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The December 15, 2005 Issue Provided by System Dynamics Inc.
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In This Issue

Editor's Note
Wishing you all a great year in 2006!

Heard on the Net

Briefly Noted
Updates, Observations and Trends

Switching Channels at TelcoTV

Lucent Shines a Light On IMS

Moving IPTV Around the Home
An Interview With Coaxsys

Your Voice -
Readers Comments

Upcoming Conferences


Editor's Note: Wishing you all a great year in 2006!

It struck us that as we wrap up 2005 and head into 2006, the last decade has been one of enormous change and progress in our industry.

In 1996:

  • Sandy left a company named AT&T which was splitting itself into companies called Lucent, Avaya, Agere and of course, AT&T. Ten years later the company named AT&T is the remnants of AT&T folded into what was then an incumbent local provider called SBC.
  • Dave was working with Motorola on their early cable modems. Standards-based sub-$50 modems seemed like a distant dream.
  • We couldn't even get ISDN at our home, much less broadband.
  • Broadband games and content were talked about at conferences, not daily in the newspapers or at the hairdresser's salon.
  • Newspaper and TV ads ended with 800 toll free numbers, not URLs.
  • Voice over IP was a brand new concept with products from small start-ups used by hobbyists.
  • Home networks were something a few geeks were implementing, not products you could inexpensively buy at retail stores.
  • HDTV was something the consumer electronics industry wanted to promote to give the industry a new boost, not products rapidly becoming mass market.
  • ...and lots more, with your favorites (that we've left out) here.

It's been an exciting ride and at the upcoming 2006 CES we'll see many more things which by 2016 will be commonplace--or perhaps already dated.

Thanks to all of you in the industry for your part in creating this exciting broadband world we live in! Hopefully the coming years will be ones in which we apply these technologies to spreading education to rural areas, improving home care for the elderly and providing social services more effectively to those in need.

We wish that on the world scene we could talk about similar strides in living together in peace and making the world a better, healthier and happier place. Hopefully 2006 will be a year in which we can make progress in that direction.


Heard on the Net

News about People and Companies Influencing The Broadband Home


People News

Jeff Abbas has been promoted to President and CEO of the National Cable Television Cooperative (NCTC). He was previously NCTC’s senior VP of business affairs. ( www.cabletvcoop.org )

John Canning has become Director of Content Production at Yahoo Adventures. He was previously with Microsoft. ( adventures.yahoo.com )

Marty Falaro has joined encryption and digital rights management company, SecureMedia, as VP, Worldwide Sales. ( www.securemedia.com )

Reid A. Fitzgerald was named Director of Network Sales and H. Lee Linton as Director of Business Solutions for Grande Communications. ( www.grandecom.com )

Barry A. Hoberman was named President and CEO of ultrawideband chip company TZero Technologies. He was previously with Virtual Silicon Technology. ( www.tzti.com )

Robert A. Quigley has joined Charter Communications as executive VP and chief marketing officer (CMO). Quigley was previously with AOL. ( www.charter.com )

Justin Rattner was appointed as CTO at Intel. The company also appointed Eric Kim to be CMO. ( www.intel.com )

David Zonsheine was appointed as VP for R&D at Infogate Online. Zonsheine was previously at Enigma. ( www.infogateonline.com )


Company News

Acquisitions

Alcatel, AT&T, and Telefonos de Mexico have agreed to acquire a majority stake in residential gateway and backend management company 2Wire. Alcatel's share was 25% and cost $120 million; together AT&T and Telemex are purchasing 26%. ( www.alcatel.com ) ( www.att.com ) ( www.telmex.com.mx ) ( www.2wire.com )

Airspan Networks has acquired Wi-Fi specialist Radionet Oy of Finland. The purchase price is estimated at up to $1.88 million in cash. ( www.airspan.com ) ( www.radionet.com )

Cisco Systems plans to acquire cable equipment company Scientific-Atlanta in a deal valued at approximately $6.9 billion. The Scientific-Atlanta operation will be managed by senior VP Mike Volpi, in Cisco’s routing and service provider technology group. ( www.cisco.com ) ( www.scientificatlanta.com )

Korea Telecom, Korea's largest fixed-line telco, paid 28 billion Won ($27.2 million) for 51% of the production and talent management company, Sidus FNH. This is part of KT's drive to become a multi-media corporation through infrastructure upgrades and content acquisitions. ( www.kt.co.kr/kthome/eng/index.jsp ) ( www.sidus.net )

Funding

Beceem Communications has raised $22 million in Series C funding to speed its WiMAX-compliant chipset development. ( www.beceem.com )

Brightcove, an open Internet TV service, announced it has raised $16.2 million in B round funding. Brightcove simultaneously announced a content distribution partnership with AOL, and the appointment of Barry Diller to the Brightcove Board. ( www.brightcove.com )

BroadLight, a supplier of communication chips and optical transceivers, closed a $10 million series D financing round led by Motorola Ventures. ( www.broadlight.com )

CopperGate, a home and media networking chip provider, closed a $14.5 million third round of funding. ( www.copper-gate.com )

Inetcam, a provider of software for real-time streaming of video to cellphones, obtained $12.5 million in funding. ( www.inetcam.com )

Intel has launched a $50M venture capital fund to invest in technology companies in the Middle East and Turkey. The development focus will include broadband infrastructure, mobile wireless using WiMAX, local content and digital health solutions. Separately, Intel Capital has made a strategic investment in digital HD radio technology developer iBiquity Digital. ( www.intel.com ) ( www.ibquity.com )

Navio Systems, a digital rights management company, closed a $25.4 million Series B round of funding. ( www.navio.com )

Strix Systems, a wireless mesh network switching provider, has secured $12 million in its round of preferred stock financing. ( www.strixsystems.com )

VividLogic a provider of home-entertainment infrastructure software, completed a Series A funding round of $3 million. ( www.vividlogic.com )

World Wide Packets, a provider of Carrier Ethernet solutions, completed a round of funding for $25.5 million. ( www.worldwidepackets.com )

YouTube, a video-sharing Web site, raised $3.5 million Series A financing. ( www.youtube.com )


Other News

AOL and Warner Brothers Domestic Cable Distribution announced a collaboration forming In2TV, a new broadband network to launch this January. It will enable consumers to stream more than 300 classic TV series from Warner Bros., free and on-demand, on the Web. Its programs will be advertising supported. AOL will deliver content over peer-to-peer grid distribution networks, developed in partnership with Kontiki and using a new "AOL Hi-Q" high-quality video format designed for full-screen viewing on PC monitors or TVs. ( www.aol.com ) ( www.warnerbros.com ) ( www.kontiki.com )

Cablevision Systems ratcheted up the broadband speed wars by expanding its Optimum Online Internet service to offer customers symmetrical speeds of up to 50 Mbps. They increased the speeds for current subscribers from 10 Mbps downstream/1 Mbps upstream to 15 Mbps down/2 Mbps up at no additional cost. The company also rolled out 30-mbps and 50-mbps options across its territory. ( www.cablevision.com )

Cisco Systems announced a new series of access points that can be used for citywide Wi-Fi deployments. The new access points can be deployed on rooftops, light posts and power poles and each is equipped with two radios. ( www.cisco.com )

Gemstar-TV Guide International and Handmark launched "TV Guide Mobile". TV Guide Mobile offers subscribers access to TV Guide daily local TV listings. The service is designed for Palm handhelds, Treo smartphones and Windows Mobile pocket PCs and smartphones.( www.gemstartvguide.com ) ( www.handmark.com )

Inmarsat switched on its satellite-based broadband service called The Broadband Global Area Network (BGAN). The service is targeted at users in locations with unreliable or non-existent telecommunications infrastructure and will offer simultaneous voice and data at rates up to 492 Kbps. It currently covers Europe, the Middle East, Asia and Africa, with plans for further extension. The initial terminals weigh about 1kg and are half the size of a laptop, so don't plan to put them in your pocket. The cost of transferring one megabyte of data from anywhere in the world is put at between $4 to $7, while a voice call is expected to cost under $1 a minute. ( www.inmarsat.com )

Korea Telecom launched WiBro mobile broadband wireless at the Asia-Pacific Economic Cooperation (APEC) summit in Busan. ( www.kt.co.kr/kthome/eng/index.jsp )

Ruckus Wireless announced their Interoperability and Open Testing program (RIOT) for testing operation of IP-enabled media appliances, such as set-top boxes, PVRs, mobile video players and conditional access systems over their Wi-Fi technology. Participants include Advanced Digital Broadcast, Amino, i3 micro technology, Entone Technologies, Telsey Telecommunications and Sling Media. ( www.ruckuswireless.com )

Skype released a new version of its software that includes video calling. ( www.skype.com )

Sony launched an Internet calling service called Instant Video Everywhere (IVE) that emphasizes video conferencing. The basic version which is free, lets users make computer-to-computer calls. The premium version, which allows users to connect with traditional and mobile phones, costs $9.95 a month. ( sony.glowpoint.com )

Standards

MoCA: The Multimedia over Coax Alliance (MoCA) announced completion of its first “Plugfest” where eight member companies tested products to verify that they interoperate and perform consistently with the specifications. The first MoCA certification wave is expected this month. ( www.mocalliance.org )

Mobile WiMAX: A mobile WiMax standard has been approved by the IEEE and will be designated 802.16e-2005. Mobile WiMax trials and certification testing are expected to start in the first quarter of 2006, organized by the WiMax Forum. Products will likely follow in late 2006 and services by early 2007. ( www.ieee802.org ) ( www.wimaxforum.org )


Countries

Australia

Telstra has said it will seek legislative reforms before proceeding with its planned $5 billion next-generation network. Telstra wants to exempt new services from mandated 3rd party access. ( www.telstra.com/au )

UK

Digital TV transition: In a report commissioned by UK regulator Ofcom, technology consultants Scientific Generics reported that the switchover costs to digital TV could affect up to 40% of households, with the total bill for non-voluntary conversion estimated at £572m (€847m). The report estimates that between 60% and 75% of homes will have converted all their AV equipment to digital prior to switchover, which begins in 2008.

BT price reductions to ISPs: The price BT charges ISPs to connect new broadband customers to BT's unbundled local loops will be cut after 15 December by 40%. Regulator Ofcom has continued to pressure BT, and a string of price reductions has been implemented.

US Statistics

HDTV: Kagan Research issued a report on "The State of High Definition Television 2006" which projects that in the US "The number of HD sets sold in 2005 will number 10.1 mil. At the end of 2005, more than 23 million HD sets will have been sold since first becoming available in 1998" and that at the end of 2005 "17.2% of TVHHs will have at least one set." ( www.kagan.com )

Cable Telephony: IP Media Monitor reported that the top U.S. cable operators passed the four million voice customer mark in Q3 05, with quarterly telephony customer gains going strong and around 9% of all cable homes passed that can buy telephony service, do so. ( www.ipmediamonitor.com )

Broadband Growth: Broadband Daily reported that US broadband households exceeded 39 million in 3Q05. They also indicated that the four Bell operating companies added roughly 1.3 million DSL customers in the third quarter, their strongest collective quarter ever.


Briefly Noted: Updates, Observations and Trends

Each month, we collect miscellaneous happenings, studies, trends or observations you might have missed. This month we feature a video blog for mobile videophones, mobile wireless wins for IPWireless, and lots more "video on the go".


User Generated Content: MyVideoBlog

Mobaila announced MyVideoBlog, a service for customers of mobile provider "3" Italia. The service allows users to create a video diary from their 3G mobile videophones by placing a video call to the short code 4380.

The service is a natural outgrowth of a trend Intel told us was important in the Spring of 2001. At our Broadband Home Summit Europe conference, the lights went on for us when Kerstin Schueler (Intel, Germany) talked about how "consumers will fuel the digital content spiral" with their photos, their music and their videos which are increasingly coming from their digital cameras, MP3 players and other consumer devices.


Broadband Wireless: There's More Than WiMAX

With all the emphasis on WiMAX development and its potential for providing mobile broadband wireless services, it is worth noting that non-WiMAX vendors have been getting a string of broadband wireless wins around the world. Examples of recent IPWireless wins include:

  • supplying equipment to Alcatel for netZAP's commercial expansion of its UMTS TD-CDMA Network in Jakarta. The network is scheduled for completion before year end with service going live in January 2006.
  • providing technology used in "Neltes tinklas", which launched their wireless broadband access network in Lithuania. It supports full mobility and data transfer speeds of up to 3 Mbps
  • powering the T-Mobile CZ network recently deployed in Prague.
  • IPMobile, which plans to introduce data communications services in Tokyo, Nagoya and Osaka in October of 2006, is basing them on UMTS TDD technology.

A Facelift for Video Services

After last year's Consumer Electronics Show, we wrote "What was big at CES? Our answer is the dawning of Video-on-the-Go". Many announcements this year have borne that out, including a raft during the past few months.

Video content sources and their means for getting to viewers keep expanding. A few of the latest include:

  • EchoStar recently launched its PocketDish portable video player. Their press releases concentrated on a comparison of their device with Apple's video iPod. Both have 30-Gigabyte hard drives and provide video, music and photo storage.
  • TiVo, the maker of digital video recorders, announced a feature which lets TiVo owners watch recorded television shows on Apple's video iPods and on Sony's handheld PSP game machine. Previously TiVo had announced its release which allows users to transfer programs to PCs, DVD's, and portable video players that support Microsoft's mobile video format.
  • Maybe instead of skipping that commercial you want to view it? TiVo plans to offer an advertising search solution in Spring 2006. The new product will deliver targeted advertising to subscribers that want to view particular advertising categories like automotive, travel, telecommunications, and consumer packaged goods.
  • Movielink, a joint venture of five Hollywood studios to offer movies over the Internet, has signed a deal with Twentieth Century Fox, allowing it to offer movies from all major studios for the first time.
  • Lime, a media company devoted to lifestyle programs on subjects like organic food, hybrid cars and alternative medicine, has started a Web site featuring a collection of blogs, podcasts of radio shows and many video clips drawn from its TV programming via Wisdom Media Group. It is already sending text programming to mobile phones and will add video offerings shortly.
  • AOL made an arrangement with Brightcove of Cambridge, Mass. that will allow almost any producer of video content to distribute programming on its service and split revenue from advertising or fees. Users will find the programs through AOL's video search feature, which offers an index to video clips on the Web.
  • Verizon Wireless has agreed to use Qualcomm Inc.'s MediaFLO network to broadcast live TV to cell phones in about half of the markets already covered by its CDMA EV-DO high-speed wireless service. The service is set to launch commercially in late 2006.
  • NBC Universal has become the second network to sell television shows a la carte on Apple's online iTunes store. More than 300 episodes from about a dozen prime time, cable, late-night and classic TV shows are now available for $1.99 apiece, viewable on computers or downloadable on the latest, video-capable iPod.
  • Sprint Nextel announced a deal with vendor MSpot to offer full-length movie and TV downloads to mobile phone subscribers for a flat fee of $6.95 per month.

  • Switching Channels at TelcoTV

    We came away from TelcoTV feeling that we've arrived at the tipping point for telcos offering video services. The biggest telcos are all either committed to moving forward at scale, or are close to a commitment.

    IPTV used to be for pioneering small telcos; the big ones were thinking about it but weren't ready to make any commitments. While the big telecom suppliers showed up at TelcoTV to express their interest, most of the business went to smaller pioneering IPTV vendors.

    Now all the big telcos are clearly going to play. TelcoTV had speakers from independent telcos like Pioneer Telephone Cooperative and Chilbardun Telephone. But the keynote speakers were from AT&T (formerly SBC) and Manitoba Telecom Services (MTS), and other big incumbents like Bell Canada, BellSouth and Quest were well represented.

    Traditional IPTV vendors like Minerva, Kassena, BitBand and Amino were there. But the big booths were dominated by large, traditional telecom suppliers like Alcatel, Lucent, Siemens, Nortel and Motorola. They now seem convinced that IPTV will take hold with their "Tier 1" customers and they have to be part of the action.


    Confluence of Forces

    A confluence of forces has brought us to this point:

    • Traditional telephony revenues eroding: As people subscribe to broadband, they often cancel the second line they used for dial-up. As they get mobile phones, many people cancel their wireline service. Companies like MTS and PCCW (formerly Hong Kong Telephone) have found that adding video services not only provides a new revenue stream, but also makes customers more likely to keep their phone service.
    • Increasing competition: The entire communications space is filled with companies trying to get their part of the market. In many markets, new facilities-based "alternate operators" like FastWeb are gaining a foothold by providing the "full bundle" of data, voice and video. VoIP from independent providers is catching on quickly. As cable companies have started taking telephony customers, it's logical for telcos to go after cable's video customer base.
    • Technology improvements: The latest DSL technologies like ADSL2+ and VDSL2 provide sufficient bandwidth (at short loop lengths) for multiple channels of video. New compression technologies like MPEG4/AVC and WM9/VC1 make it possible to carry high-definition video in DSL bandwidth. New VOD server systems move video servers much closer to the network edge, reducing the load on the core network.
    • Deep fiber: To prepare for high speed data, telcos have extended fiber deeper into the plant and deployed some flavor of DSL. This provides a good base for competitive video services, with deeper fiber permitting more simultaneous video channels.
    • Demonstrated feasibility and success: In Hong Kong, PCCW has the world's largest IPTV deployment and is rapidly catching up with the incumbent cable operator. MTS has gotten 20% market share in Winnipeg in the year since it started full commercial rollout of IPTV; it now provides TV service to over 40% of all the digital TV homes there.


    AT&T's "U-verse TV" Service

    One of the biggest stories at TelcoTV was the upcoming launch of AT&T's "U-verse TV" service. The new AT&T (formed by the merger of SBC Communications and the old AT&T) plans a very ambitious offering with IPTV services personalized for each user and integrated across "the three screens": the TV, the PC and the cellphone.

    At the conference, Jeff Weber, AT&T's Vice President, Product & Strategy shared an opening keynote session with Alcatel's Jim White. To some skeptics who have questioned AT&T's ambitious technical approach based on Microsoft IPTV, Weber said "we are well past the 'Does this solution work?' stage." He said they had completed their last technical field trial and concluded that "it doesn't have a hole." He said they have signed the content agreements to create an offering "robust enough and good enough for a competitive marketplace," and were "on track" for a "controlled launch" in the first quarter of 2006 followed by a full launch later in the year.

    Alcatel's Jim White --> Click for larger pictureWeber and White described how the service Alcatel is helping AT&T roll out will differ from today's television services. They talked about the ways TV services will be improved, including a better user interface, fast channel change, multiple picture-in-picture capability and whole home digital video recording (DVR).

    But better TV is only part of the picture. They think the trump card will be cross-service integration and interoperability. As an example, they said you could take a picture of your son's baseball game, upload it to the SBC Yahoo! DSL service and "within five minutes" your father could view it on the TV screen at his home. This multi-service integration is where many of the US telecom providers intend to take TV; it will be seamlessly integrated with other communications and entertainment media.


    Traditional Telecom Suppliers

    As the largest telcos move to deploy IPTV, their traditional large telecom suppliers are playing a lead role. These large suppliers have in common an emphasis on their ability to handle large-scale integration of complex telecommunications systems and their experience in providing scalable systems.

    Here is a capsule view of the positioning of these suppliers, garnered from our meetings, conference presentations and press releases.

    Nortel

    Nortel booth at TelcoTV --> Click for larger pictureAt TelcoTV, Nortel's Walt Megura (GM of Broadband Networks) and Ken Couch (Director of Broadband Network Marketing) told us about the end-to-end IPTV solution Nortel announced at the show. Their emphasis was on the integration of Nortel's SIP-based multimedia communication technology into the television experience. They said IPTV subscribers will be able to use their TVs to communicate and interact with friends and family through a variety of media, such as voice, instant messaging, video, and picture sharing.

    They told us about the extensive testing which take place at their IPTV lab in Ottawa and their offering of professional services which provide a single point of contact that can manage the network build-out, as well as participate in planning, operating, and/or managing the customer's IPTV network.

    Nortel has assembled a vendor ecosystem for providing a complete end-to-end solution. It includes middleware from Minerva Networks and Orca Interactive; video-on-demand from Kasenna and BitBand; content security solutions from Irdeto Access; encoders from Harmonic and Optibase; Web browser interface from Espial; digital program insertion from Terayon; an emergency alert system (EAS) from Trilithic; xDSL modems from Westell; and set-top boxes from Amino.

    Motorola

    We were already familiar with much of Motorola's video expertise, including head-end and set-top equipment and various types of wide area services and last-mile configurations over copper and fiber. At the show, Floyd Wagoner, of Motorola Networks Global Marketing, concentrated our discussion on the support, applications, integration and management aspects of Motorola in video services.

    Motorola role in Verizon FIOS --> Click for larger pictureMotorola's big win in the telco TV space is Verizon. Motorola is providing the turn-key engineering and construction of head-ends and hub offices; providing the set-top boxes; and implementing the Network Operations Center, providing initial operations staffing and post-deployment support.

    Lucent

    Lucent's IPTV infrastructure has been used in commercial deployments, such as that of Telefonica, which currently serves more than 100,000 residential subscribers. Shortly before TelcoTV, Lucent announced their Multimedia Access Platform which, in conjunction with their IP Multimedia Subsystem (IMS) makes it easier for service providers to introduce "blended lifestyle" services combining voice, video and data capabilities.

    At TelcoTV, our discussion with Robert Piconi, VP & GM of Lucent's Broadband Solutions, touched upon the importance of having a consistent look and feel for advanced services, however they are delivered to the customer. When our conversation moved to the role of IMS in IPTV and more generally in blended services, we realized a more in-depth discussion would be helpful. Lucent's IPTV HQ is only a few minutes from our home base, so it made more sense to continue the discussion there rather than at a conference 3000 miles from where we both are based; we report below on our follow-up visit.

    Alcatel

    Alcatel's major IPTV visibility in the US is through its role as system integrator for the upcoming AT&T commercial launch in 2006. Alcatel's partners in the AT&T project include Microsoft, Scientific Atlanta, Amdocs, Motorola and 2Wire.

    We believe the emphasis on service integration is what led Alcatel, subsequent to this conference, to purchase 25% of gateway and backend management provider 2Wire (with another 26% purchased by AT&T and Telmex). Alcatel's announcement stressed "a more consistent, dependable user experience and a significant reduction in the level of complexity users will be faced with as they continue to embrace new media-rich, broadband services."


    What Telcos Are Offering

    Amino IPTV set-top box --> Click for larger pictureThe IPTV value proposition a telco needs to offer customers is very dependent upon the specific dynamics within each country or region. The competitive offerings, the number of TVs in each household and whether HDTV is a factor all have a impact on what IPTV offering will be most successful.

    The usual IPTV offerings include "broadcast" video, subscription channels, video-on-demand and an interactive guide function. Additional features can include interactive TV and PVR functionality. Many telcos market voice, data and video as a bundled service. When the customer takes voice and video, the provider may show caller ID on the TV screen.

    By and large, most IPTV offerings are similar to those offered by cable companies. Some telcos seek to differentiate themselves by novel pricing packages or better customer service.

    MTS's Roy Sherbo --> Click for larger pictureOne of the key places some telcos are differentiating their offerings is by allowing customers to choose their own content rather than receiving a broad "one size fits all" bundle of channels. Companies like FASTWEB in Italy and MTS in Canada allow customers to select specific "theme groups" and individual channels. PCCW in Hong Kong allows the customer to order directly through the TV interface; customers can add an additional pay channel subscription at once using their remote control. This requires telcos to put in place more sophisticated "self-service" channel selection and billing systems than most cable operators have.


    Distributed Video Servers

    Many telcos offering on-demand video services started with a centralized video server architecture. As these services start reaching high penetrations and usage, telcos have found it appropriate to move the servers further toward the edge to reduce the load on the core network. Many vendors now offer a distributed video server architecture with a master repository in servers at a central site and cached copies in additional servers close to the network edge.

    Dave with John Pickens of Arroyo --> Click for larger pictureWe talked with many vendors offering these video architectures, including Kasenna, BitBand, and Arroyo. All said this approach is necessary for telcos driving toward high usage of on-demand video. Some systems are based on proprietary hardware; others, like Arroyo's use standard "off the shelf" high-capacity servers.


    Microsoft--An Invisible Presence

    Much has been made of the competitive situation in today's IPTV vendor world. Some see IPTV as being Microsoft on one side and all the other middleware providers, like Minerva, Orca, Kasenna, etc. on the other.

    The other providers encourage telco customers to "mix and match" from a variety of standards-based hardware and software vendors. By contrast, Microsoft's IPTV solution is an integrated solution with proprietary software--middleware, video servers, DRM and video codecs--that only operates with set-top boxes built to Microsoft specifications. It makes extensive use of network servers to provide "instant channel change" and other features.

    At the TelcoTV show, Microsoft came up in lots of private conversations, but was nearly invisible. There was no Microsoft booth on the show floor, and only one Microsoft speaker in a panel session.

    We found it especially striking that--even though Microsoft IPTV is central to AT&T's IPTV offering--AT&T and Alcatel barely mentioned Microsoft's role in their keynote speeches. AT&T referred to Microsoft as "a software partner" in a long list of other vendors.


    Conclusions

    IPTV is at the tipping point. All the key technologies are reaching maturity. Competitive pressures are forcing most telcos to move quickly before the lose much of their "cash cow" residential voice business.

    Unless something goes terribly wrong, AT&T will soon launch the most ambitious IPTV deployment to date, with the goal of providing a truly differentiated service featuring "blended services" across the TV, PC and cellphone screens.

    It will be very interesting to watch how the satellite and cable incumbents react.

    ( www.att.com ) ( www.alcatel.com ) ( www.nortel.com ) ( www.motorola.com ) ( www.lucent.com )


    Lucent Shines a Light On IMS

    IP Multimedia Subsystem (IMS) is emerging as the central integrating mechanism for future telco services. We have been reading about IMS for several years, and have read several long technical explanations. But we didn't have a good idea of what IMS can do for users, and were delighted to have to opportunity to learn more.

    Lucent has positioned IMS as a critical part of making multiple services interoperate. As a follow-on to our meeting with Lucent at Telco TV, we visited their IPTV headquarters to meet with Marcus Weldon, CTO, Lucent Broadband Solutions and Kurt Steinert, Media Relations.

    Lucent uses the term "blended services" to describe a stage beyond service bundling. Bundling is a marketing device which provides discounts to customers who subscribe to multiple services. With blended services, voice (fixed and mobile), data, and video services are aware of each other and interwork to provide higher user value. Much of the discussion at TelcoTV was about blended services and many telcos are making blended services--rather than bundled services--their path to differentiating their services from those of competitors.

    Marcus talked about IMS as being "a common services control framework" which has "most of the smarts for real time interactions". He walked us through some real-world examples of blended services to show us what this could mean for a user.

    Integrating the TV and the cellphone

    Here's one scenario he shared. Most of us have heard of services that alert people if their phone rings while they are watching TV. The service allows the user to decide whether to take the call by looking at the caller ID on the TV screen. The user can answer the call at that time, or decide not to take it and send it to voice mail.

    In an IMS world, where intelligence can provide many details about the particular situation, the service can go well beyond the basics.

    For example, if only one person is watching the show and decides to pick up the call, the program will automatically pause on the TV screen and will start recording to a network-based PVR. When the viewer finishes the call, the TV will prompt her as to whether she would like to continue from where she left off. If several people are watching the program, and one answers the call, the others have the option to pause the show; however, they want to keep watching, the program continues playing and is simultaneously recorded to the PVR from that point, so the person who took the call can see it later.

    What makes this all work? Two of the key elements for IMS-IPTV interworking are a central user database, which stores the current user profile and session state, and the Service Capability Interaction Manager (Service Broker) which is the piece of intelligence that provides the dynamic services blending.

    In this TV/phone call example, Lucent detailed the requirements to implement such a service.

    • The IMS platform must be aware that the user is watching the TV (to 'know' to generate a TV Caller ID pop-up).
    • IMS must know the identities (addresses) of the various user set top boxes, and the association between the user's video 'identity' and telephone numbers, in order to send the appropriate caller ID information to the appropriate devices (set-tops).
    • IMS must know which channel each set-top is currently watching, in order to record the appropriate stream for the user.
    • IMS must be able to initiate storage of content for any user, then generate a record of stored content per user and notify the user that recorded content is available for viewing, upon termination of the voice call.

    Let's continue our scenario a bit further. Suppose the person who had to take the phone call now has to rush to the airport to catch a plane. If she takes a video-capable device--such as phone, laptop or PDA--with her, IMS intelligence will allow her to watch the conclusion of the program on this other device while she is traveling. Such interworking across wired and wireless is an important result of IMS control.

    Useful advertising

    Another example shows how IMS could help to generate advertising revenue. If someone is watching the Weather Channel and has signed up for a local weather alert service, a message could alert the viewer if a storm is impending. An RSS feed could provide more detail--via "Web on TV"--to learn the timing and severity of the storm.

    If the viewer lives in Florida and the alert was about an approaching hurricane that might come his way, a local Home Depot store could push an ad for plywood to board up his windows. He would have the opportunity to cancel the ad or could indicate "remind me later" so he could take action in his own timeframe. In this case, the ad might well be viewed as helpful, rather than as an intrusion.

    These and additional scenarios that Marcus walked us through gave us a clearer picture of the goals surrounding IMS. Of course, these things will not be implemented overnight, but will gradually be introduced and made to interwork with today's systems.

    AT&T, BellSouth and Cingular Wireless

    We found these examples pretty compelling as an argument for IMS--and were evidently not the only ones. In October, SBC Communications announced that Lucent Technologies will provide an IMS platform to help SBC (now AT&T) integrate wireline and wireless services as well as high-speed Internet and video. That same month, Cingular Wireless awarded a contract to Lucent for an IMS-based solution for new personalized voice, video, data and multimedia services. In November, BellSouth selected elements from Lucent’s IMS-based solution, including network integration and technical support, to provide the platform for their residential Voice Over IP service. (BellSouth and AT&T together own Cingular.)

    It seems as though these three service providers believe Lucent's IMS is part of the "secret sauce" that will help them reduce the complexity of their networks and enhance their service offerings, so they can meet their goal of attracting and retaining customers.

    ( www.lucent.com )


    Moving IPTV Around the Home: An Interview With Coaxsys

    IPTV technologies have come a long way in getting high-quality television to the home--but how does it get to the TV? The phone line (fiber or copper) connects to a home gateway. IPTV set-top boxes are connected to TVs. The usual connection between the gateway and the set-top boxes is 100 Mbps Ethernet. That's fine if the gateway is close to the TV -- a short Ethernet cable will do fine.

    But many homes don't have a phone line close to the TV, so they need Category 5e cabling from one room to another. Most homes, especially in the US and Canada, have more than one TV, so Category 5e has to be run to a set-top box in each room. More Category 5e cabling is needed for PCs. That makes for a pretty expensive IPTV installation.

    Using the coaxial cables that are already in the walls of the house is an attractive alternative. Coaxial cables run between all the TVs in the home. Coax is very well designed to support broadband communications--if cable or satellite broadcast television looks good on the TVs, the coax will probably carry high-speed data just fine.

    Several companies have been working to develop technologies to move high-speed data over coax--an ideal solution for IPTV. We recently interviewed one of them on the phone to get a sense for the state of the art. Ted Archer is Director of Marketing at Coaxsys, a Silicon Valley company that has developed a complete product line for Ethernet over coax.

    We asked Ted whether the Coaxsys products formed a "generalized home network" and he told us that product positioning depends on the market. Coaxsys believes phone companies, cable companies, satellite companies and system integrators need somewhat different products, and Coaxsys provides different products to meet the needs of each market.

    Coaxsys IPTV 7000 Coax Ethernet Adapter --> Click for larger pictureTed said "Telco IPTV needs a network which can carry IP video over the existing coax from a home gateway to set-top boxes" on top of each TV, and their "IPTV 7000" does just that. Coaxsys specs indicate that their IPTV 7000 units will operate at up to 104 Mbps over "250 foot adapter to adapter runs including splitters". Ted tells us that these are now deployed at "over sixty telcos for IPTV--the largest announced customer is Consolidated Communications," a 100-year-old local telco in Illinois, and "we're running lab trials and field trials with all the RBOCs."

    He said the reason Coaxsys had focused on TV applications is that "PCs are mostly taken care of by wireless" and coax usually does not run to PC locations. He said Coaxsys equipment is "being used by other companies for non-IPTV networking" and they are selling equipment to members of CEDIA who will pull coax to operate video and data over the same coax.

    "Cable operators have different needs and demands" says Ted, and other companies "don't focus enough on the needs of specific markets." Unlike the IPTV products which use the entire spectrum on the coaxial cable, Coaxsys' TVnet/C product for cable operators carries high-speed data over coax in areas of the spectrum outside that used to carry cable services, so it does not interfere with existing video services.

    Coaxsys has specific products for other market segments as well, including satellite providers and system installers. It also has a model designed specifically for the Amino set-top boxes which have become very popular in IPTV deployments.

    Coaxsys recently announced they will show a "next-generation" 200 Mbps product at the upcoming Consumer Electronics Show.


    For More Information

    We have written for nearly three years about home networking over existing coaxial cable, especially for TV applications:

    • MoCA: Entropic Communications provides chip sets and software for networking at up to 270 Mbps. Its solution has been deployed in several products and is supported by the Multimedia over Coax Alliance (MoCA), an industry grouping that includes major cable operators and telephone companies. See Coax Networking -- An Update on Entropic and MoCA for our most recent report on MoCA.
    • HomePNA: CopperGate Communications provides chip sets compatible with the HomePNA specifications. Although HomePNA was originally designed for phoneline communications, HomePNA 3.0 also works over coax. Several companies including ReadyLinks sell HPNA 3.0 products for coax. See HomePNA -- Don't Count It Out for our report on HomePNA.
    • Topical Index: Home Networking: Coaxial Cable has links to other articles on coax networking.

    ( www.coaxsys.com ) ( www.entropic.com ) ( www.mocalliance.org ) ( www.copper-gate.com ) ( www.homepna.org ) ( www.ready-links.com )


    Your Voice -- Readers Comments

    WiMAX As A Generic Term

    In last month's article on WiMAX World, we observed that companies' were increasingly using "WiMAX" as a generic term for mobile broadband when some used to describe their technologies as "pre-WiMAX." We said we "prefer to assume good intentions and credit them for carelessly dropping the 'pre'. A less kind interpretation is that some are trying to make their product sound like something it is not."

    Steve Stroh wrote: "Good wrapup of WiMAX World. I'll vote with the 'less kind interpretation' (- I saw this type of thing repeated a NUMBER of times at WiMAX World.

    It was deliberate... so deliberate that presentations were being made about systems and technologies that simply could not be accomplished using WiMAX - only proprietary systems that cannot even be charitably considered to be 'pre-WiMAX' (which is, to me, a system that is built to WiMAX specs but has not yet undergone formal compatibility testing.)"

    Fan Mail :-)

    Our friend Jim Fitch from Cox Las Vegas wrote: "Really enjoyed this months letter. The whole site is just wonderful. Really helps me keep up."

    Another reader said: "I enjoyed reading your article 'Broadband Anywhere: The Extended Broadband Home' dated back in August 2003. I found the list of service success factors in this article particularly accurate."

    Thanks for your words of encouragement!


    Upcoming Conferences

    CES

    The Consumer Electronics Show is the biggest trade show in the US. We have found it the best place to get a sense for what technologies will be most important during the coming year. We're taking a week out of our Florida vacation to meet with more than twenty companies. We'll report on the show in the next issue of our newsletter.


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