IPTV is said to be “what you want, when you want it,” or essentially video on demand. It evolved as a way for owners of the telephone system infrastructure to compete with terrestrial, cable and satellite service providers. To see how it is changing the competitive landscape, we'll examine various technical and business aspects of the medium.
The infrastructure
IPTV is made possible by the maturity of two technologies: digital subscriber line (DSL) modems and the advanced video codec MPEG-4 Part-10. The first is a high-speed modem that can operate on existing telephone lines, and the second is the state-of-the art in highly efficient video compression.
The IPTV system architecture is similar to a digital cable system. (See Figure 1.) Content is aggregated at the headend and then sent to the telco central office (CO), the latter being unique to IPTV. At the CO, a DSL access multiplexer (DSLAM) performs the routing function to connect individual programs with subscribers. In essence, this is a switched-video service that functions like a switched-voice (wired telephone) service, allowing unique programs to be delivered to a subscriber one or two at a time. An asymmetric DSL (ADSL) modem delivers the video the last mile and supports a bit rate of between 512kb/s and 6Mb/s, depending on the distance between the CO and the customer premises equipment. All modern installations of ADSL are based on the discrete multitone (DMT) modulation scheme, essentially orthogonal frequency-division multiplexing (OFDM), similar to the modulation used in Wi-Fi modems. The final connection relies on the embedded copper twisted-pair local loop.
A newer technology, very-high-speed DSL (VDSL), supports bit rates from 10Mb/s to 40Mb/s. Such a system typically delivers 155Mb/s to 622Mb/s streams over fiber to a neighborhood network node, which in turn, uses a very-high-speed DSLAM (VDSLAM) to relay a lower speed signal over twisted pair to the customer premises.
Another IPTV variation using fiber-to-the-home (FTTH) delivers 155Mb/s to a network node, typically within a multifamily dwelling. The node then distributes video over a 100BASE-T in-house digital network. Because of the high bandwidth all the way to the home, such a system is capable of simultaneous multiple-channel delivery to each subscriber.
IPTV uses existing Internet protocols to transport the video and audio streams. Real-time Transport Protocol (RTP) and Real-time Transport Control Protocol (RTCP) are both used to relay packets over the IP connection. RTP uses a standardized packet format for the encoded content, and RTCP allows quality-of-service information to be sent upstream to provide trouble-free program reception. IPTV uses these standard Internet protocols, so it can also be used to deliver video anywhere that Internet service is available. In fact, IPTV can be used to send video — over a cable modem — through an existing cable TV system to homes equipped with Internet service, a situation that can (ironically) allow competition directly with the cable provider's intrinsic TV services.
The attraction
Telcos are a powerful force driving the implementation of IPTV, as the service providers are faced with growing competition for the delivery of voice and Internet services. Therefore, they are looking for ways to maintain the value of their legacy infrastructure, as well as to provide compelling reasons for consumers to keep their copper landline phone service. Cable TV providers have already positioned themselves in the same way, by providing the triple play of TV, voice-over-IP and Internet services.
A big advantage to IPTV is that the infrastructure is less expensive than broadcast or satellite, as there are no broadcast towers, transmitters or satellites (transponder space) to purchase or maintain. For the consumer's equipment, manufacturers can almost develop and build a single set-top box (STB) for the entire worldwide market. (The video output interface is different for TVs specific to local standards.)
Chip development for IPTV is also proceeding at a growing pace, lowering STB costs. Firms have created a single-chip set-top solution for IPTV services in China, where market research firm In-Stat pegs China's IPTV subscribers at 6.3 million by 2010, generating annual revenues of $888 million.
The STB — whether for IPTV, or even cable or satellite — takes some functionality out of the TV receiver. The tuner is the most obvious of these functions and represents a certain redundancy, and that means more cost overall.
Not so well appreciated, however, is the program guide that must reside in the service-specific hardware. For these reasons, TV manufacturers have already tried to take back control of the TV by integrating digital cable-ready features. The success of this can be debated, however, with such loss of control not in the best interests of the cable service providers. In fact, there have also been satellite-integrated tuners in TVs, most notably by RCA, perhaps due to its business relationship with satellite service provider DIRECTV. Similarly, we might eventually see IPTV functionality integrated into TV receivers — most likely where there can be a tight coupling between the manufacturers and service providers.
For the headend, various manufacturers provide partial or complete hardware solutions. Servers, routers and streamers move the content around. Transcoders convert from one compression format to another, and provisioning systems handle all of the ordering and entitlement processes.
The challenge
The telcos must make a huge investment to provide this service. As one example, SBC (now AT&T) and Verizon are committed to $10 billion in upgrades, including for IPTV, by 2010. The equivalent of a new nationwide television network must be built, not only from the hardware standpoint, but also from the service, content acquisition and distribution sides. Another hurdle is the fact that content providers have historically been extremely guarded in their deals with service providers, and have an entrenched pecking order that they use for release of content.
However, various types of plant infrastructure could reduce costs, increase reliability and maximize revenue. Also, because both unicast (one-to-one) and multicast (many-to-many or one-to-many) routing are possible, the service providers have different operational scenarios to consider.
The trade-off is in how many subscribers one can service profitably. Think of it as choosing from one of many business models, with (local) cable at one end, and (national) satellite at the other. Although a large number of subscribers sounds attractive, the increase in complexity is sobering, especially considering that the transport protocols have inherent limits on how quickly they can respond to dynamic changes in subscriber loading. Nonetheless, technological progress is being made in advanced technologies and the optimization of real-time RTP/RTCP for large-scale deployment of IPTV.
Conclusion
IPTV is allowing large telcos and other operators to offer services that can directly compete with existing service providers. As the delivery of video and audio to the home continues to push new business models, the playing field is evolving toward more features for the consumer and more possibilities for instant (entertainment at least) gratification.
Aldo Cugnini is a consultant in the digital television industry.
Send questions and comments to:aldo.cugnini@penton.com
