Telcos challenge cable on franchise regulations
Charles Dolan, smiling despite his mega-million losses at the recently shuttered Voom direct broadcast satellite venture, was studying the Internet Protocol Television exhibit at the Scientific-Atlanta booth within the sprawling SuperComm tradeshow in early June.
"I'm trying to figure out IPTV," the Cablevision Systems mogul said. In his quest, Dolan was joined by many of the more than 30,000 other SuperComm attendees. IPTV--the competitive video component of the telephone industry's "triple play" (bundled with voice and high-speed data delivery)--was a pervasive factor in dozens of exhibits and countless SuperComm speeches.
For example, Verizon Chairman Ivan Seidenberg, during a briefing after his keynote address, concentrated on his company's video agenda, including a feisty competitive stance against cable TV.
Verizon will carry "significantly more HDTV channels and integrate [services] of TV and PC within a short period of time," Seidenberg said, offering no details about such services. He pointed to the planned video-on-demand channels as delivering "additional gaming and information services."
As did many other telephone industry executives here, Seidenberg focused on the regulatory hurdles facing IPTV and telco's moves into video delivery--especially in the wake of a recent Texas regulatory set-back for them. (The state denied Verizon and SBC's quest for a statewide franchise, rather than the locality-based franchises required of cable systems).
Seidenberg characterized as "bizarre" the demands that telephone companies should seek franchises in areas where "we're the third or fourth provider" of video services--especially since signals will travel via upgraded Verizon infrastructure in existing local networks. But Seidenberg reaffirmed that Verizon will pay comparable franchise fees to local governments.
"Cable companies see us as an insurgent," he said. "It's in their interest to slow us down. In the long term, the market causes industries to converge."
His comments about convergence presaged frequent references to the telephone industry's eagerness to develop multiple services--with IPTV spotlighted as one way to bring digital videoconferencing to business. Seidenberg alluded to "3D advertising" as one of the video features that IPTV will enable--again without details.
FCC Chairman Kevin Martin, in an on-stage discussion with the presidents of the two associations that own SuperComm, also acknowledged the franchise factors.
"I'm sympathetic to the concerns being raised," Martin said, adding that he liked "the prospects of having additional competition."
"We need to reexamine the fundamentals," Martin said, referring to "the silo approach" for regulating various platforms. "At some time, we'll have to take that on."
As for the DTV transition, Martin said that the FCC will execute Congress' demands, focusing on the "hard date" for turning off analog broadcasting.
In particular, he cited "one value of a hard date" is that it will "drive down the prices of boxes." Martin said "minimal consumer disruption is the most important thing." Asked about what he hopes his legacy will be, Martin said, "We created a level playing field for these services."
Martin also observed that his visit to the SuperComm exhibition floor "looked a lot more like CES" (the Consumer Electronics Show), noting in particular "seamless roaming," a reference to a Motorola exhibit that demonstrated how a handheld RFID (radio frequency identification) card could allow viewers or listeners to enable their favorite content to "follow" them as they move between rooms in a house, to their vehicles via various playback devices.
THE MOBILE EXPERIENCE
Motorola, like Scientific-Atlanta a major supplier to the cable TV industry, joined dozens of vendors in showcasing their IPTV and converged technology platforms.
"The business model is still to be worked out," Dan Moloney, president of Motorola Connected Home Solutions group, said after demonstrating the interconnectivity. "Our number one objective is to get communications to help the mobile experience."
Motorola unveiled several IPTV set-top boxes, including HDTV versions and devices that include digital video recorders. Prices are expected to be under $350.
Scientific-Atlanta's booth offered a line of IP set-tops, which can handle both standard definition as well as HDTV plus on-demand services, games and Web-based applications. S-A emphasized that all of its equipment is NTSC-and PAL-compatible and can support multiple standards, including MPEG-2, AVC and VC1.
Thomson extended its IPTV set-top box line-up to include an HDTV unit (model RCA IP1100), although pricing has not yet been set. Keith Wehmeyer, general manager-IP Video, North America for Thomson, said that "just getting set top boxes cheaper "would be helped by standards." He pointed to the cable and satellite broadcasting industries, each of which has exploited consistent digital technology to grow.
"We could be doing that same thing," Wehmeyer said, urging that some group--he suggested the Consumer Electronics Association or the DSL Forum (a consortium of more than 200 DSL-related manufacturers and organizations)--"develop consistency." He suggested that the technology companies then "take that capability and integrate it into TV sets."
Elsewhere on the SuperComm tech floor, vendors such as Westell, Ericsson, Siemens and UTStarcom cast their set-top boxes in the role of media centers. For example, high-end versions of the UTStarcom "Media Console" can handle Gig-E PON for delivery of up to 100 channels. Westell's "Media Gateway" integrates a broadband wireless gateway and cordless telephony with a multimedia engine and a color LCD touchscreen into a desktop device.
Kasenna introduced its PortalTV feature, a customizable turnkey application suite for delivering entertainment services. PortalTV offers a Web services-based delivery platform from which telephone companies and other carriers can use to brand and customize their services.
Kasenna's IPTV application suite was on display at several booths, including the IBM exhibit, where it was part of that company's media server, the IBM Websphere Application Server for Telecom (WAST).
The avalanche of IPTV promises at SuperComm was tempered with warnings about the timetable for introductions.
For example, Carl Russo, president of Calix, a technology platform provider, cautioned that competitive video bundles "need to reflect changes in consumer behavior, [including] more choices, more on-demand and more interactivity."
"The choice of whether or not to offer video services and the selection of underlying access technologies are largely independent decisions," Russo said in his luncheon remarks to an IP Video conference under the SuperComm umbrella. He referred to the various architectures of FTTP, FTTC, FTTN (fiber to the premises, curb or node) and pointed out that "properly engineered, IP-based video services will operate over any copper, fiber or even wireless networks." He stressed that "successful service providers [should] focus heavily on the consumer experience."
Russo's remarks fit into the ambitious but cautious milieu of SuperComm vendors and speakers. Despite the high-profile IPTV announcements from SBC and Verizon, vendors acknowledged that most of their focus for now is on "tier two and tier three" telephone companies, the smaller, regional companies that are often more aggressive in their video objectives.
"Telcos have to solve network issues, build up their capacity," said Thomson's Wehmeyer. He also cited fundamental infrastructure issues--such as remote management and diagnostics--that are essential to the video agenda, and which will require substantial "OpEx" (operating expense) commitments.
Telcos challenge cable on franchise regulations