FCC Bans Exclusive MDU TV Agreements

The U.S. Federal Communications Commission (FCC) has banned agreements that provide exclusive access for TV services to multiple dwelling units (MDUs) that include apartment buildings, condominiums, and other types of real estate development.

The FCC found that:

• Exclusivity clauses harm competition and broadband deployment and can insulate the incumbent from any need to improve its service.
• Exclusivity clauses are widespread in agreements between TV providers and MDU owners.
• Cable operators have increased the use of exclusivity clauses in their agreements with MDU owners with the entry of the U.S. telcos into the video marketplace.
• the use of exclusivity clauses in contracts for the provision of TV services to MDUs constitutes unfair competition or practices.

The FCC will also take a look at whether it should exclusivity clauses entered into by satellite providers, private cable operators, and other TV providers who are not subject to today's ruling. It will also considere whether it should prohibit exclusive marketing and bulk billing arrangements.

This is good for the telcos offering IPTV services in the U.S. The cable companies have been using these agreements to lock the telcos out. This will no longer be possible.

FastWeb Reemphasizing IPTV

FastWeb, the Swisscom competitive telecom subsidiary in Italy, put renewed emphasis on its IPTV offering in its 3Q07 presentation. In September it reduced from 15 to 6 residential offerings. These packages bring its pricing in line with or below Telecom Italia. With this new offering, 88 percent of its new subscribers added in 3Q07 were signed in September. It stated that October is continuing strongly.

FastWeb believes that their are clear opportunities for IPTV in Italy because there is no cable there and limited satellite and digital terrestrial penetration. The company expects that IPTV will become the single most important differentiating factor in the fixed market.

FastWeb points to its seven years experience offering IPTV services as a significant advantage. It believes that has the best prices in Italy. It found that the take up of IPTV increased in September to 25 percent vs. 20 percent average in the previous 12 months.

FastWeb added 56 thousand broadband subscribers in 3Q07, giving it a total of 1.251 million. It stated that 82 percent of these were residential subscribers. It stated that it experienced significant pressure from a Telecom Italia win back campaign.

I estimate that it added 10 thousand IPTV subscribers in 3Q07. This rate should increase significantly based on the emphasis that it is now putting on IPTV.

This is a significant change for FastWeb. It has been emphasizing its enterprise business in its presentations for the last couple of years. It had just completed a national fiber network that enabled it to compete in the enterprise market.

It looks like Telecom Italia has become very competitive on the broadband market and caused FastWeb to go back and put new focus on the market that established it in the first place.

Arcor/Vodafone Introduces IPTV in Germany

Germany's Arcor has commenced the wide-scale market introduction of its IPTV package. Arcor is a Vodafone subsidiary. Arcor-Digital TV is now available in 51 cities and towns.

The ADSL-based service includes more than 50 TV channels in the basic package along with more than 60 pay channels.

The basic package is available for EUR 9.95 per month. Premium bouquets with sport, entertainment and foreign channels can be subscribed to for an extra fee of between EUR 5.95 and EUR 22.95 per month.

There is also on demand library of more than 500 films, series, documentaries, music concerts, children’s programmes and erotic films available from EUR 1.49 per title. Also included is an electronic programme guide. The service provides a time-shift restart function which allows viewers to restart a program from the beginning. The function is currently offered by Yavido Clips, BBC World and Bloomberg TV, with further broadcasters expected to follow.

The IPTV compatible set-top-box, which connects the television set with the ADSL line, costs EUR 49.95 plus EUR 9.95 postage. An additional one-off set-up fee of EUR 49.95 is also required.

Arcor-Digital TV is marketed as a triple play offering in connection with Internet access and a telephone line. An ADSL connection with a data rate of at least 6 Mbit/s is a prerequisite. The Internet and telephone package with this capacity currently costs EUR 34.95 per month including flat rates for telephony and Internet.

The IPTV service was first introduced in May as a test run in Kassel near Frankfurt.

IPTV is becoming a required element of a broadband service in Germany, as it as become in France.

Chunghwa Adds 24k IPTV Subscribers (corrected)

Chunghwa Telecom in Taiwan added 24 thousand IPTV subscribers in 3Q07 giving it a total of 358 thousand subscribers. This is an increase of 109 thousand since the beginning of 2007 and 153 thousand in the previous 12 months.

It stated that it has 4,500 hours per month of video on content. (correction) Its Major League Baseball gaming service had 1.1 million hits across its IPTV, 3G mobile, and Internet platforms.

Chunghwa plans to provide HD coverage of the Beijing Olympics in 2008.

Chunghwa is still adding subscribers at the rate of 150 thousand per year. It will hit that level in 2007 if it adds the same number of subscriber in 4Q07 that it added in 4Q06. It should add significantly more subscribers in 2008 based on its impending island wide service roll out.

Irdeto to Focus on Emerging Markets

Irdeto, the Dutch content security company, will shift it focus away from North America and Europe and toward emerging markets. As part of this plan, its CEO will move from its Netherlands headquarters to its office in Beijing. He will continue to run the company from there.

Our recent report, Opportunities in TelcoTV, shows that nearly all of the major telcos in Europe and North America have selected their IPTV suppliers, so that while acquiring new business in these markets is still possible, it will not be easy. The major Asian markets such as India and China are the major IPTV opportunities that are still open today.

Verizon adds 202K FiOS TV Subscribers in Q3

Verizon added 202 thousand new subscribers to its FiOS TV IPTV service, giving it a total of 717 thousand subscribers at the end of 3Q07. It also added 229 thousand FiOS broadband subscribers, giving it a total of 1.3 million.

Verizon is continuing to do well with its FiOS TV service and should easily exceed 700 thousand subscribers by the end of 2007. this will be an increase of 500 thousand subscribers over the year.

This should be good news for ATT, which added about 75 thousand IPTV subscribers in the quarter. It shows that there is strong potential for IPTV services in the U.S.

Free in France adds 100K IPTV Subscribers

In 3Q07, Free, the number three competitive carrier in France, added 141 broadband subscribers bringing its total to 2.767 million. It is forecasting that it will reach 2.8 million broadband subscribers by the end of 2007 and 4 million by 2010. It also expects to have 8 offices equipped to have FTTH services available to 241 thousand homes by the end of 2007.

The addition of 141 thousand broadband users means that Free added at least 100 thousand subscribers that are capable of accessing its IPTV services, giving it a total of 2.1 million IPTV capable subscribers.

Free provides the capability to receive basic IPTV services to nearly all of its unbundled subscribers; however, not all of them use the service. Consequently, the term "IPTV capable" is used here.

Microsoft Chasing Smaller Providers

Microsoft is starting to go after the smaller Telcos in the U.S. It has licensed its software to be used with Calix access systems as well as Alcatel access systems. Calix's primary market is the Tier 2 and Tier 3 telcos in the U.S. The two companies are in a trial together but have announced where.

Since Microsft has (or had) relationships with Bell Canada, ATT, and Verizon, except for Qwest there are not too many large opportunities left. The only place for Microsoft to go in North America is to these small telcos. There are two or three of them that are fairly large, but even these are much smaller than ATT, Qwest, and Verizon. They are also much more fragmented, since they tend to be collections of small, discontiguous operations.

180Squared told me that its strategy is to provide applications and other services that will supplement Microsoft in these markets. This approach will require Microsoft to move closer to a shrink wrap approach and will require different approaches to product support.

Korea Telecom Has 148 K IPTV Subscribers

Korea Telecom announced that it had 148,353 IPTV subscribers to its MegaTV service at the end of September 2007. This is up from 55,254 subscribers at the end of June. It is forecasting that it will have 300 thousand subscribers by the end of 2007.

Korea Telecom stated that its MegaTV subscribers are highly satisfied with both content and quality. It plans to strengthen its children and educational content. Its service is using set-top boxes from Samsung, Humax, and Dasan Networks for this service.

This is good progress; however I am still confused about the regulatory situation in Korea. The last I heard, the regulatory issues there are still a long way from being settled. If there is anybody reading this that has first hand knowledge of this, I would appreciate a comment telling us all what is going on.

France Telecom Exceeds 1M IPTV Subscribers

At the end of 3Q07, France Telecom had 1.017 million IPTV subscribers across all of its operations. This was an increase of 145 thousand over the 872 thousand that it had at the end of 2Q07. These numbers include France, Spain, and Poland.

In France, the company had 975 thousand IPTV subscribers. This was an increase of 138 thousand over the 837 thousand that it had at the end of 2Q07. Over the previous 12 months it added 554 thousand subscribers in France and 591 thousand across all operations.

France Telecom is continuing to make good progress and has probably already passed 1 million IPTV subscribers in France already.

IPTV as a Survival Strategy

Light Reading published and article that summarizes a panel discussion at TelcoTV this week. In this discussion small U.S. telcos described IPTV as a survival strategy in the face of declining demand for fixed line services. The fact that IPTV helps these companies retain customers has become an important factor in their business case.

The loss of fixed line business is a factor for telcos globally. This is a major reason why more than 500 of these companies are looking to IPTV today.

Corbina Offering IPTV in Moscow

Corbina is a subsidiary of Golden Telecom, which is a facilities based telecom service provider in the Russian Federation that provides service using a Fiber to the Building (FTTB) strategy. The two companies had 383 thousand broadband subscribers at the end of September 2007. The companys' networks are expected to cover 11.6 million households in 24 cities by the end of 2007.

In 2Q07 Golden Telecom began testing IPTV services based on Corbina Telecom's infrastructure. Its IPTV services include more than 100 channels and such services as video on demand, time shift TV, and Personal Video Recorder ("PVR").

The IPTV services are currently available to Corbina's Moscow broadband subscribers. In the next 6 months, the services will be available in more than 20 regions including St.-Petersburg, Rostov-on-Don, Saratov, Nizhniy Novgorod and the Moscow Region.

The company estimates that approximately 25-30% of FTTB customers will subscribe to IPTV services by 2009.

The Russian Federation appears to be emerging as a strong IPTV market. This fiber based infrastructure appears to be well suited to the service.

ATT Hits 126,000 IPTV Subscribers

ATT announced that it had 126 thousand U-verse IPTV subscribers at the end of September 2007, which is up from 51 thousand at the end of June. It had previously announced that it had 100 thousand subscribers in early September.

The company also stated that its weekly install rate was "approaching 10,000 at the end of 3Q07, up from 5,500 three months earlier". It stated that the service was available in 33 markets across the U.S.

ATT's U-verse service is clearly making progress, but it is not yet achieving the same rates as Verizon. At the same point in its history, Verizon had about 200 thousand IPTV subscribers.

ATT's installation rate in September appears to be about 7,000 to 7,500 per week. This is a nice increase over the quarter, but the company will have to accelerate its rate of increase to achieve the 10,000 rate that it has forecast for the end of the year.

FCC Considering Cable Spectrum Squeeze

The FCC is considering two proposals that will affect the demand on the spectrum available in cable HFC networks in the U.S.

The first will provided some relief for smaller cable systems. The National Cable Television Association (NCTA) has requested that the FCC provide a streamlined process for small systems as well as systems with limited spectrum to get waivers from the dual carriage requirement when the U.S. goes digital in February 2009. The dual carriage requirement requires that cable companies provide all must carry channels in both analog and digital formats. This may be difficult for systems with limited spectrum.

On the other hand the FCC is considering must carry rules that will require cable companies to carry the full digital multiplex again after the U.S. goes digital in February 2009. The over the air channels are using their spectrum to provide multiple digital channels (called a multiplex). The FCC is encouraging over the air broadcasters to create these multiplexes and believes that carriage over cable systems will be necessary for these new digital channels to have access to the market since most people get their TV from cable systems.

Both of these issues show that the U.S. cable companies have significant pressures on the spectrum in their HFC networks. As I have discussed elsewhere, they have a number of ways to relieve this pressure, but it is going to be a continuing problem for them.

Integra5 Survey Shows Service Improves Stickiness

In a recent survey of 3,500 residential subscribers of Comporium, a South Carolina-based IPTV provider, Integra5 found that TV Caller ID plays a significant role in subscriber retention. Integra5 is a software company that provides services on IPTV and cable networks that include TV Caller ID.

One group of subscribers surveyed have been using TV Calling ID already with 70% using the service for more than one year. This group was compared with feedback from another group of subscribers who do not receive the service.

Key survey highlights include:

• 25% state TV Caller ID is a "main reason” they stay with Comporium for their television, high speed data and phone services
• 30% more likely than non-subscribers to rate Comporium as “great”
• 78% said they like TV Caller ID as much as other types of popular services, specifically HDTV, while 71% reported the same for DVR

Respondents ranked interest in future real-time converged communications and content services that incorporate advanced interactivity, personalization and user management capabilities. Below are the top five, in order of interest:

1. 90% - Ability to manage which TVs and PCs display Caller ID
2. 81% - Personalization features, such as the ability to add pictures and photos to TV and PC Caller ID and to a network address book
3. 81% - Content alerts, which incorporate RSS and Web-based technology to display banners with local, national and international news, weather, sports and other information on TVs and PCs
4. 80% - “Click-to-call,” which enables users to place calls from the TV network address book, and call/voicemail logs via the TV remote control
5. 77% - Voicemail alerts and playback, which notify users – via TV/PC banner alerts – of landline or mobile phone voice mails. Users can also view a voicemail log and play back voice mails on their TVs/PCs

On average, TV Caller ID subscribers were 30% more likely than non-users to rate future converged services with the highest score of “like very much.”

As service providers begin to leverage TVs, PCs and mobile phones to provide consumers with a seamless, multi-device experience, the TV is the most popular and is buoyed by new services such as HDTV, VOD and interactive programming guides.

• Nearly 70% of respondents chose the TV as their preferred device for
• Over 40% said they would like to receive services on both TVs and PCs

Comporium’s subscribers rated IPTV Caller ID services highly:

• 82% rate the service as either “very good” or “great”
• 86% have shown or told friends and neighbors about it
• 94% leave it active all the time, even though it’s possible to disable it

Although Comporium offers the service free as part of their digital cable and phone bundle, over 40% said they would pay for TV Caller ID if they moved to another area where the operator charged for it; of these, 90% would pay at least $1 per month, 70% at least $2 per month and over 50% at least $3 per month

I have been hearing that Caller ID on the TV screen is a popular service ever since I started following this market five years ago. This survey confirms that. People really like getting information on the screen that tells them whether they can ignore or should answer an incoming call.

nTelos Introduces Microsoft Media Room IPTV

nTelos, a U.S. independent telco serving a large area in Virginia, has introduced an IPTV service based on Microsoft's Media Room software. This service will be available in the parts of the state where nTeleos offers FTTH services.

The nTelos IPTV service includes 250 broadcast channels including 18 HD channels. The service includes two set-top boxes, one with DVR capabilities.

nTelos has 45 thousand access lines in its incumbent territory and 48 thousand access lines in its competitive territory. It also has a total of 19 thousand broadband connections.

This is interesting because it is Microsoft's first incursion into the U.S. small telco market. Up to now Microsoft has focused on the large incumbent carriers. It will be interesting to see if this is a unique event or a trend.

Optibase Focusing on Asia

I had an interview with Optibase to discuss its recent announcement that its encoders are being included in the Bharti Airtel IPTV service in India. Optibase is working with UTStarcom at Bharti. UTStarcom is supplying the middleweare, the video on demand systems, the set-top boxes, and the system integration.



In addition to Bharti Airtel, Optibase is included in the IPTV deployments in India by Aksh and Time Broadband. Both of these companies have been licensed by MTNL to offer IPTV services over MTNL's network.

UTStarcom is working with three major integrators and IPTV suppliers UTStarcom, ZTE, and Huawei. UTStarcom has a strong position in the IPTV markets in China and India. ZTE also has a strong position in the IPTV market in China. Huawei is the largest Chinese systems company and has a number of IPTV deployments Asia, the Russian Federation, and Africa.

Optibase expects that its relationships with UTStarcom, Huawei, and ZTE will provide it with a strong entry into the emerging IPTV market in China. Optibase has started to work on AVS products so that it can support the Chinese video compression standard.

Optibase is also making strong sales efforts into Eastern Europe and the Russian Federation. It is seeing a lot of RFPs from Eastern European service providers at this time.

Video encoders are generally acquired early in deployment of an IPTV service. A smaller service provider will need only a single headend system and will fully populate it with encoders before the service goes commercial. A large country will typically add additional headends as the IPTV service is expanded to support additional metropolitan areas.

Optibase's strategy of focusing on India, China, and Eastern Europe is sound. This where the new IPTV services are are being deployed today. The growth potential in both India and China is very strong. Optibase can expect significant continuing business from these two companies over several years as their IPTV services expand.

Proposal for European FCC

Light Reading published an article that describes the proposal that European Commissioner Viviane Reding has made for a Europe wide telecom regulator modeled on the FCC. This new authority would have a small, but permanent staff and be accountable to the European Parliament.

This new agency is designed to prevent national regulators and governments from diverging from European telecom rules when it suits them. The highest-profile example of this is Germany's new telecom law, which allows a regulatory holiday for Deutsche Telekom's VDSL network that it is deploying to support its IPTV service.

Reding also wants to give national regulators the power to split up incumbent operators into infrastructure and service companies when such a move is justified. This is called "functional" or "structural separation," whereby an operator's fixed-line access network business is split off into a separate legal entity.

This is a significant proposal that will affect carriers plans for deploying VDSL and FTTH networks and, consequently, IPTV. Under Reding's proposal this change would not go into effect until 2010, so it will not affect IPTV deployments in the short run.

Telecom Italia France Starts FTTH Trial

Telecom Italia France will test fiber broadband in the 8th and 10th districts of Paris in the next few months. The company's Alice France subsidiary will connect slightly under 500 buildings to reach a target of 2,000 to 3,000 customers for the pilot service. The cost of the project will run in the low millions of euros". Alice France had 87,000 ADSL customers at the end of June, including 59,000 who took up IPTV service. Alice aims to gauge consumer interest in service over 50 Mbps.

Telecom Italia put its toe into the FTTH waters. France Telecom, Free, and Neuf Cegetel in France have all committed to FTTH deployments already. This is a necessary step for Telecom Italia to keep up with its competitors.

BT Promoting ShapeShifted TV

BT is promoting what it calls New Media 2 (NM2), which permits viewers to change the story line. The idea is that producers will shoot multiple story lines, which the viewers can select and make the viewing experience more personal. The NM2 website provides more information on ShapeShifting.

BT has conducted a number of NM2 trials with broadcasters but has no firm plans to commercialise NM2 as part of BT’s own IPTV BT Vision. It is considering various ways to monetize the service, including pay-per-view, subscription and advertising-funded models.

The first ShapeShifted TV program was aired in Finland in December 2006. Viewers were able to affect the drama between two unlikely lovers by sending SMS text messages. Viewers saw their SMS text messages on the screen and heard the characters respond to their texts. Accidental Lovers was run four times in total, showing twelve different evolutions of the love affair – each of them different, so if viewers did not get what the wished for the first time, they could try again. News, drama, and documentary pilots using the same technology have also been tested.

This is an interesting form of interactivity that can enhance the IPTV experience. Clearly a two-way IPTV network can provide a higher level of interactivity than using SMS. It should even be possible to use it in conjunction with an on demand program to provide a purely personal rather than shared experience.

Motorola's E-CWDM Extends Cable's HFC

A number of tools have emerged to help the cable companies extend the life of their Hybrid Fiber Coax (HFC) networks in the face of strong new competition from FTTH and FTTN networks. The basic problem the cable companies have is to support more HD broadcast services at the same time as they are expanding both their SD and HD narrowcast services. (A narrowcast service is one such as video on demand that delivers content to a single viewer.)

A cable HFC network uses fiber to connect a hub office to an optical node that typically connects to about 500 homes today. One of the ways that a cable company can do this is to reduce the homes served by an optical node. They can do this by stacking up optical nodes. They can use four optical nodes, for instance, connected by four fibers and supporting 125 subscribers each. Motorola offers a modular approach so that the four fibers can be connected to a single box which then splits the bandwidth to four separate groups of 125 homes each.

Motorola's new E-CWDM system uses coarse wave division multiplexing that uses five wave lengths to carry the equivalent of five separate fibers to the optical node. If all five wavelengths are used, then each wavelength can then serve a separate group of 100 homes.

The advantage of ths approach is that it conserves fibers. Often the cable company does not have four or five pairs of fibers running to each optical node. Even if the fibers are there, the cable company may prefer to reserve them for business services, for example.

The E-CWDM optical node is about twice as expensive as an optical node that can connect to an equivalent number of fibers. However, this is much less expensive than running new fiber, so it is an economical approach in many cases.

E-CWDM will be useful to cable companies as a way to extend the life of their HFC network. They have other tools that they can use as well such as expending the spectrum used, switched digital, IPTV, and cable PON.

As useful as these tools will be, however, they will not eliminate the need for cable companies to move to a FTTH architecture in the future in order to match strengthening telco competition.

KPN Battling for the Home

Nokia Siemens forwarded a presentation to me that KPN made at the Broadband World Forum in Berlin last week. It expects that in 2010 70 percent of the homes in The Netherlands will have one access lines.

KPN's challenge is to make that a KPN line rather than a cable line. Its challenge is that cable has 95 percent coverage with 85 percent market share. KPN's own IPTV has 50 percent coverage today with only 1 percent market share.

Satellite and digital terrestrial are minor factors today. Satellite has 100 percent coverage and 10 percent market share in The Netherlands, while digital terrestrial has 65 percent coverage and 4 percent market share.

KPN introduced its Mine IPTV service in May 2006 as a premium brand. It found that people are reluctant to switch and do not understand what IPTV offers them. They also do not recognize KPN as a TV provider. It also found that IPTV is a difficult service to offer and that the entire company has to focus on it to make it successful.

KPN offers two pages. It offers a basic package for 6.95 euros per months that it positions for people that are not interested in sophisticated features but includes digital terrestrial. It offers a free trial with this basic service.

KPN also offers a premium interactive service for 9.95 euros per month. This service includes a set-top box with a hard disk and up to three digital terrestrial receivers. This service offers:

• 50 broadcast TV channels
• 80 broadcast radio channels
• Catchup TV for 4 channels
• EPG that shows one week ahead
• Home recording up to 100 hours
• The ability to pause live TV

KPN's premium packages include 25 additional channels, 350 movies on demand, Dutch and foreign TV series on demand, four Premier League soccer channels, and a gay lifestyle broadcast package.

KPN's strategy is to expand the coverage of its IPTV service, provide attractive bundles, focus their sales force on the offering, and continue to develop the service to keep it competitive.

KPN is in a tough market with strong cable competition. This presentation shows that it is addressing its challenges and understands the strategic importance of IPTV.

Telenor to Offer FTTH and IPTV in 2008

Telenor, the incumbent carrier in Norway, stated that it will roll out IPTV service in 2008. There are rumors that Telenor will use Thomson's middleware software, but there is no confirmation at this time.

Telenor has also has been mandated to provide broadband access to 100 percent of the 2 million homes in the country. It plans to use a combination GPON, VDSL, ADSL, and WiMAX to reach all households. It plans to rollout GPON in the cities to counter strong competition from competitive FTTH providers. It plans to install Alcatel-Lucent VDSL capable DSLAMs in areas where fiber is not appropriate. It had been using Nokia DSLAMs, but apparently is dissatisfied with their performance. It is using Airspan for its WiMAX deployment, which has already begun.

Telenor is one of the last Western European incumbents to commit to IPTV. Its fiber based competitors have been delivering IPTV service for several years already so Telenor has a lot of catching up to do.

AVS Creating Lockout in China

Products from UTStarcom, ZTE, Huawei and Alcatel Shanghai Bell have been checked and accepted following tests carried out in Dalian in October 2007. The tests are targeting the application of products using home-developed AVS video compression technology on China Netcom's pilot AVS-IPTV system, which has operated steadily for more than six months.
Overseas equipment providers did not join in the tests, because they mainly support foreign standards, such as MEPG4 and H.264.

Apparently China Netcom will only adopt the AVS video compression standard in its IPTV deployment if the tests in Dalian are successful, aimed at avoiding high patent fees from using foreign standards. If equipment providers do not adopt AVS, they will lose the opportunity in China's market.

Currently China Telecom has not standardized on AVS and is using MPEG-4. Using AVS will be a requirement for the headends, the set-top boxes, and the video on demand systems in particular. If AVS takes hold in China, other companies will adopt it in order to gain access to this very large IPTV market.

ATIS DRM Webinar

The U.S. standards group will host a webinar on Digital Rights Management. It will examine issues surrounding deploying DRM technology and how to measure its impact on QoE end-to-end. As defined by ATIS' IPTV DRM Interoperability Requirements.

The webinar presentation will include:

• IPTV, DRM and QoE requirements from a network solutions provider perspective
• Developing standards for DRM - ATIS IPTV Interoperability Forum (IIF)

Moderator:

• John F. Bernhards, Vice President, Marketing & Public Relations, ATIS

Speakers include:

• Dr. Stefan Winkler, Principal Technologist at Symmetricom's QoE Assurance Division
• Bob Kulakowski, Chief Technology Officer at Verimatrix, Inc.

Thursday, October 18, 20071:00 p.m. - 2:00 p.m. EDT/10:00 a.m. - 11:00 a.m. PDT

Register at: http://qoe.symmetricom.com/atis2

DRM is a key issue for IPTV systems and the standards orientation in this webinar should make it worthwhile.

Belgacom to deploy Alcatel-Lucent VDSL

Belgacom will deploy 14 thousand VDSL nodes using Alcatel systems. It will use Alcatel-Lucent VDSL systems to support HD services starting in 2008. Belgacom had 190 thousand IPTV subscribers at the end of June 2007.

This shows that HD is about to become an important factor in Europe and will cause service providers to upgrade their networks, often to VDSL. The shorter loop lengths in Europe make VDSL a better approach than it is in the U.S.

Neuf Cegetel Fiber Deployment

Neuf Cegetel has initiated a FTTH deployment. It will use Alcatel-Lucent PON systems and Ericsson Redback access routers to support this network.

Neuf Cegetel is now joining France Telecom and Free in starting FTTH efforts in France. Just another good reason to move to Paris!

Sony PS3 IPTV Set-top Box

It has been reported that Korea Telecom will offer the Sony Playstation 3 game console as a set-top box for its IPTV service.

This is a response to Microsoft using its Xbox game console as a Mediaroom set-top box. It makes a lot of sense for both companies, especially where there are a lot of serious gamers.

Belgacom Retaining Nokia Siemens Middleware

Belgacom has extended its contract with Nokia Siemens for middleware software and integration services for another three years. Nokia Siemens will also provide set-top boxes to Belgacom to support HD services using MPEG-4 compression. Nokia Siemens has been providing these services to Belgacom since 2004. Belgacom had 191 thousand IPTV subscribers at the end of June 2007.

This settles this issue for Nokia Siemens. We had picked up rumors that Belgacom would move to the Alcatel-Lucent MiView middleware software. Clearly, this has not come to pass.

Telefonica Tuning Up Imagenio IPTV

Telefonica of Spain will add 40 more broadcast channels and a new NPVR service starting in November 2007. The 40 new channels will bring its total t0 160 and include summaries of the Spanish Football League, children' channels, culture, entertainment as well as channels for ex pats living in Spain.

The NPVR service will be called "Past TV" and will provide access to broadcasts from the previous week. It will include advertisements; however, viewers will be able to fast forward through them. It will also offer a set-top box with PVR capability that will be able to store up to 100 hours.

The Imagenio IPTV service will be part of a triple play service over a 10 Mbps broadband link at €48.90 per month.

This upgrade of the Imagenio IPTV service should generate a significant acceleration its growth as long as it is supported with a strong marketing program.

180Squared Providng Microsoft Applications

A new company called 180Squared provides applications for Microsoft's Mediaroom that include:

• Device activation
• Billing
• Service assurance
• On screen Caller ID

180Squared was formed by former Microsoft people who were part of the Mediaroom project.

Our recent report Opportunities in IPTV forecasts that Microsoft will become the leading IPTV middleware and video on demand system provider, which will create a large market for 180Squared. The question I wonder about is how many of the large providers that have selected Microsoft are likely to be interested in 180Squared's products. However, this market is still in a very early stage, so that there is a lot of opportunity for a smart startup.

Interview with Oki Electric about Japanese IPTV Market

I recently had an interview with Oki Electric in Japan. Oki has been active in the Japanese IPTV market supporting NTT’s various efforts. Oki explained to me that NTT has set up three separate IPTV services

• 4th MEDIA which offers broadcast and on demand content.
• OCN Theater which had only offered on demand content, but now is including broadcast content to its service.
• On Demand TV which offers broadcast content and on demand content.

Oki said that NTT has a plan to restructure its IPTV for NGN, the next-generation network. These separate services evolved this way due to separate efforts in NTT group companies as well as due to regulatory restrictions that have made it difficult for NTT to enter the IPTV market.

Oki provides video on demand servers to 4th MEDIA. Oki also provides middleware and content security systems to 4th Media.

Oki is also entering the IPTV set-top box market. It will start shipping an IPTV set-top box to trials in China before the end of 2007.

The IPTV market has been quite complex in Japan. NTT has had to take several approaches to overcome regulatory obstacles. It appears that this complexity may reduce over time.

Chunghwa Telecom Interview

I had an interview with Chunghwa Telecom. Chunghwa now has 360 thousand IPTV subscribers for its Multimedia On Demand (MOD) service that it offers in Taipei and the other two largest cities in Taiwan. It expects its IPTV network to receive a government license before the end of 2007. With that license it will be able to deploy IPTV across the entire island of Taiwan. This license will also provide Chunghwa access to additional TV channels and other content that will bring its service up to the same level as the cable companies in Taiwan.

Chunghwa is currently conducting trials of HD content that it expects to introduce in 2008. The cable companies in Taiwan are not able to offer HD content, so this will give Chunghwa a significant competitive advantage. It believes that there will be strong interest in HD in Taiwan.

Chunghwa’s karaoke on demand and game offerings are also popular. Many subscribers use its karaoke on demand service. It offers a finger-guessing game that was developed on Japan using adult contents. The Major League Baseball game is also popular because many people are following Chien-Ming Wang, who plays for the New York Yankees.

Chunghwa’s IPTV service is based on the following systems:

• Alcatel access systems along with its installed base of ECI systems for ADSL-2+.
• It will soon start deploying EPON based on Sumitomo systems
• Video headend from Ericsson’s Tandberg TV
• Video on demand from Alcatel
• Middleware is Alcatel’s OMP system
• Content security from Widevine
• Set-top boxes form Foxconn and Hwacom

Chunghwa’s technology base has been evolving since it introduced its service. It used Orca middleware and Pace set-top boxes for its first 40 thousand subscribers and then switched to Alcatel-Lucent’s OMP and both Foxconn and Hwacom set-top boxes. Moving its subscribers from Orca and Pace to its current systems has been difficult and is just now completing.

Chunghwa expects to continue its evolution and is currently considering converting to the Microsoft Media Room IPTV software. There was an announcement in May of a broad joint relationship between Microsoft and Chunghwa that included moving its MOD service to the Media Room.

Chunghwa is making good progress and it looks like its IPTV service should accelerate next year after it receives its certification. It is following a difficult technical path with all of these changes in technology, but it should continue to do well as long as it keeps its focus on providing the best service to its customers.