Middleware, STB fingerpointing leaves Tier 2, 3 operators in bind, says Bulk

The time projected to integrate middleware and set-top boxes has far exceeded promised deadlines, with significant consequences for Tier 2 and Tier 3 companies, says Frank Bulk.
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Occasionally, a reader will respond to a Sound Off interview with such perspective that an interview of the reader is appropriate.

Such is the case with this week’s Sound Off interview. Writing in response to IPTV Updatesinterview with UTStarcom’s Manish Matta (Jan. 22), Frank Bulk, technology and product development manager at Premier Communications in Sioux Center, IA, took issue with the reasons Matta gave for the slow development of IPTV services by Tier 2 and 3 providers. Rather, Bulk identified a general failure on the part of many middleware vendors to deliver on promised deadlines and the lack of industry standards as significant obstacles to timely IPTV service roll-outs.

In this, the first of two parts, IPTV Update asks Bulk about his independent telephone company’s IPTV service roll-out experience and the delays he alluded to in responding to Matta’s interview.

IPTV Update: You recently responded to Manish Matta’s Sound Off interview by questioning some of his assertions regarding IPTV service roll-out by Tier 2 and 3 operators. Specifically, you take issue with several of Matta’s assertions. Could you elaborate?

Frank Bulk: Matta asserts there are two major obstacles in the path of the Tier 2 and Tier 3 operators: lack of critical mass in terms of the number of broadband subscribers on their networks; and the content aggregation at an effective cost that would make the business case profitable. On the first point, he appears to be conflating the IPTV market with that of Internet TV, both wholly different in terms of product, content and market reach. But service providers aren’t counting broadband subscribers when considering the marketable content of their IPTV offering. Their chief concern regarding a potential customer base is that there is sufficient last-mile bandwidth over their twisted-pair copper or fiber facilities.

Besides the relatively rapid work that Tier 1 operators AT&T and Verizon are doing, there are many Tier 2 and Tier 3 operators that have already built out substantial portions of their plant to deliver IPTV. If Matta’s concern regarded customer counts, it is true that there are some ITCs with several hundred or thousands of customers for whom an independent IPTV solution is not feasible. There are several companies that have packaged all the pieces into a single solution that brings IPTV within closer reach, and for others, a regional partnership is possible.

To his second point, content aggregation, there have been some challenges, but it’s not an impossible one to overcome. In fact, on the broadcast side, it’s been largely addressed. While it's unfortunate for smaller service providers that the NCTC has closed the door to new members, there are other options.

Third-parties, such as SES Americom/IP-PRIME, Falcon Communications and Avail Media, for example, have done much of the hard work in negotiating agreements. In our particular and perhaps unique situation, a regional headend has negotiated content and retransmission agreements for us, and we individually negotiate those contracts where it's required or where we can obtain better pricing.

IPTV Update: What’s been the experience of your Independent Telephone Company, especially in terms of middleware and set-top boxes?

Frank Bulk: IPTV middleware and hardware have been a parade of delays. When we initially assessed the middleware solutions in late 2004, there was a basic but functioning middleware working on MPEG-2 single-stream boxes. We were promised DVR support and purchased set-top boxes so we could roll out those as soon as the software came out. Those boxes are still sitting in our warehouse collecting dust.

The middleware vendor pointed at the STB vendor, and vice versa, and just a few months ago, the middleware vendor told us that it was definitively dropping its development plans for that box. MPEG-2-only multi-stream gateways have made it even less far in the development process. There is a simple explanation for the delays: The middleware vendors targeting the North American market wanted to capture as much of it as possible, and so they worked with as many STB and encryption vendors as their customers requested, but the matrix of possibilities and lack of standards meant that integration times stretched on for months and years.

In 2006, MPEG-4 started to become a reality with the first encoders from Skystream and Tut Systems coming to market, which meant that STB vendors and middleware vendors had content to work with. For the middleware folks, MPEG-4 development work took resources away from expanding the capabilities of their MPEG-2 offering.

The feature set we have today is essentially the same as we had when we went live three years ago. The slide decks showing interactive content and applications like IM haven’t become a reality. Microsoft didn’t bring an MPEG-2 product to market, and despite the publicized delays, now has a much more feature-rich solution than any of the middleware vendors targeting the Tier 2 and Tier 3 vendors.

IPTV Update: What impact has the development and roll-out of MPEG-4 IPTV solutions had on ITCs that had previously committed to and were deploying MPEG-2 based infrastructures?

Frank Bulk: When it comes to MPEG-4 STBs, I can still recall our vendor promising single-stream hardware by September 2006. Our middleware vendor had a target of Q4 2006 to provide the first software releases. Due to chipset issues as well as driver issues, the STB availability dates continued to slip. By Christmas 2006, with no product in hand, the vendor had to re-assess its STB/conditional-access integration plans.

Despite new goals in early 2007, our vendor’s first testable MPEG-4 middleware didn’t arrive until late 2007, and even then with only one conditional-access vendor. The supported STB is unable to record MPEG-4 HD streams, with the middleware vendor suggesting that it is not able to meet the STB vendor’s stated performance capabilities.

Anticipating the delays with our middleware vendor’s MPEG-4 support, our state-wide partner, who currently coordinates and interfaces with the incumbent middleware provider, reviewed and chose a second middleware and conditional access vendor in Q1 2007. Despite this new vendor’s claims of quick development and integration time, and a go-live time in Q3, it’s now Q1 2008, and it remains rough around the edges with multi-second channel change times for HD content.

We’re still sitting on the fence, having reviewed that new product and another trusted partner’s product, but we’re not willing to choose a path until we see a marketable product from one, if not both. Both promised 18 months ago they would have something solid mid-year 2007, and only now in the spring of 2008 is a product that we could possibly trial coming to bear.

As mentioned earlier, the availability of MPEG-4 encoders precipitated the work of STB and middleware vendors. But normal development efforts compounded by STB hardware and integration issues drew resources away from expanding and enhancing the IPTV experience on the MPEG-2 middleware platforms.

All the cool things we saw and heard, such as IM, e-mail, skins, etc., never materialized. This level of customer interactivity is what is supposed to set IPTV apart from traditional digital TV, but besides what Microsoft has brought to market, the North American middleware vendors have little to show.

MPEG-2 based VOD never really took off, either. I think the VOD vendors also saw the writing on the wall when they looked at MPEG-2 based IPTV. On the other hand, MSOs have done quite well with their own QAM-based MPEG-2 VOD offerings as they have had that in place longer and bandwidth hasn’t been as capacity-constrained as the copper networks.

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