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Full-scale IP-TV rollouts are underway in Hong Kong, Italy and France, but delivering HDTV to settops is not without risks and setbacks, say industry trades. TDG research predicts IPTV may be a $17 Billion market by 2010, with 20 million subscribers globally. VOD and other services will likely first be developed where broadband is fast and cheap — Asia.

IPTV is big in the far East, reports Converged Digest. In Hong Kong, PCCW’s NOW Broadband TV has some 450,000 IPTV subscribers. Over 13 million DSL subscribers in Japan will soon get IPTV services through Softbank/YahooBB and NTT. Korea, with the world’s highest broadband penetration (78%), plans to launch IPTV in 2005/06 via Korea Telecom and Hanaro Telecom.

SkyStream Networks is trying PUSH video on demand, which pushes popular movies to the settop, rather than requiring them to be individually downloaded across the telco s network.

But Australian telephone giant Telstra has canceled its field test of Microsoft’s Internet Protocol TV, another setback for the software giant’s TV technology efforts. Telstra decided it was premature to move forward with Microsoft TV IPTV set-top-box. Last month, Swisscom delayed its commercial introduction of Microsoft’s IPTV to 2006 from the second half of 2005. Minerva Networks, a maker of IPTV software, said it may have been slow phone lines.

Tut Systems says it has deployed the first MPEG-4 headend in North America. Farmers Telephone Cooperative, Inc. (FTC) selected the Tut Systems Astria Digital TV platform to serve as the core video processing system for its all-MPEG-4 AVC digital headend.

Light Reading brings us up to speed on the latest move by telcos: HDTV via MPEG-4 settops

Farmers Telephone Cooperative, a 60,000-subscriber operator in South Carolina, says their IPTV service [based on Tut Systems] is not available commercially yet, but the telco is already streaming a limited number of channels in MPEG-4 to “a limited number of people.

MPEG-4 video streams require about half the bit rate of MPEG-2 streams yet deliver comparable picture quality. To deliver two HD channels via MPEG-2 requires a bit rate of 16 to 18 Mbit/s, while the same two channels would use only 6 to 8 Mbit/s using MPEG-4 compression.

SBC is using the twisted pair that’s already installed and VDSL2. They run the twisted pair to a passive fiber hub in the neighborhood. That should deliver 25 Mbps to most homes.

To distribute one channel of high-definition video, a network needs about 20 Mbit/s of bandwidth for MPEG2, 5 Mbit/s to 8 Mbit/s for Windows Media 9, and 6 Mbit/s to 7 Mbit/s for MPEG4. SBC says it will provide 6 Mbit/s to 8 Mbit/s per HD channel.

Harmonic also claims to have the first encoder streaming MPEG-4 in the real world. The company s director of telco solutions Thierry Fautier says Video Networks Ltd. (VNL) began streaming Turner s Toonami in MPEG-4 to subscribers in suburban London April 18.

We… are creating a world first with the first ever broadcast channel to switch to MPEG-4/AVC encoding, says the operator s CEO Roger Lynch in a statement released by VNL. VNL is working toward the complete conversion of its 80-plus channels to MPEG-4 by the end of this month.

Harmonic is a Microsoft partner so its encoders support Microsoft TV s preferred codec, Windows Media 9 (see Microsoft, Harmonic Team for IPTV). But so far, encoder vendors report a clear preference among North American telcos for the MPEG-4 codec.

MPEG-4 Compression
Use Scenario Resolution & Frame Rate Example Data Rates
Mobile Content 176×144, 10-24 fps 50-60 Kbps
Internet/Standard Definition 640×480, 24 fps 1-2 Mbps
High Definition 1280×720, 24p 5-6 Mbps
Full High Definition 1920×1080, 24p 7-8 Mbps

Alcatel America CTO Kenny Frank told Light Reading that Microsoft TV customer SBC Communications doesn’t plan to use Windows Media 9 in its IPTV network, preferring MPEG-4 instead (see Alcatel & Microsoft Going Steady).

European operators, sources say, are split evenly between MPEG-4 and Windows Media 9 (see Europe Tunes In to IPTV).

There are other encoder vendors just a step or two behind Tut and Harmonic in deploying MPEG-4 encoders. We re shipping them as we speak, says SkyStream Networks CEO Jim Olson. The encoders, Olson believes, will begin streaming MPEG-4 in the networks of several Tier 2 carriers beginning next quarter (see SkyStream Wins IPTV Deals and Progressive Picks SkyStream for IPTV). Olsen says virtually every telco that is doing video is now actively looking at adopting the MPEG-4 codec.

Many in the industry expected the move to MPEG-4 to happen much sooner than it actually is (see Conexant, Tandberg Demo MPEG-4). But that movement has been slowed considerably because the set-top boxes needed to decode the MPEG-4 HD are largely unavailable.

The problem is the chipsets that go in the set-top boxes. Sources say set-top box manufacturers are only now beginning to take shipment on the chipsets needed for their new MPEG-4, HD-ready set-top boxes (see Broadcom Demos HDTV Over ADSL2+).

Harmonic s Fautier says his company has deployed MPEG-4 encoders at several of its carrier customers, but the absence of the souped-up set-top boxes is preventing conversion to the advanced codec.

The slow delivery of the chipsets is having its consequences. Sources say it s another reason IPTV deployment targets at places like SBC and Swisscom AG are being pushed back (see SBC, Microsoft Defend Lightspeed and Swisscom IPTV Stall Sends Shivers).


IP-TV Pitfalls

Hong Kong’s PCCW has become a poster child for IPTV, says Robert Clark in an article for Telecom Asia (pdf). PCCW, the incumbent telco, delivers TDM voice, DSL broadband and NOW, their VOD service to some 450,000 IPTV subscribers.

Experts offer some tips on the pitfalls of IP-TV, and how to avoid them.

My major message would be, you really need to look carefully at the market, says Ovum analyst Charlie Davies. It might be possible to do IPTV, but you have to look at the market dynamics and what can you do as a telco.

Another opportunity is to take on the cable customers who are paying premium dollars for a small number of cable channels, and target them with much more flexible channel offerings.

The other mistake is on the content side. It s natural for telcos to respond to a competitor s content product with something similar. But content is all about differentiation.

They end up paying more for something that their competitors have, and that doesn t give them a lot of value, says Jeffrey Soong, CEO of Hong Kong-based BNS Ltd.

Soong, a consultant and systems integrator specializing in IPTV, says triple-play is “first and foremost defensive.”

Hong Kong has six mobile operators, five fixed network operators and one cable player. A more intensively networked city does not exist.

Europe has been doing interactive television for years, of course. MPEG-4 may make it practical on a global scale.

Content providers like AC Interactive bring interactive coverage to events like the America’s Cup with internet-based race animations, interactive games and video clips.

Pace Micro, a major UK-based settop box company, is working with Seattle-based Equator Technologies and Germany’s Dicas, the leading provider of MPEG-4 AVC/H.264 (AVC) software codecs, to develop a new MPEG-4 AVC-based IP based set top box. The Pace DB680, will provide access to a full range of digital TV services such as pay-per-view, video-on-demand and streaming applications using the latest MPEG-4 standard.

Microsoft’s TV-2 settop box ($200), manufactured by Thomson under the RCA brand, uses a 733MHz Intel Celeron processor equipped with 128MB of RAM running Windows CE and supports Windows Media. MSN TV subscription packages are required to receive MSN TV service, which range from $9.95 monthly, or $99.95 annually for users who connect through their own broadband service, and $21.95 monthly or $199.95 annually for dial-up users.

IP Setops were all the rage at the International Broadcast Conference:

The BBC plans to test on-demand programmig using high-speed internet access, and an interactive Media Player or iMP.

The Guardian says the Beeb will launch a public trial of iMP, which allows viewers to download any show from the previous week that they may have missed.

Telecom giants such as BT and France Telecom will also launch new initiatives to link the internet to the TV through a set-top box later this year. A company called HomeChoice already offers a similar service in the London area. HomeChoice programming is available via 1Mb, 2Mb or 4Mb broadband connections with up to 80 digital TV and radio channels

The BBC already has an interactive channel (BBCi), so online viewers should be ahead of the game in the UK. Executives reason that whether they view content on their computer screen, web-connected TV or a portable device, they’ll want to access BBC shows “any time, any place, anywhere”.

The $99 Freeview settop box provides a dozen digital television channels and over 20 digital radio channels over the air — absolutely free — in the UK. It’s paid for with advertising. As competition has increased, from multichannel TV and now the web, the BBC wants to widen the distribution of its content in order to make a convincing argument for the licence fee.

Maybe what the triple play really needs a shared MPLS backbone. Like Utah’s Utopia fiber network.

A non-profit coop might allow competiting carriers, ISPs, and public service users to deliver better services, faster, at lower costs. What’s wrong with sharing? Like cellular’s virtual network operators, this approach doesn’t preclude competitors — it welcomes them. Phone companies will invest hundreds of millions — billions really — on speculative triple play ventures — and may go broke in the process. Education, public services and private industry may suffer as a result.

Can you say Enron?

Reducing capital costs is a good bet. The fiber’s already there. In Portland, the non-profit Northwest Access Exchange might run it. Minerva’s Open Service Provider Network keeps network ownership separate from the service providers, enabling several competing service providers to simultaneously offer Triple Play services.

If one $5K, 5.8 Ghz WiMax AP can deliver 500 subs every mile or so, that’s $10/pop. No DSL costs. An operator’s cost might be $100/user + $10/month. WiMax clients will probably run $200-$50. With 3-4 WISPs sharing infrastructure, risks are reduced. Roaming and other services can be shared. Triple play.

Will 60 Ghz radios like OGRE with digital beamforming obsolete FTTH in 5 years? Do you feel lucky? Well do you, punk?

DailyWireless has more on the BBC’s Mobile Video, Interactive TV News, ABC News Now Looks to Future, The Free Triple Play, IP-TV Settops, Mobile TV Expands, Verizon Does Cellular TV, Video Search, Big Media Mobilizes, U.S. Gets MobileTV via DVB-H, Samsung’s Video over DSL and The Man Who Invented Television.

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