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.