Leading telcos in South Korea, France, and Japan, all of which offer 8 Mbps DSL service, will soon be offering video-over-ADSL, says ABI Research. North America, perpetually behind the world’s broadband leaders, is now starting to get 3Mbps DSL service from SBC, BellSouth and Verizon, however, and may be in the market for IP-TV settops, opines ABI Research.

Broadband growth is exploding:

• South Korea, with 71 percent broadband penetration, may serve as a lab–and eventual supplier–for the home of the future. Content hubs like Hyppo and NetTv are popular in Asia.

• Softbank’s ADSL service helped make Japan the world leader in numbers of broadband users and now feature 45Mbps service. They introduced 8 Mbps ADSL data service in September 2001, attracting more than 100,000 subscribers in the first month alone. In August 2002, Softbank BB introduced Japan’s first 12Mbps service, which also provided subscribers with a personal mailbox, a homepage, and a wide range of value-added services. Softbank BB is the first competitive carrier in the world to surpass the incumbent provider in market share.

• European EU15 member states all have national broadband strategies in place and the new member states will table theirs before the end of the year.

• In Sweden, a 100Mbit/sec broadband connection will cost 70 a month ($120), and that speed is in both directions.

In North America, only a few rural telephone companies, generally run by Public Utility Districts, offer such broadband services. But with just over 28 million broadband subscribers out of a potential market of nearly 120 million households (containing over 292 million TV sets), North America may be ripe for growth.

• In North America, 3 Mbps DSL services have been introduced by SBC, BellSouth and Verizon, and may stimulate the market for IP-TV settops

• Last month Verizon Communications, the nation’s largest telecom provider, announced the completion of their national MPLS/IP network, the backbone of both their enterprise and residential VoIP plans. According to Verizon, the pricing for both their higher speed 3Mbps service and their VoIP service will be announced at a later date.

• Some 60% of the U.S. population lives within 3,000 feet of their CO. The top speed for ADSL lines is around 8 mbit/sec for the download, and 1 mbit/sec for the upload. For SDSL lines the top speed is 2.3 mbit/sec on both the upload and download. Typical residential DSL usually has a maximum of 1.5Mbps, but special connections for home and office can go well above that.

According to ABI Research Director of Broadband Research Vamsi Sistla, the idea of sending IP packets to a box in your home other than your computer, is an idea whose time has come.

The set top box is a familiar object, but the IP STB is something new. An IP STB does not have a cable tuner or satellite tuner built in, he says, just an decoder/encoder, storage, interfaces to connect to Ethernet wiring, and RCA jacks to connect to a TV. With that setup you’re can watch movies over your broadband connection. It uses IP - Internet Protocol - rather than digital cable or satellite to transmit video content. IP-setops use the broadband Internet to download movies, music and stream live content.

The ability to deliver video over IP with copper wire in the last mile, has the potential to transform business models in this market, says Sistla.

In new model, content owners could either partner with a middleman or deal directly with the consumer, along these lines: “you have a broadband connection. We don’t care where you’re getting that from - cable or DSL. We’ve got content sitting here on the Web. You just log in, download it, and you can view it on your TV.” And not just the TV: HP and Microsoft are pushing the concept of the computer-based “Home Media Center” which, alone or connected to a TV, would be a natural fit with IP delivery.

The U.S. home video industry generated an estimated $23.4 billion in consumer spending in 2003, $14 billion from sales and $9.4 billion from rental. DVD commanded the lion’s share of the sales market ($11.8 billion) and a little more than half the rental market ($5.2 billion).

Two limiting factors include the modem and the wiring. Most home use DSL modems are limited to 10Mbps on the user (LAN) side. The wiring from the modem to the computers is normally Category 5 wiring, or thin ethernet, and that is limited to 100Mbps speed.

IP set top boxes are used in fibre to the home (FTTH), DSL networks and fixed wireless systems. They provide digital TV over IP. The services can include IPTV, video on demand, Internet web browsing, web conferencing, gaming and voice-over-IP. Research firm Instat forecasts the IP set top box market will reach 19 million units through 2007 as service providers offer broadcast TV and VOD to a larger number of households.

• Kirkland-based Digeo which makes the Linux-based Moxi settop, will be used by Comcast, the nation’s largest cable provider, in a handful of cities this year. Comcast has agreed to deploy 40,000 media centers in a few markets in the second half of the year.

• Kreatel and Texas Instruments use TI’s digital media processors for its upcoming IP set top box products. It offers a full range of advanced audio and video coding algorithms from MP3, AAC and Windows Media Audio series 9 to MPEG 2, MPEG 4, H.264, Windows Media Video series 9 and other codecs. The data processing capabilities offered by the device allow the support of a wide range of advanced applications, including Personal Video Recording features, high definition TV (720 lines) and video conferencing systems (H.323, H.263). Linux applications can run natively on TI s digital media processors.

• Wal-Mart is now the top video retailer in the country, according to Video Store Magazine with 17.6 percent, to Blockbuster’s 14.6 percent. Wal-Mart’s video revenue grew an estimated 27 percent from 2002’s $3.4 billion, while Blockbuster’s revenues remained flat.

• Netflix plans to deliver films via Web in 2005, currently they’re using the mail. Studio giants like Sony and Time Warner have already established Movielink to download movies over the internet to a home computer. Movielink charges $2.99 to $4.99 per rental. Disney’s MovieBeam provides 100 new video releases and high-demand movies for a monthly fee of $6.99, plus $2.49 to $3.99 for a 24-hour rental.

• The $299 DIVA uses Windows Media 9 to record more than 11 hours of television programming onto a DVD.

• DISH and DirecTV, soon to be offered by Qwest and Bell South, provides a free PVR to new subscribers who purchase a year’s service.

IP Television, with MPEG-4, could lead to new distribution options and architecture. With H.264-based MPEG-4 encoding, a broadcast quality stream requires only 1Mbps. MPEG-4 will lower the cost of storage and transmission and it’s compatible globally.

Cisco has introduced two new transport products designed to allow cable operators to better take advantage of their Gigabit Ethernet-based video-on-demand (VOD) networks. The standalone Cisco uMG9820 QAM Gateway and the Cisco uMG9850 QAM Module, both serve as IP-to-MPEG-2 gateways between a Gigabit Ethernet transport network and an HFC cable network. Up to 240 standard-definition video streams per device, fully utilizing the capacity of a Gigabit Ethernet link.

Former FCC Chairman Reed Hundt has a vision. He thinks a 10 to 100 Mbps network for every household in the U.S. is doable. Then we can stop funding the phone network and “sell off the HDTV spectrum for 10s of billions of dollars.”

As the convergence story evolves, a synthesis emerges. It is the next generation network that can be discerned in the fog of the future. Its lineaments are 10 to 100 megabits per second to the home, 1 to 10 gigabits a second to the enterprise, IP protocols, packets of course but more edge-centric than switch-centric in terms of control, wireless home and business LANs fanning out like peacocks’ tails from the edge of the wire network, fiber fairly far to the edge, computing everywhere, software gluing the contraption together, and myriad handheld or hand-carried devices connecting all the time anywhere to the Net, the Web, the world’s devices and users.

Who needs cable. String up 802.16a/e microcells every few blocks, backboned with MPLS routers. Subscribers with a $100, 802.16a bridge near the window, could run it to a $199 Akimbo IP-TV box, a Digeo PVR or Pace settop with integrated WiFi.

Triple play.

Posted by Sam Churchill on Monday, May 17th, 2004 at 3:14 am.