I Goofed: SonaeCom Ericsson/Orca Correction

I requested clarification of what SonaeCom is doing with its IPTV middleware and received the following reply:

"Following the RFI process that we had in late April (where Orca also participated) two vendors requested us an onsite trial with no commitment from SonaeCom.

Our RFI process had the goal to evaluate the industry trends and roadmaps from the principal players in the market. We often conduct this RFI processes to understand the competitive advantage or disadvantage of the solutions that we are using independently of future intentions.

One of the vendors that requested us an on site trial was Ericsson."

Ericsson's press release is consistent with SonaeCom's statement above. I read too much into it. I apologize to all concerned for this error. I hope that it has not caused too much difficulty.

Zeugma Publishes Broadband Survey

Zeugma published the results of an IDC survey of U.S. 787 consumers that was conducted in August 2008. The survey produced the following conclusions:

On Premium Bandwidth Services:

• 94 percent of respondents saw value in broadband services that dynamically allocate premium bandwidth for certain types of traffic, such as video, VOIP, gaming, and telecommuter VPNs.
• 54 percent would actively seek to change service providers if another offered this service; 26 percent would be willing to pay additional fees for premium bandwidth services.

On Bandwidth Capping and Metering

• 81 percent do not like the idea of establishing a bandwidth cap and charging for use above the cap.
• 51 percent would try to change service providers if their provider imposed bandwidth caps. Interestingly, light and moderate users are even more opposed to capping and metering than are heavy users.
• 83 percent either do not know what a gigabyte is or have no idea how many they use.
• Only 5 percent said unequivocally that “those who use more should pay more

There is a growing gap between the broadband providers and their customers. The Telcos and the cable companies look at the issue from their perspective and are trying to limit traffic growth by punishing power users. This is bad business and policy. Why alienate your best customers?

There is a hidden agenda here. While these caps will not affect many data users, they significantly limit the amount of TV content that can be delivered over the top. The Telcos and cable companies want people to use their own TV services rather than viewing over the top content. This will become a major issue when it becomes apparent to people who want to watch Netflix or CinemaNow content regularly on their TV.

Alcatel-Lucent Targeted Ad System

Alcatel-Lucent introduced a targeted ad system based on its TPSDA 2.0 architecture that adds flash memory application storage to its access nodes, switches, and edge routers.

The targeted and interactive IPTV advertising system gives IPTV operators the ability to insert ads into TV programs that are aimed at particular communities of interest and even specific households. These ads are delivered using anonymous subscriber profiles based on service usage and demographic data authorized via an opt in process and retained in a protected repository by the service provider. The system incorporates subscriber data analysis and management capabilities to support ad targeting and audience measurement features to analyze the effectiveness and return on investment from particular campaigns.

The key elements in the system are:

• A targeted ad insertion splicer and targeted ad insertion agent integrated into its TPSDA
• 5930 Interactive Media Manager which enables interactive applications and advertising campaigns
• 8660 Datagridsuite, 8920 Service Quality Manager, and 5410 Presence Server which unify subscriber data and measure responses

Microsoft has introduced its own ad insertion system last month at IBC and has not announced any support for the Alcatel-Lucent system.

This looks like a comprehensive approach that will enhance its own MiView and OMP middleware packages. Service providers that adopt Alcatel-Lucent's TPSDA 2.0 architecture should be able use this system as well. I don't think that it is tightly coupled with the middleware.

Alcatel-Lucent TPSDA 2.0 Steals Microsoft's Thunder

Alcatel-Lucent has introduced IPTV application awareness into its Triple Play Services Delivery Architecture (TPSDA) 2.0. It will add flash storage to its edge routers, its switches, and its access nodes that will support fast channel change, packet retransmission, and targeted ad insertion.

• For fast channel change the last few minutes of every multicast channel will be stored in the network and the new channel will be started immediately, eliminating the latency that typically occurs today. Alcatel-Lucent said that HD channel change time will be reduced from several seconds to well under a second.
• For packet retransmission the network will store enough packets to immediately service the packet retransmission request.
• For ad insertion targeted ads will be stored and inserted in the network.

If the service provider uses Alcatel-Lucent access nodes, these functions can be provided in the access network. These functions can also be provided in the Alcatel-Lucent switches or edge routers for service providers using Alcatel-Lucent's TPSDA 2.0 architecture.

Alcatel-Lucent has also discussed plans to increase the amount of storage in these network elements in order to support rewind TV and video on demand delivery.

TPSDA 2.0 can support these functions for service providers using access nodes from other manufacturers by implementing them in the switches and edge routers.

Microsoft has not announced any support for these network capabilities.

This is an interesting announcement. It enables middleware companies other than Microsoft to support fast channel change. This includes both the Alcatel-Lucent MiView and OMP middleware as well as other middleware from companies such as Thomson and Orca. This approach to fast channel change will eliminate one of Microsoft's most competitive features.

This approach will give service providers new flexibility in managing the bandwidth demands from an IPTV service, especially as more and more on demand and personalized services are provided. I think the flexibility that it gives in placing storage in the network will improve the ability of service providers to optimize their networks.

IPTV Standards Survey

Light Reading has published an extensive survey of IPTV standards efforts. The 7 page article covers the:

• ITU-T IPTV Standards
• ATIS IPTV Standards
• Broadband Forum IPTV Standards
• Open IPTV Forum Standards

This is well worth reading. The real issue is how these standards will find their way into the existing systems. There are not many major greenfield opportunities left.

France Telecom in WDM PON Trial

Light Reading published an article describing a presentation by France Telecom at ECOC about its participation in the Sardana WDM PON trial. The Sardana group is currently testing WDM PON technology in Tellabs facilities in Espoo, Finland, and plans to conduct a trial in the town of Lannion in France in 2010.

France Telecom is concerned that new services will exceed the capapcity of the GPON technology that it is currently deploying. It plans to offer 3D TV services to mobile users by the end of 2008 and to flat screen TV users by 2011. France Telecom expects that 3D TV to a flat screen TVs will require between 50 Mbps and 90 Mbps.

WDM PON, 10G PON, and Hybrid PON will provide important new capabilities to fiber access networks and cause many more carriers to adopt FTTH strategies. The comments about 3D TV are interesting. I saw an NHK 3D HD demo at NAB, and it was quite compelling.

FTTH Council Says 3.8M FTTH Subscribers in North America

The Fiber to the Home Council of North America published a presentation giving its latest FTTH statistics. It has found that there are currently 3.8 million FTTH subscribers and 2.2 million FTTH IPTV subscribers in North America. This is an increase of 848 thousand FTTH subscribers and 550 thousand FTTH IPTV subscribers over the last six month. The current take rate for FTTH services in North America is 30 percent.

Verizon is driving this growth, but there are a number of smaller deployments as well. It is well spending the time to review the entire presentation.

Comcast Defines Net Neutrality

Light Reading has published an article detailing Comcast's plans for providing net neutrality to its broadband customers. Its approach is based on throttling back the performance of the service to users that habitually use large amounts of bandwidth.

Comcast will continuously monitor aggregate traffic usage data for individual network segments. If overall upstream or downstream usage exceeds a predetermined level on a segment, the software then determines which customers are using a disproportionate share of the bandwidth. If certain subscribers are the source of high volumes of network traffic during those customers temporarily will be assigned a lower priority status.

This approach seems to be a blunt tool. Why penalize customers as the first line of defense. Each application has different response time requirements, why not manage traffic to maintain response times within these limits and go after high volume users only when these techniques cannot cope with the loads.

This is a measure of the confusion around this issue. The FCC has not shown that it understands the issue or that it is capable of doing any more than responding to political heat. Hopefully, it will get sorted out over time.

Portugal Telecom at 200K TV Subscribers

Portugal Telecom's Meo TV service now has more than 200 thousand subscribers. Meo customers represent about 30 percent of its ADSL customers and 7 percent of its total access lines. It added more than 84 thousand subscribers since the end of 2Q08.

The Meo IPTV service over ADSL2+ provides a triple-play service mainly in urban areas. Additionally, Portugal Telecom launched in record time a satellite service to provide nationwide coverage. Portugal Telecom is also participating in the digital terrestrial television contest with both free to air and pay TV services. The 200 thousand meo TV subscribribers includes both IPTV and satellite subscribers. The company did not provide a breakdown of the number of IPTV subscribers.

Meo provides 110 TV channels and over 1,500 video on demand titles. Meo also provides features such as digital recording and pause live-TV . Its set-top boxes are all HD capable using MPEG4.

Portugal Telecom is starting to make good progress with its TV strategy. It is not clear how many of these subscribers use IPTV vs. satellite services.

Alcatel-Lucent Analyst Conference

I spent most of last week at the Alcatel-Lucent Analyst Conference in Orlando, Florida. There was discussion of some announcements that will enhance IPTV services that the company will make next week at the Broadband World Forum. (I will post to the blog after the announcements.)


There was an interesting discussion of FTTP regulation in Europe. Alcatel-Lucent expects that Europe will adopt a duct sharing approach following France's example. It expects that carriers will be required to deploy their own fiber, but will be required to provide access to their ducts. The EU has published a FAQ on this subject with links to detailed analyses in the last footnote.

There was also a discussion of its plans to add Dynamic Spectrum Management (DSM), Level 3 to its DSL cards, which should boost the performance of VDSL from 30Mbps to 40 Mbps at 1 km starting in 2010. It also said that it expects to introduce 10 Gbps PON starting in 2011.

It was clear that Alcatel-Lucent has made significant progress in integrating its two parts. At its Analyst Conference in May 2007, it seemed that the Alcatel and Lucent parts of the organization were still quite separate. Last week it was clear that the company has done a lot to bring things together. There were a number of examples of joint projects.

It looks like the company is ready for its new CEO Ben Verwaayen to start pushing things forward. The company has not solved its problems, but at least it seems to be ready to make some progress.

ATT Backs Off in San Francisco

ATT has run into problems bringing IPTV to San Francisco. It withdrew its proposal to place 850 VDSL systems onto San Francisco's streets after a hearing at the Board of Supervisors that concluded that the project did not meet environmental review exemption requirements. The proposal had been previously agreed to by the city's Planning Department.

Each of the VDSL would be placed on city sidewalks and are 4 feet high, 4 feet 2 inches wide, and 2 feet 2 inches deep. Ten neighborhood associations objected and appealed Planning board's ruling to the Supervisors.

I live in San Francisco, so this affects me personally. These are big boxes and would impede pedestrian traffic on many sidewalks. Two years ago ATT sent me and my neighbors letters asking if they could put one of these boxes in my front yard. I thought that would be cool but my wife said, "you have to be kidding!" None of my neighbors agreed either.

San Francisco is always an exception, but I expect that ATT may receive similar objections in other dense cities. This may also be a problem with other VDSL deployments, especially in Europe, if the residents of the cities involved have any say about it.

Since I will not be able to get U-verse any time soon, I will move ahead with my plan to set up an 802.11n network in my home so that I can start using over the top Internet TV content. I really have no interest in subscribing to cable or satellite service.

DOCSIS 3.0 Appearing in Europe

Liberty Mutual in the Netherlands and ONO! in Spain have introduced DOCSIS 3.0 cable modem services at speeds of 50 to 100 Mbps. The price of the service ranges from 60 to 80 euros per month. Liberty Mutual said that it plans to introduce DOCSIS 3.0 in the rest of its cable systems across Europe.

This is a strong counter to the inroads that the Telco IPTV services are making in Europe. The DOCSIS 3.0 services have premium prices and premium performance. I think that the same approach will be used in the U.S. with DOCSIS 3.0.

BT Vision to add a Download HD Service

BT Vision has entered an agreement with NBC Universal International Television for feature films that will appear on BT Vision's HD movie download service. Current HD films will be priced at 4.96 pounds each and library titles at 2.95 pounds.

The viewer selects an HD film and it is downloaded to the V-box set-top box that comes with the BT Vision service. The viewer is charged after the film has completely downloaded and viewing has started. The film may be watched repeatedly during a 48 hour rental period.

It is good that BT is supporting HD content; however its approach is technically not much different than over the top Internet downloading. BT's access network does not have the bandwidth to support HD streaming today. BT needs to deploy VDSL or FTTH to support streamed HD. This will put at a competitive disadvantage compared to satellite and cable in the UK.

3D Revolution

Light Reading published a keynote interview at IBC given by Dreamworks CEO Jeffrey Katzenberg discussing the resurgence of 3D. He said that all of the major studios have 3D projects under way. He also said that the quality of the 3D is much higher than in the past. Digital 3D is expected to be widely rolled out in 2009, when an estimated 2,500 theatre screens will be equipped with the technology.

I saw a compelling 3D HDTV demonstration by NHK at NAB. They told me that this is already available in Japan over satellite. I am going to have to figure out how much bandwidth will be required for 3D HDTV. I am sure that it will put additional strains on the access networks.

Ericsson Gets Sonaecom Middleware Order

Sonaecom, the competitive provider in Portugal, has selected Ericsson's new IMS-based middleware software for its IPTV service. Sonaecom will also use video encoder from Ericsson's Tandberg subsidiary. Trials and deployments have already started.

Ericsson has been using Orca's middleware at Sonaecom. In this case Ericsson is replacing a smaller middleware vendor at a smaller deployment. Ericsson's challenge will be to do the same thing with a Tier 1 carrier.

ERicsson IMS IPTV Demo

At the CTIA conference in San Francisco this week Ericsson demonstrated capabilities that its new IMS-enabled middleware provides to integrate the TV experience with the PC and the mobile phone. It showed the ability to use presence, messaging, and both audio and video calling to communicate with other family members.

Ericsson said that IMS made these features much easier to implement and that it would be delivering these capabilities with its new IMS-enabled middleware.

The demonstration was impressive and included an attractive and simple user interface. It showed some nice ways that IPTV services can distinguish themselves.

Orca and Ruwido Create Fingerprint Personalization

Orca Interactive and Ruwido have created the ability to use fingerprints to personalize the IPTV viewing experience. Orca is the Israeli middleware company that is now a subsidiary of Viaccess. Ruwido is an Austrian manufacturer of remote control devices that has been used by several European IPTV providers.

The Orca middleware will be able to distinguish user by reading their fingerprint using a Ruwido remote control. Orca stated that this will be used to personalize viewing including defining favorite channels, video on demand content, and PVR content. It can also change skins and set parental controls. It can also facilitate targeting advertising to each specific viewer.

This is an interesting approach that is simpler and more direct than requiring some kind of sign in process. It will be interesting to see how this works in a real deployment.

Bigband Introduces Cable/IPTV Ad Insertion System

Bigband has introduced a chassis based ad insertion system that it is targeting at both the cable and Telco IPTV markets. This system can support 25,000 to 30,000 set-top boxes assuming a 50-50 mix of HD and SD for personalized advertising. It can support higher numbers of set-top boxes if larger groupings such as geographic groups are made.

For IPTV it can create additional multicast channels, one for each personalized add that is broadcast. It can also distribute some of the ads using unicast. It is currently running trials of this product with some Telco IPTV providers.

Bigband stated that it will have more announcements about the application of this product to Telco IPTV over the next several months including which middleware software companies will support its system.

This is an interesting announcement. Interactive advertising and interactive content will become increasingly important in differentiating IPTV from its cable and satellite competitors.

ATT Introduces Whole Home DVR

ATT has introduced the whole home DVR feature provided by its Microsoft Mediaroom software. Viewers will be able to record up to four programs simultaneously and will also be able to play back up to four recorded programs at once. It will store up to 37 hours of HD content or 133 hours of SD content. It will also be possible to schedule recording on the DVR from a remote PC or a mobile phone.

The demonstrations of this feature that I have seen were quite attractive. I would certainly be happy to have it myself. The only caveat is that its ability to record four HD streams simultaneously will be limited by the amount of bandwidth available.

Ericsson Introduces IMS-based Middleware

Ericsson has introduced an IPTV middleware package that is aligned with the Open IPTV Forum specifications and will be pre-integrated with IMS. It will interoperate with third-party products from IPTV companies such as Accedo Broadband, Agama Technologies, Amino, HP, SecureMedia, Sun Microsystem, Tilgin, Verimatrix, and ZyXEL.

This is a major push by Ericsson to increase its dominance in IPTV. It has a tough task in front of it to displace incumbent middleware suppliers, especially with the Tier 1 carriers. Most of the Tier 1 providers are using either Microsoft, Thomson, or middleware packages that they developed themselves.

BSNL to Expand IPTV to 100 Cities

BSNL, that state run telecom operator in India, plans to expand its IPTV offering to 100 cities in India and to bring the service to more than 20 million homes across India. The service is now available in the New Delhi area, Bangalore, and Kolkata. Following the recent launch of the service in Rajasthan, the company was receiving 100 orders a day within one week.

The price of the service is about $4.50 per month. The company expects to have 100 thousand IPTV subscribers by March 2009.

This is an ambitious deployment plan. It is a good idea to take such an aggressive announcement from India, with a grain of salt. The biggest problem there is still building out the broadband infrastructure to support its IPTV deployment. On the other hand, having 100 thousand IPTV subscribers in six months seems reasonable.

Changes in UK Consumer Behavor

Oxygen8, a UK new media advertising company, has released market research results that indicate that:

• Digital media now accounts for almost 50% of daily media consumption and is the preferred medium for receiving marketing messages
• 41% of consumers chose the Internet as the medium they could not live without
• Only 62% of TV is now watched in real time
• 75% of the UK population rarely watch TV adverts when viewing recorded programs

Two thirds of of the advertisers recognise that consumers are less receptive to traditional advertising, 76 per cent feel that Internet advertising is more effective than both TV and print. 83 per cent of the media companies feel that SMS and email is more effective than the traditional channels. 13 per cent of the media companies and 23 per cent of the advertisers believe that traditional media is still more important than digital media.

This research was performed by industry analyst Redshift Research for Oxygen8.

Oxygen8 clearly has an agenda here, but these results appear to be pretty good. The lesson here is that the IPTV companies have to position themselves as new media with interactive advertising rather than old line TV content delivery companies.

True Thailand IPTV Disappoints

True in Thailand said that it has 3 thousand IPTV subscribers and hopes to double that to 6 thousand by early 2009. It believes that the service can be profitable at that level.

True had slowed its IPTV marketing over the last year, but is now ready to relaunch the service as a premium service for affluent Thais and for foreigners rather than as a mass market service. It offers 12 channels including karaoke on demand.

True has an existing base of 2 million fixed-line users, 600 thousand broadband customers and 600,000 pay-TV subscribers.

True's IPTV results as well its new strategy are quite modest. It does not appear that Thailand will be a major IPTV country any time soon.