay the foundation of their IPTV services. One, they need to upgrade their network infrastructure and video service infrastructure to support the quality and user experiences needed for IPTV services. This includes upgrade of subscriber access devices and networks, such as DSL-based or PON-based residential gateways and FTTx access networks, next-generation video-ready DSLAM devices, edge network devices such as BRAS, and core network routers with more bandwidth capabilities.

Two, they need to build a new video service infrastructure, which did not exist before for them as traditional telcos. This includes the video servers, the headends and superheadends, and a robust IPTV middleware to handle EPG and DRM issues, just to name a few.

Three, they need to build relationships with content providers to acquire and create entertainment content for differentiating IPTV services and to address content owners’ concerns about DRM.

Four, they need to upgrade their Operations Support System (OSS) to support and automate the management, operations and administration of the network, the services, and content sharing. The fourth aspect is a vertical aspect that touches all the other three fronts (network infrastructure, video service infrastructure and content acquisition).

Five, they need to understand the consumer use model for IPTV. Right now, most vendors are building to the broadcast model, yet the success of iTunes and YouTube might mean that a unicast model is much more relevant.

It is worth pointing out that to build such a comprehensive framework is very challenging work, and leading IPTV service providers across the world today are working with various technology and equipment vendors and content providers to assemble this large ecosystem.

There is no question that the ability to offer personalized services will be a key competitive edge for IPTV against cable TV. Interactivity and integration with the vast amount of content residing on the Internet will be a key factor there.

IPTVU: How important is an HDTV offering to IPTV success? What are your views on the ability of existing IPTV infrastructures to deliver the required bandwidth for multiple HD channel delivery to the home — particularly via a non-fiber based approach?

GL: HDTV will be a key offering in IPTV services. However, the driver for HDTV is more about specific timing of HD standards and technology adoption and less about the fundamentals of IPTV as a new business phenomenon. In order to support HDTV, significant upgrade of network infrastructure is needed, and in a way, one could argue that the telcos' drive into IPTV services provided a convenient timing for it.

There is no doubt in the long run fiber-based access devices (e.g. PON devices) will provide the best bandwidth solution for the residential home. However, if you look at today's VDSL capability, it is able to support the needs of multiple HD channels (and SD for the rest of the channels) already. With the expected further advances in modulation techniques and bonding, and video coding/compression algorithms, it is expected the DSL-based access devices can support the need for IPTV services for many years to come.

However, we also need to consider previous experience with mobile telephony and Voice over Internet Protocol. At one point, the industry assumed that only high-definition voice would ever be acceptable to people. Instead, we discovered that quality could be traded off for portability and price. I think we are seeing that now with the success of the video iPod, the SlingBox and even live news on mobile phones. In the end, the user model will determine how important HDTV is to the commercial success of IPTV.

IPTVU: How would you characterize the debate over net neutrality in regards to Internet TV vs. IPTV? It seems telephone companies traditionally were common carriers, but in the IP world, they are seeking to assert a superior position as infrastructure owners to advance delivery of the content they supply. What are you thoughts?

GL: I believe Internet TV and IPTV will develop into a complementary situation in that IPTV's strength is to offer services that require robust and guaranteed quality of services and experience, supported by the controlled and well-engineered IPTV infrastructure provided by the IPTV service providers, versus Internet TV's strength, which is its openness, interaction and agility to incorporate new services and contents more freely than IPTV.

Just as other services offered over the Internet platform, the bar on video-based services, whether in the forms of IPTV or Internet TV, will be a moving line. One can take the development of VoIP services as an analogy. In the end, the service providers’ success at bundling and packaging content versus pursuing their current a la carte strategies will be more a determinant of the eventual outcome of the net neutrality debate. If the latter prevails, the service providers will probably prevail by offering differentiated services level as customers will be willing to pay.

IPTVU: In the real world, has IP delivery of video proven itself in terms of reliability and quality of service, or does there still need to be improvement before IPTV providers can take on the cable industry on a level playing field?

GL: IPTV providers are in the beginning phase in their battle with Cable MSOs, in that many of them have started to introduce commercial IPTV services now or plan to introduce these services soon. But none of the existing IPTV services have reached the scale of today's cable TV offerings yet in terms of the number of the subscribers.

Few of today's IPTV providers have delivered IPTV services to more than 1 million subscribers while large-scale cable MSOs offer TV services to tens of millions of subscribers. As the number of IPTV subscribers increases, IPTV providers need to continuously improve the scalability, reliability and manageability of their network infrastructure, video service infrastructure and backend OSS support infrastructure. It is expected, however, these improvement will be gradual and from a technology standpoint, the IPTV industry has passed the "tipping point," namely the war with cable industry has began.

As I mentioned earlier, the most disruptive change that would eliminate cable TV’s current commercial advantage would be a rapid shift by consumers away from broadcast to unicast. In this case, the Cable MSOs would have no inherent technical advantage and would be faced with the prospect of substantial network upgrades. Such a scenario would eventually lead to the consolidation of the broadband industry, and not just between cable MSOs and telco’s, but also between wireless and satellite providers. In our view, the DSL providers would have an inherent advantage, as evidenced by recent industry events where wireless operators Vodafone and O2 have chosen to enter the broadband market through DSL.

IPTVU: Is there anything else you would like to add?

GL: I personally believe that the biggest challenge for carriers is to avoid the early mistakes that were made in the broadband market. Right now, as before, IPTV requires the customer to absorb the significant costs of systems integration and support. I do not think that most consumers are up to that challenge.

We still need to consider television to be a relatively low involvement activity. I think the more successful carriers will have strategies to remotely configure, activate and manage devices that will make up the home network.

The DSL Forum is engaged in a lot of work right now on that front. The TR-111 specification enables remote management system to peer through the gateway, and with TR-069, configure and manage devices like STBs on the home network.

The real key will also be to assist the customer in the use of the system in a more interactive and collaborative way. Right now, the model of asking customers questions over the phone and hoping they can find the answers on their system — and read them back — is a complete non-starter for complex applications. Carriers will likely need to reach out, and with the customer’s permission, remotely control the remote device. We see evidence of that now in the Software as a Service market, and we expect it to become predominant for IPTV deployments.


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