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Telephone Companies Plan Major Video Services
Competition from cable TV operators and pressures to derive more revenue from fixed lines are encouraging leading telephone companies (telcos) to adopt new technologies to move beyond the bounds of offering only voice and digital subscriber line (DSL) broadband Internet access to include digital TV services over DSL and fiber networks. Improvements in the data rates and reach of DSL will help telcos extend to more customers with the right amount of bandwidth. At the same time, new video compression systems are reducing the amount of bandwidth necessary to deliver quality television services over multiple video streams. New video compression schemes also will make it possible to deliver high-definition streams over DSL, as the once necessary 15-Mbps bit rate needed for a single HDTV stream shrinks to eight Mbps. Some telcos are eliminating the bandwidth issue by running optical fiber lines directly to the home. In the U.S., BellSouth, AT&T, and Verizon are laying fiber lines to many of their territorial neighborhoods. In some cases the fiber lines run right up to each premise – fiber to the premise or fiber to the home (FTTP/FTTH). In other cases, fiber lines run to centralized nodes, from where twisted pair copper lines run the rest of the way to the home. In some systems employing FTTP runs, telcos are opting to deliver video in a method similar to that used by digital cable services. Other systems require the use of Internet Protocol TV (IPTV) systems dependent on DSL pathways. The IPTV approach has some disadvantages. Due to the bandwidth constraints, only the requested channel is sent over the service at one time, making channel changing slow. The cable approach allows making all channels available at one time, which speeds up the channel changing and allows for picture-in-picture applications. The two largest telcos, Verizon and AT&T, are getting close to a commercial launch of their TV services, but have been slowed by franchise license regulations or the lack thereof. In early 2006, Congress was beginning work on legislation that would treat telco video operations at least temporarily as national multi-channel services, without being subject to many of the local regulatory controls and fees applied to cable TV operations. The US telcos that offer TV today either have received franchise licenses or operate as an “open video system” (OVS). Currently none of the telcos offer HD video streams but plan to as new H.264 compression equipment and set-top boxes become available. Such providers as AT&T and Verizon have said they plan to use set-top box equipment that will be interoperable with each other, meaning a set-top box for one service will work on another service’s system. This could open the doors to retailing telco video equipment alongside equipment for satellite TV services, and in some markets, cable TV services. Meanwhile, most telcos are expected to continue to employ satellite TV packages to offer TV services to customers living in neighborhoods that can not be reached by new fiber or DSL lines. According to estimates from market research firm In-Stat, telephone companies are expected to offer their own IPTV services to approximately 3.6 million U.S. subscribers by the end of 2009. According to a 2006 Kagan Research study, telco TV services will garner approximately six million subscribers, representing five percent of the multi-channel TV marketplace, by 2010. By the end of 2006, Kagan forecasts incumbent phone operators passing some 26.3 million homes with fiber, advancing to 55 million homes by 2010. By that time, Kagan expects roughly three-quarters, or 40 million homes to be video-enabled, with a headend in place and video service being marketed. Verizon Launches TV Services
In 2005 Verizon teamed with Microsoft to bring a TV service called FiOS to its offerings. The service uses Microsoft’s electronic programming guide (EPG) operating on Motorola digital set-top boxes. Verizon, which has been laying FTTP lines, also will use the QAM modulation scheme used by cable TV operators to deliver digital video. Currently, FiOS delivers three levels of broadband service to consumers: 5 Mbps, 15 Mbps and 30 Mbps. Although the company is using a QAM/IP hybrid system for video over its FiOS network, it is expected to transition the video system to IP when it begins deploying new GPON fiber lines – passive optical network (PON) used in a FTTP configuration in which unpowered optical splitters are used to enable a single optical fiber to serve multiple premises. In 2005, the company added FTTP services in Keller, Texas, with plans to add additional markets in which it has cable franchise licenses, including Herndon, Va.; Beaumont, Calif.; Wyle, Sachse and Westlake, Texas; and Temple Terrace, Fla. Verizon plans to deploy the FiOS network in 15 of the 29 states it serves, including Florida, Connecticut, Texas, New York, Virginia, Massachusetts, New Hampshire, Indiana, Rhode Island, and New Jersey. The company has said it plans to reach two million homes per year with the network. The FiOS TV service will be all-digital and is slated to carry more than 300 titles including more than 20 HDTV channels and 1,800 video-on-demand titles. Verizon will bundle the TV service with high-speed Internet at 5 Mbps upstream/2 Mbps down or 15 Mbps upstream/2 Mbps down. SBC Launches U-Verse Service
SBC, (now AT&T), was scheduled to launch in 2006 its U-Verse video service offering a suite of IP-based products and services. This includes integrated interactive TV, super high-speed Internet access and voice over IP telephony services. The service is enabled by a network of fiber to the node and fiber to the premise lines that are being installed under SBC’s Project Lightspeed initiative. This is forecast to reach approximately 18 million households across 13 states by mid 2008. SBC will use a very-high bit-rate Digital Subscriber Line 2 (VDSL2) – a technology that uses the existing infrastructure of copper wires – network to get 20–25Mbps to each home by placing fiber within 5,000 feet of homes. The company expects to deliver up to four video streams per home. For those homes not reached by fiber, SBC offers its HomeZone service that combines EchoStar’s DISH Network satellite TV service, and high-speed Internet access for video-on-demand through an integrated set-top box. The device will include digital video recording and video-on-demand capability and is being developed for SBC by 2Wire Inc. The box will use the Yahoo! Interface for Web browsing and e-mail and will enable DVR, photo viewing and music from Yahoo Internet Radio.
Qwest Offers ChoiceTV
Qwest is offering its ChoiceTV service using Very-high-bit-rate Digital Subscriber Lines (VDSL) to more than 400,000 households in the Phoenix area and Highlands Ranch, Colo. Motorola, which manufactures Qwest’s set-top box, is working with the telco to develop HDTV and DVR products that fit in with the current system. Bell South Readies Telco TV Service In 2005, Bell South had one million homes out of the 13.8 million in Bell South territory, connected to a fiber-to-the curb (FTTC) system, and has been adding new subscribers to the service at a rate of about 150,000 to 200,000 homes each year, according to market researcher In-Stat. Bell South planned to reach one-third of its customers with Asymmetric Digital Subscriber Line 2+ (ADSL2+) capability by the end of 2005, ramping up to 80 percent of customers after five years. BellSouth was testing Microsoft TV solutions, but In-stat predicted a commercial launch of telco TV services would not happen until 2007. In the meantime, the company has been delivering cable TV services to approximately 40,000 subscribers. Bell South also had 394,000 DirecTV subscribers taking a bundled services package as of June 2005. Smaller Telcos Step Up As the largest telephony companies begin IPTV plans with Microsoft, a number of smaller companies already are offering IPTV services. Consolidated Communications, the 15th-largest telco servicing areas of Illinois and Texas, offers video services running Myrio’s IPTV system, and has added on video-on-demand services similar to those offered by cable companies. |
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