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The May 14, 2006 Issue Provided by System Dynamics Inc.
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In This Issue

Heard on the Net

Briefly Noted
Updates, Observations and Trends

Ultra Wideband -
Real Applications Coming Soon

Cable in a Disruptive World--NCTA 2006

Initial Impressions -
DigitalDeck and Nokia 770

Your Voice -
Readers Comments


Heard on the Net

News about People and Companies Influencing The Broadband Home

People News

People

Dale Bastian was named VP of Worldwide Sales and Marketing and David Appleman was named VP of Sales, Americas at 2Wire, a provider of broadband service platforms for the DSL market . ( www.2wire.com )

Jean-Louis Bories has been appointed CEO of Xceive, a TV transceiver chip company. He previously worked for National Semiconductor. ( www.xceive.com )

Mike Casullo was named Chief Information Officer at WildBlue Communications. He was previously CIO for On Command Corp. ( www.wildblue.com )

Michael Class was named as VP, Worldwide Sales at WiMAX semiconductor company Sequans. He was previously with Exar. ( www.sequans.com )

Allison Cornia was named VP of Marketing and Communications at Digeo. She was previously at Real Networks and before that at Microsoft. ( www.digeo.com )

John Lappington was appointed President of EGT, a digital video processing equipment company. He was previously with Siliquent Technologies. ( www.egtinc.com )

Miguel Lecuona has been named Senior VP of Marketing of Grande Communications. He was previously with Nextel. ( www.grandecom.com )

Paul Malmquist has been hired as VP of Sales at Digital Deck. He was previously with Metron North America. ( www.digitaldeck.com )

Cathal Phelan was appointed CEO of wireless communications processor company Ubicom. He was previously with Cypress Semiconductor. ( www.ubicom.com )

Timothy E. "Tim" Thorsteinson was named President of Harris Corporation Broadcast Communications Division. ( www.broadcast.harris.com )


Company News

Acquisitions

Atheros Communications agreed to acquire ZyDAS Technology Corporation, a Taiwan-based fabless IC design company specializing in IEEE 802.11 wireless LANs. ( www.atheros.com ) ( www.zydas.com.tw )

Mediabolic is acquiring the assets of Digital 5, a provider of software for streaming multimedia content. Financial terms were not disclosed. ( www.mediabolic.com ) ( www.digital5.com )

Motorola is acquiring wireless device maker Orthogon Systems for an undisclosed amount. Orthogon specializes in OFDM technology for point-to-point high-speed wireless connections. ( www.motorola.com ) ( www.orthogonsystems.com )

Skype has purchased digital signal processing company Sonorit and its subsidiary Camino Networks for about $27 million in eBay stock. ( www.skype.com )

Yahoo! is acquiring Meedio, a software company that extends the function of PCs into media centers and PVRs. ( www.yahoo.com ) ( www.meedio.com )

Funding

Aperto Networks completed a Series E follow-on financing round of $26 million, bringing the company's total capitalization to $120 million. ( www.apertonet.com )

dotPhoto closed a $3.5 million second-round equity commitment bringing the cumulative investment to $7.5 million. ( www.dotphoto.com )

Imagine Communications, a new digital video technology company, completed a $9.2 million first round of venture funding. ( www.imaginecommunications.com )

Meru Networks raised a $25 million Series C led by Lehman Brothers Venture Partners. ( www.merunetworks.com )

Veoh Networks has raised $12.5 million in a second round of venture financing. The company is building an "Internet television peercasting network" for publishing and watching videos. Both Michael Eisner and Time Warner have invested. ( www.veoh.com )

ViXS Systems, a developer of video processing and networking chipsets, completed its Series E financing round totaling $18 million. ViXS video processors are being integrated into consumer electronic and PC products from companies like Sony and Hitachi. ( www.vixs.com )

VMix Media, a provider of video sharing services, has raised $5 million in first round financing. ( www.vmix.com )

Widevine, a provider of downloadable content protection, has received a $16 million investment from Cisco, Telus and a group of VCs. The company has over ninety telco, cable, satellite and internet service operator customers. ( www.widevine.com ) ( www.cisco.com ) ( www.TELUS.com )


Other News

Alcatel has been selected to launch a WiMAX trial in the Tokyo area in June. The system will operate in the 2.5 GHz frequency band. ( www.alcatel.com )

Aloha Partners--which claims to be the largest owner of 700 MHz spectrum in the US--has formed a new subsidiary named Hiwire, which is teaming with SES Americom for a satellite-based mobile TV network. The company also appointed Scott Wills as president and COO of the new subsidiary. ( www.alohapartners.net ) ( www.ses-americom.com )

AT&T has announced a content deal with Akimbo Systems to offer on-demand TV programs and movies to AT&T's Homezone customers. Homezone is AT&T's video offering for DSL users, which will provide a set-top for TV programming from Dish Network and Internet-based services from providers like Akimbo. Homezone is based on hardware supplied by 2Wire, including their MediaPortal. [Editor's note: We reported on 2Wire's MediaPortal for video following a site visit--see Integrating the Missing Piece: 2Wire Does Video (BBHR 4/26/2004)]. ( www.att.com ) ( www.akimbo.com ) ( www.2wire.com )

The Cloud, a wireless LAN hotspot and hotzone provider in the UK, Sweden and Germany, has launched UltraWiFi, an unlimited flat fee pricing scheme that also includes wireless VoIP calls. UltraWiFi will be available starting in July for £11.99 a month with a 12 month subscription, and £11.99 a week on a pay-as-you-go basis. The Cloud will launch this tariff with a number of major partners, as well as offering it directly. They currently support service providers such as BT, O2, Skype, Vonage and Nintendo. ( www.thecloud.net )

Iliad SA, the French telecom company offering services under the brand Free, launched a new set-top box. It adds high-definition television and unlimited calls over a Wi-Fi-equipped mobile to its previous bundle. Iliad, which previously purchased national 3.5GHz spectrum from Altitude Telecom, plans to offer WiMAX-based services to its 1.6m customer DSL Free customers soon.

Lucent and Telefonica Group announced an agreement for Lucent to assume responsibility for future development and deployment of Telefonica's "Imagenio" IPTV middleware platform and market the platform to the global service provider community. Lucent's service arm will act as prime network integrator in markets including Brazil, Chile, the Czech Republic and Spain, where Lucent is establishing IPTV R&D centers for testing and integration. ( www.lucent.com ) ( www.telefonica.com )

picoChip has announced an HSDPA/HSUPA home basestation modem reference design. The home basestation (femtocell) supports cellular calls locally, and uses broadband to carry traffic to the operator’s core network. Since it is a standard 3G basestation, it operates with all existing 3G handsets rather than requiring upgrades to dual-mode 3G/Wi-Fi devices. It is designed to allow cellular operators to counter competitive offers such as those based on UMA and VoWiFi. ( www.picochip.com )

Skype announced it has more than 100 million registered users worldwide. ( www.skype.com )

TeleCIS Wireless introduced their TCW 1620 WiMAX SoC chip which will be the foundation for both low-cost, indoor “self-installed” customer premises equipment (CPE) for fixed WiMAX services as well as for "portable” services. ( www.telecis.com )

ViXS Systems announced that NVIDIA has selected ViXS' XCode II video processor for its DualTV Media Center Edition tuner card; the card provides a media center PC with advanced capabilities such as PVR with dual channel capabilities, very fast transfer of movies to a DVD, and high quality encoding at low bit rates. ViXS also announced its newest video processors, which support high definition transcoding capabilities; Hitachi is using these to create HDTVs with an integrated hard disk drive. ( www.vixs.com ) ( www.nvidia.com ) ( www.hitachi.com )

WildBlue Communications has signed a non-exclusive agreement with AT&T to sell WildBlue's broadband Internet access service beginning later this month. The branding will be "AT&T High Speed Internet Access, powered by WildBlue." WildBlue will provide equipment management, installation and distribution services to AT&T for its satellite service customers. ( www.wildblue.com ) ( www.att.com )


Standards, Alliances and Trade Associations

The Multimedia over Coax Alliance (MoCA) announced the addition of STMicroelectronics and Conexant Systems to the list of silicon vendors supporting MoCA. ( www.mocalliance.org ) ( www.st.com ) ( www.conexant.com )


Briefly Noted: Updates, Observations and Trends

Each month, we collect miscellaneous happenings, studies, trends or observations you might have missed. This month we feature more on muni Wi-Fi, some broadband statistics, BPL testing in California and a couple of fun applications.

Muni Wi-Fi -- A St. Cloud Update

About 18 months ago, we wrote about the St. Cloud free municipal Wi-Fi project. Jonathan Baltuch, one of our readers, is spearheading the project and had previously filled us in; we visited St. Cloud to get first-hand information to our readers. As of March, 2006, St. Cloud has rolled out free Wi-Fi to the whole town. See this update from Jonathan.

Municipal Wi-Fi has spread virally across the US and around the world. Although these projects have been multiplying rapidly, the playing out is still unclear from the perspectives of business model, technical capabilities, satisfying customer expectations, legal considerations and the role of established providers.

Broadband by the Numbers--OECD Report

A survey from the Organization for Economic Cooperation and Development (OECD) reports that Iceland has passed South Korea for the highest concentration of broadband users. The top four countries--Iceland, Korea, the Netherlands and Denmark--all have more than 25 subscribers per 100 inhabitants. Although the US has lower per capita penetration, it has the largest total number of broadband subscribers in the OECD at 49 million. US broadband subscribers represent 31% of all broadband connections in the OECD. ( www.oecd.org )

More Numbers--IGI Telecom Economy Report

IGI has released a report by Clif Holliday on First Quarter 2006 High-Speed Access in the US, saying

  • DSL represents over 44% of total US High Speed Access, up from 34% at the end of 2002
  • High Speed Access reaches 44% of households, up from 19% at the end of 2002; this is almost 48 million households, up from 20 million at the end of 2002
  • and forecasting that Telco DSL will pass Cable in terms of US broadband penetration by the end of 2006. ( www.igigroup.com )

Broadband Over Powerline

Things have been relatively quiet on access BPL in the US, but the California Public Utilities Commission just agreed to allow statewide BPL testing. Electric utilities and other companies in California can begin BPL projects, as long as they follow affiliate transaction rules and secure the power distribution system from harm. Sponsors of the rules believe that power companies will represent another competitive option for Internet access. ( www.cpuc.ca.gov )

Making Wine With Wireless (What Comes After the iPod?)

Pro Vina has announced the Wine Pod, a personal use winery controlled by an on-board computer and built-in wireless networking. You load the software on your computer which communicates wirelessly to the Wine Pod. The personal winery coaches you at each step in the winemaking process. For $2000 it might make a great Father's Day gift, but there is a waiting list. ( www.mywinepod.com )

Personalization with Meez

Sean Ryan, formerly CEO of Listen.com, whose Rhapsody service was bought by RealNetworks, has a new venture. Meez.com is a way of creating personalized 3D avatars to jazz up users online interactions. Donnerwood Media is the online entertainment company that has created the service, which is targeted largely to teens and college students. Although wildly outside the target demographic, Sandy is having a good time creating and changing her Meez. ( www.meez.com )


Ultra Wideband -- Real Applications Coming Soon

More than four years after the FCC issued an order setting the rules for ultra wideband (UWB), volume products are close to market. We think this will have a major impact on the broadband home, and are taking this opportunity to update our readers on what is coming.

In Ultra Wideband (UWB): An end to all those cables! (BBHR 1/24/2005), we wrote "UWB advocates agree on the goals: to create "personal area networks" connecting many devices together at very high speed. These goals are similar to Bluetooth...but operating at a much higher speed. Picture a PC and its peripherals (keyboard, mouse, printer, scanner) plus digital cameras and camcorders all connecting together automatically whenever they come in range of each other."


Background

UWB uses a very weak signal over a very wide frequency band; more familiar wireless technologies send a strong signal over a much narrower band (Wi-Fi uses 20 MHz channels). The FCC's 2002 order established a "spectral mask" that defined the maximum emission limit across the spectrum. The order opens a very wide band (3.1 to 10.6 GHz) for use by UWB; requires that transmitters occupy at least 500 MHz at any time; and sets an emission limit so low that UWB looks like noise to other users of the same spectrum. Because UWB works at such low power, it only operates close-in, typically within a single room.

UWB is not a single technology--there are many ways to modulate signals and stay within the FCC's rules. Many approaches have been proposed, and at least three distinct technologies have been brought to the chip level with demonstrations of devices and applications. All share the goals of providing very high speeds (100 to 480 Mbps) over very short distances.

In early 2003 the IEEE formed Task Group 802.15.3a to resolve the conflicting proposals and come up with a single standard for "personal area networking" (PAN) based on UWB. The task group moved quickly to reduce many proposed technology alternatives to two proposals. As we discussed in the earlier article, the companies backing these approaches grouped into several competing organizations. The Multiband OFDM Alliance (MBOA) and the WiMedia Alliance favored an approach called MB-OFDM, while the UWB Forum favored DS-UWB and had working chips and prototype products at CES in 2005. The IEEE process drifted into a deadlock, with neither camp able to muster enough votes to resolve the conflict, but each having enough to block the other. Early in 2006, the IEEE task group gave up, and voted itself out of existence.

With the breakdown in the standards process, the technology players pursued their own courses. Freescale Semiconductor continues to promote chips based on DS-UWB. Pulse~LINK, one of the UWB pioneers, recently announced a UWB chipset operating at Gigabit per second speeds, with a single chip supporting communications over the air, on coaxial cable and over power lines.

But most of the activity has been with MB-OFDM. In 2005, the two MB-OFDM groups joined forces under the WiMedia Alliance name. Seeing that the IEEE process was unlikely to result in a standard, the members started working to bring to market products based on their draft proposals. These first WiMedia products are expected to reach the market later this year.

WiMedia has attracted many key players in the IT and CE worlds. The "promoter members" include household names like Hewlett-Packard, Intel, Kodak, Microsoft, Nokia, Philips, Samsung and Sony.

WiMedia has worked hard to draw support from other industry associations. Organizations representing USB, Bluetooth and 1394 technologies have all endorsed WiMedia's UWB as the high-speed close-in radio technology.


Certified Wireless USB

Certified Wireless USB will be the first volume product incorporating WiMedia UWB. Its stated objective is "to preserve the functionality of wired USB while also unwiring the cable connection and providing enhanced support for streaming media CE devices and peripherals." Its "performance is targeted at 480Mbps at 3 meters and 110Mbps at 10 meters." Other UWB technologies could be combined with USB, but only WiMedia UWB has been endorsed by the USB Implementors Forum (USB-IF), which promotes USB and tests and certifies USB products for compliance and interoperability.

Any device that now uses USB 2.0 could be upgraded to add wireless USB as well. This is especially attractive for devices that are normally used untethered - such as digital cameras, MP3 players, and remote controls. We have often found ourselves on the road and discovering that we've left the special USB cable for our digital camera at home; wireless USB would remove the problem since both the camera and the laptop would have wireless USB built in.

There are more than 2 billion legacy wired USB connections in the world today. All new systems are equipped with USB 2.0 which operates at 480 Mbps. Wireless USB runs at the same speed and uses all existing USB firmware so a device already equipped with USB 2.0 can be easily upgraded: the manufacturer can leave the wired connection in place and add a WiMedia UWB radio.

For an update on wireless USB, we talked on the phone with Jeff Ravencraft, Chairman/President of USB-IF. At CES in January 2005, Jeff gave a talk about wireless USB "Wireless USB Initiative: First Hi-Speed WPAN Interconnect" (Adobe Acrobat PDF, 4.7 MB) in a panel Dave moderated. At that show, we saw prototype UWB products and heard predictions that products would reach the market by the end of 2005. In January 2006, we again saw many prototype WiMedia and wireless USB products at CES, and heard similar predictions for 2006.

We asked Jeff why it is taking so long to get products to the market. He said USB-IF was following a very deliberate path to market: "We're following the exact same model as USB 2.0. We know this story better than anybody. We're not going to market with pre-standard products--we're certifying right from the get-go so when the consumer buys one they know it will work. The products will be compliant to the specs - and interoperable - they're all going through the compliance/certification program."

Others have told us that initial certified products will reach the market later this year, perhaps as early as this summer, and that CES 2007 would have many real products. Jeff agreed that "CES will be a big opportunity." He thought the market would respond very positively: "This is a no-brainer for people--the user models are already there, consumers are already educated about being wireless and untethered. The irons are hot and the marketplace is ready."

At the recent CES, we saw several demos of wireless USB "dongles": devices that plug into a USB port and provide a wireless USB connection. Jeff said initial products will include host wire adapters (HWA) that plug into external USB 2.0 connectors on PCs, and adaptors based on PCI and PCI Express that are installed inside PCs. There will be device wire adapters (DWA) that connect to USB ports on devices such as digital cameras, and will also be built into USB hubs.

We asked Jeff how quickly wireless USB will be built into new PCs. He didn't want to be specific: "in my day job I work at Intel, so I won't make product announcements." But he suggested that PC manufacturers would start to incorporate PCI Express wireless USB cards in new PCs "before year end" and start to include UWB radios on motherboards during 2007.

UWB is currently approved by regulators only in the US. We asked Jeff how quickly UWB will move into markets outside the US. He pointed out that although the IEEE standards process reached a dead end, ECMA International--an IT-centered standards association based in Geneva--has issued two standards for UWB based on WiMedia. Jeff said ECMA submitted these standards--ECMA 368 and ECMA 369--to the ISO in January, and they are being "fast tracked" as global standards with approval expected this year. Both Japan and the European Commission are working on spectral masks for UWB, with approval expected before the end of the year. There will probably be different spectral masks in different parts of the world (just as there are different operating frequencies for Wi-Fi), but WiMedia is capable of adapting to the different masks: "we will have a standard for radios adaptable to any geography."

Every new PC now comes equipped with USB 2.0, and a wide variety of peripherals now incorporate USB. As wireless USB goes into PCs--probably soon into every new PC--it seems inevitable that more and more devices will add the technology. With more than 2 billion wired USB connections, it seems likely that in a few years there will be a billion or more wireless USB connections.


The Chip Maker's View--An Interview with Alereon

To get another view of WiMedia UWB, we talked on the phone with Eric Broockman, CEO of Alereon, a fabless semiconductor maker that's one of the UWB pioneers. We asked him whether he thought wireless USB would do away with cables, and he said "cabled USB provides power to devices, wireless provides mobility" so he thought most new devices would support both for a long time to come.

We asked how much cost UWB adds to devices. He said it initially will add $15 to the bill of materials (BOM), but the price of chipsets will come down as volumes build. Moreover, the BOM cost includes both PHY and MAC, but over time only the physical layers of UWB--the RF and PHY layers--will remain in hardware. "The MAC layer will disappear into SoCs, and it's half of the cost."

Eric thinks the first markets will be PC adapters and wireless hubs, and embedded products will follow. He thinks the early market will be in late 2006, with "high end cell phones and others" following in 2007. He predicts we'll see UWB built into PCs for the Christmas 2007 market with 2008 as "the breakout year"; by 2009 we'll see UWB as a standard feature in a third to half of new PCs.


The "Single Radio"

Eric pointed out that by 2008 UWB will be used for more than just USB. The 1394 Trade Association (1394TA) started working with MBOA and WiMedia in 2004 to develop "wireless 1394" using WiMedia UWB radios. The Bluetooth SIG has selected WiMedia UWB to add "a high speed/high data rate option" to Bluetooth. WiMedia UWB will also be used for TCP/IP applications.

WiMedia UWB Platform --> Click for larger pictureWiMedia has a nice diagram that illustrates how four upper-level protocol stacks--USB, Bluetooth, 1394 and TCP/IP--will operate with a common WiMedia UWB radio platform. Each of the four stacks is interfaced to the common UWB radio through a Protocol Adaptation Layer (PAL). Since each of the stacks and PALs is just software on top of an existing UWB radio and software, once wireless USB is built in there's almost no added cost to add the three other stacks. Thus UWB is positioned to become the "single radio" used for all applications where devices are relatively close to each other.

If wireless USB succeeds in the market, over time it's likely that every PC--desktop and notebook--will have a UWB radio and all four protocol stacks. Individual devices will select the higher-level stacks most suitable for their applications -- USB for printers, cameras and MP3 players; Bluetooth for phones; 1394 for video players; and TCP/IP for near-in communications between PCs.

Alereon perspective on Bluetooth --> Click for larger picture

Alereon's presentation shows how some of these devices might communicate once UWB is widely deployed. PCs and peripherals will communicate with wireless USB. Advanced cellphones will use Bluetooth-UWB to communicate with each other and with PCs, while using traditional Bluetooth for low-speed devices such as headphones. Portable video devices could transfer video to projectors and TV sets using either USB or Bluetooth.


Might Security Be a Fly in the Ointment?

As we talked with the people who are deeply involved in developing and promoting UWB, we came away convinced that it will play a very important role in the future of home communications, clearing away the maze of different cables now required to interconnect electronic equipment. But we expressed concerns that UWB is coming to market without any practical home experience.

Most communications technologies go through an early phase of field release before everyone has agreed to standards and tested for interoperability. This happened with Ethernet, earlier versions of 802.11, USB, and many others. It was a messy process, and inevitably many issues appeared. Only after this early field shakedown did we see agreement on finished standards, certification testing, interoperability plugfests, and approved logos.

By contrast, there has been no field testing of UWB. We will very soon see millions--and maybe then billions--of units in the field. Given the rigor USB-IF is bringing to the process, it's very likely the products will be interoperable. Our concern is how well they will work in the real world.

Perhaps our biggest concern relates to security. The "single radio" approach is extremely appealing--but fraught with risk if there turn out to be security gaps similar to those already encountered with 802.11 and Bluetooth.

The security model used in wireless USB is built on that used with the current cabled USB. The wire plays two key roles in providing security: the spec says it "connects the nodes the owner/user specifically wants connected" and "protects all data in transit from casual observation or malicious modification...". The wired USB specs do not include any level of security beyond the inherent security of the wire. "The goal of USB Security is to provide this same level of user-confidence for wirelessly connected USB devices."

We discussed this with a security expert who raised several issues after reading the specifications. He observed that the security mechanisms are built on the experience gained from Wi-Fi and Bluetooth. His major concern is that these mechanisms appear most suitable for short-term communications between devices; they're not designed to set up a channel that may last for months, such as the USB connection between a PC and a printer. There does not appear to be a requirement for periodic rekeying, so someone who wants to crack a key could see the same key in use for a long time. If someone did crack a key, there's almost no limit to the damage they could wreak, especially if keyboards and mice adopt wireless USB for connection to PCs.

We certainly hope these concerns prove unfounded. We expect to test these wireless USB devices later this year and will watch to see if the advocates are right in their predictions of widespread success.

( www.ieee802.org/15/pub/TG3a.html ) ( www.uwbforum.org ) ( www.freescale.com ) ( www.pulselink.net ) ( www.wimedia.org ) ( www.hp.com ) ( www.intel.com ) ( www.kodak.com ) ( www.microsoft.com ) ( www.nokia.com ) ( www.philips.com ) ( www.samsung.com ) ( www.sony.com ) ( www.usb.org/developers/wusb ) ( www.usb.org ) ( www.ecma-international.org ) ( www.alereon.com ) ( www.1394ta.org ) ( www.bluetooth.com )


Cable in a Disruptive World--NCTA 2006

The video world is undergoing a radical transformation. Virtually every aspect of the traditional video service provider model is being challenged:

  • Who packages the video content? Who creates it? How is it paid for? Who bills for it--if anyone?
  • What device is video content viewed on? Where is it viewed? When is it viewed?
  • What media are controlled or displayed via the TV? What equipment does the TV connect to? How can the consumer see and select from all the available media choices, in a way that is simple and understandable?
  • How is the video coded and technically brought to the user? What new or different services or features does that enable?

The 2006 National Show (organized by the NCTA) was bubbling with these changes and reactions to them. They were discussed in formal sessions, talked about by attendees individually, and visible in many of the new products or capabilities being offered to cable operators (MSOs).

The video announcements and products divide into two categories. The first is video distributed by a video service provider such as a cable operator. The second is video (often from non-traditional sources) that rides "over the top" of broadband providers' data services. A similar division exists today in VoIP services, which divide into those provided by MSOs and managed to control voice quality, and those like Vonage, which ride on top of broadband operators "best efforts" data services. MSOs earn revenue from the video and voice services they distribute, but not from "over the top" services.


At the Sessions

Ann Sweeney, President of Disney-ABC Television Group --> Click for larger pictureIn the "View from the Top" session with top executives from the cable industry, Anne Sweeney, President of Disney-ABC Television Group, announced that ABC will stream free episodes of four top ABC prime-time series online at ABC.com. Episodes will be available the next day and archived for season viewing. Viewers can fast forward content but will be unable to skip commercials. Her announcement illustrates the changing business model for video content, the role of IP delivery and the home computer, and new arrangements with advertisers. Currently planned as a two month trial, it changes the business model by going directly to the consumer rather than via business arrangements with service providers, and represents one of the many "over the top" video services.

Sweeney was not the only content provider thinking about more business opportunities for their content. In another session, NBC Universal Cable's President, David Zaslav, also talked about reaching beyond the traditional broadcast and cable TV markets. After the show, NBCU announced it had formed a new business unit, the Technology Growth Centre (TGC), to focus on opportunities in digital media, and named Darren Feher, their Chief Technology Officer, to run it.

IPTV and the telcos were the subject of many discussions. A panel of four CTOs of major MSOs addressed the topic of competition from the telcos. These services are similar to the ones provided by MSOs in that the telcos are both the content and transport providers and can control the quality of the service. The spirit of the CTO discussion could be represented by a comment by Dave Fellows of Comcast: "There’s nothing they (telcos) can do that we can’t do.”

NCTA 2006 Show floor --> Click for larger pictureMany of the exhibits on the show floor illustrated the changes in the cable industry. Interspersed with the usual exhibits of cable channels and the latest in set-top boxes were new user interfaces, new ways to deliver video, and video on devices beyond the TV set.


Linking Internet and TV Content

On the show floor, ICTV unveiled a new architecture, called ActiveVideo Distribution Network, that links Internet content to live TV and VoD content. It uses cable's VOD infrastructure and any VOD-capable (digital) set-top and is navigated with standard remotes. The company promotes it as providing viewers "the best of both worlds: selecting and interacting with programming like on the Internet, but using a standard remote and enjoying TV video quality and responsiveness."

ICTV's user-customizable video mosaics --> Click for larger pictureAt the show we spoke with Ed Forman, EVP and COO of ICTV. Ed had been with ICTV from 2001-2004 and then was co-founder and CEO of Switched Media, which developed solutions for mass customization of live video streams. In 2006 the two companies merged in a marriage that seems to have blessed both groups. Switched Media's software enables processing and manipulation of compressed digital video streams without the inefficient and expensive decode and re-encode cycles. Combing this technology with ICTV HeadendWare resulted in the ability to blend interactive content with live video streams. These capabilities are behind a number of new ICTV capabilities, including end-user customizable video mosaics for improved video-based navigation. The mosaic provides live video from, and navigation through, multiple channels simultaneously. The technology permits the mosaics to be put together by end-user, operator or programmer choice, or automatically in response to a user's viewing habits.

ICTV is also pitching this to service providers other than cable. Their Web site says AVDN uses "existing Internet and on-demand infrastructure to deliver the broadband video experience to tens of millions of cable, IPTV and mobile viewers."

Prior to the show, ICTV signed up DriverTV and subsequently announced an agreement for AccuWeather to use the capability to deliver a fully interactive TV channel for weather. AccuWeather will be able to provide personalized, interactive content, including searchable local forecasts, animated satellite-generated weather maps and local television weather broadcast programming.


"Any Content, Any Device, Any Place, Any Time"

The total vision of most service providers, including those in cable, is to provide "Any content, any device, any place, any time". Many consumers have been introduced to elements of this vision by innovative customer premises equipment: "time shifting" by devices like TiVo PVRs, and "place shifting" by devices like Slingbox. Used together, they allow viewers to watch their own TV programming--cable, satellite or digitally recorded--from any place in the world.

Device Shifting

There has been an increasing focus on the second element: transporting content from one device to another. Examples include TiVoToGo, which facilitates the transfer of TV video content from the PVR to a portable media device and PocketDISH, which permits users to transfer up to 20 hours of programming from DISH Network DVRs to the PocketDISH portable media device. As smaller and less power hungry mini-drives become more widespread, we expect to see them integrated into mobile phones, which will serve a similar purpose.

Although these capabilities originated in stand-alone equipment and services, MSOs have been creating ways of offering them as part of their service bundle, generally without requiring the customer to buy their own special purpose CPE.

Network-based Time Shifting

Network-based time shifting gives viewers control over live programming by providing DVR-like functionality without needing to purchase DVRs. Cablevision has spoken about their successful trials of network-based PVR. A solution from BigBand Networks and Concurrent was demonstrated at the show and has recently been deployed by "a major North American cable operator".

Time Warner is currently offering an advanced feature called "Start Over", which depends upon network-based storage. It allows a digital subscriber to restart a program from the beginning - complete with commercials.

Place shifting

Motorola introduced "Follow Me TV media networking capabilities" in its small new digital set-top, the DCC100. They demonstrated the relatively straight-forward linking of the DCC100 to a Motorola DVR set-top through existing in-home coaxial cable, bringing video from the DVR to additional screens in the home. They also demonstrated the capability to move recorded shows from a Motorola DVR to a Motorola mobile device like the next-generation RAZR V3x. This "Follow Me TV" technology would enable consumers to look at TV listings on their cell phones and schedule recordings at home. Initially this will be only for Motorola mobile devices and must be preceded by agreements between cell-phone carriers and cable TV operators; it also will need models for selling the service, such as add-ons to cable TV or individual transactions, and requires rights to be negotiated for TV programs and movies.

Lucent demonstrated a more robust vision of place shifting in which cable operators could allow their video customers not only to take the video with them on portable devices, but also to allow them to view their cable content at someone else's home. The concept demonstration, provided to us by Tomas Nores, VP Cable Solutions, showed how MSOs would be able to extend their video customer relationship from inside the home into the broader world.

MSOs are already extending their customer relationships outside the home for voice and data services, through relationships like the Sprint partnership with Time Warner, Cox, Comcast and Advance Newhouse. Extending the video relationship beyond the home is consistent with this direction. The biggest obstacle to be overcome could be MSO's current contracts with content providers which generally have geographical limitations. The contracts would have to be renegotiated before services could be introduced to extend video outside the home.

CableNet Booth --> Click for larger pictureMatt Tooley of CableMatrix --> Click for larger pictureIn the CableLabs CableNet pavilion, Matt Tooley, CTO of CableMatrix Technologies, demonstrated how a cable operator could combine their technology with Slingbox to enhance the viewing experience for the remote viewer. This enhanced (and extra-cost) service would make additional upstream bandwidth available on the cable network and would also control latency and jitter. CableMatrix supplies the PacketCable Multimedia-based policy management platform that allows implementation of real time QoS and bandwidth management. MSOs would extend their reach by providing service to their users even when they are not on their home network.


TV Services on the PC

"TV on the PC" can have multiple meanings. Here we are speaking about receiving the same content you would get from a service provider, and having it delivered in real time from broadcast sources to your PC.

The cable and computer industries both have a strong interest in being able to support premium, digital content on the PC. The goal is to allow consumers to attach their coax cable from the wall right into their PC. Many Microsoft Windows Media Center PCs already have a receiver board, but cannot receive "premium" content such as HBO, which is encrypted to prevent unauthorized use. Many new TVs come equipped with a slot for a "CableCARD" provided by the cable operator (supporting the operator's conditional access system) so they can receive premium content without a cable box.

The OpenCable Unidirectional Receiver (OCUR) extends this capability to new PCs. OCUR is a new Cablelabs specification for products which will allow Media Center PCs running on the upcoming Windows Vista operating system to receive High Definition premium digital cable TV on the PC via high-speed connections and without a separate set-top box.

Any vendor that wants to build an OCUR device must take it through a CableLabs certification process. This verifies that the device transforms content protected by cable's conditional access into content protected by an approved digital rights management system (DRM). CableLabs has approved both Microsoft's Windows Media Digital Rights Management (WMDRM) platform and RealNetworks's Helix DRM for OCUR. OCUR-enabled Media Center PCs will be equipped with a CableCARD slot so the operator can provide a CableCARD to authorize digital services on the PC.

ATI's OCUR design --> Click for larger pictureIn the CableNet area at the show, John Swimmer of ATI Technologies and Mike Morrison of Microsoft demonstrated ATI's OCUR (HD) digital cable PC receiver which will be on the market when Vista launches early next year. They said the entire system as shipped by the OEM has to meet CableLabs criteria, so only new PCs from certified vendors will accept a CableCARD and the ATI product will only be available in OEM systems.

Virtual Digital Cable (VDC), which has just launched its service, represents a different way of delivering video services on the PC. At the NCTA show, we met with Bob Heymann (Chairman) and Mike Wolf (President/CEO) to understand their model. VDC provides IP-based multi-channel live and on-demand television broadcasting. It is a browser-based system that works with Windows PCs and Windows Mobile PDAs and smartphones, using the Windows Media Player embedded in the browser to play the streaming video. Content is obtained from VDC by buying a subscription, which costs $11.95 per month. All support is done by email; there is no phone support.

VDC's current channel selection is very limited and some, such as BBC America, Travel, Discovery and TLC, are only available on PDAs and smartphones. We expect these content providers would be reluctant to make their channels available in ways that conflict with their existing distribution channels.

In a separate but related effort to put video services on the PC, Time Warner has a trial in the San Diego area, called "Broadband TV". It delivers their expanded basic tier (but no premium services) via IP to the PC. It uses Real's DRM, media player and streaming servers to provide the service.


What's Displayed and What's Connected?

The Digeo booth provided an excellent opportunity to see one company's vision of what types of media will be displayed on the TV and what devices the TV will connect to. We met with Digeo's Mike Fidler (CEO) and Greg Gudorf (President and COO) to learn more about their current direction; both came from Sony within the past year, and have added other strong talent to the team.

Digeo has been focused on their Moxi Media Center products since Digeo acquired Moxi in 2002. While the company tends to be thought of as a provider of integrated set-top hardware and software, their core competence is in software and user interfaces. Digeo's initial deployments were with Charter Cable--Paul Allen is chairman of both companies.

Moxi's user interface --> Click for larger pictureMoxi's user interface provides an easy-to-understand, integrated view of all available video media. The guide shows both live and PVR-recorded video, using color to distinguish between the two (blue is live, gold is PVR). In addition to search by channel, time and title, the search feature also searches using any word or phrase in the show information. The "ticker" allows a user to select a topic and display information of particular interest to the viewer, such as sports scores or stock prices, along the bottom of the screen. Rather than asking users to populate a "favorites" list, the system populates the list based on what the user has viewed over time. For Digeo, "the User Interface is King" and easy access to any media is the target.

Digeo's Moxi Mate --> Click for larger pictureFor the cable industry, the Moxi Media Center provides a multi-room HD DVR solution and hub for whole-home distribution of digital entertainment. The master set-top box is connected over existing coaxial cable to a small Moxi Mate box in another room. Digeo says the $79 Moxi Mate provides the same user interface and "the full DVR experience" in the second room at a much lower cost than an additional set-top box. The current version of the Moxi Mate operates via analog signals and supports only standard definition; a promised Moxi Mate II will support high definition in up to three additional rooms.

Digeo demonstrated on-screen telephone features and access to PC-based MP3 music, photos, games and video libraries. Digeo also showed a USB-connected storage drive to provide consumers with greater storage capacity; subscribers will be able to purchase off-the-shelf hard disk drives and connect them to the Moxi Media Center through a USB 2.0 port. Moxi also has dual-tuner capability for HD (High-definition) video signals and allows two digital channels to be recorded simultaneously. This is a step beyond what is provided by CPE such as TiVo, which has announced dual-channel recording in which only one of the channels can be digital.

Other demonstrations included synchronization for "video on the go", IM on the TV, product placement and advanced advertising capabilities and the ability to customize skins.

Moxi with OCAP --> Click for larger pictureFidler and Gudoff said Digeo is focused on applying its core technologies to new markets and opportunities. In addition to new Moxi set-tops, their booth contained OCAP-compatible versions of the Moxi TV interface and guide running on multiple hardware platforms, including set-top boxes and TV sets. They are also developing products for telcos--their IPTV Media Center acts as a multi-stream SD DVR over DSL and a multi-stream HD DVR on a fiber-to-the-home network.

Digeo has been targeting the service provider market, and claims to have deployed 325,000 Moxi boxes. Digeo's products are more expensive than some other choices; the company says the additional cost is worth it because customer satisfaction results in a 25% improvement in churn over a conventional DVR, and the box can generate additional monthly revenue from some of the applications it enables.

Since cable operators tend to be very cost sensitive, we were not surprised when Fidler and Gudoff hinted that the consumer retail market might be next on their horizon. We like the Moxi user interface and would love to play with one in our house.


More Since the Show

News continues to pour out regarding the disruptions in the video world. A few examples:

  • Writer, actors and directors are getting on board with respect to putting their video content on platforms other than the TV. Disney-ABC TV's Touchstone Television is putting in place new agreements for future mobile content with these groups. The Writers Guild of America (WGA), the Screen Actors Guild (SAG) and the Directors Guild of America (DGA) reached agreement with Touchstone Television to produce Lost Video Diaries. The mini-episodes are inspired by ABC's popular series Lost and are being created for release on mobile devices.
  • Media that used to be dedicated exclusively to TV video are incorporating listings for video available for the PC. TV Guide Magazine has launched a "Downloads" column covering television shows available for download or online viewing each week. Gemstar-TV Guide International said the column will "provide guidance and ‘tune-in’ information for viewers who want to be able to know where on the Web they can find their favorite programs so that they can watch them at times, and in ways, other than on first-run television or through on-demand."
  • AT&T signed a distribution deal with Starz Entertainment Group for its Vongo Internet movie delivery site. AT&T and Vongo are building a co-branded site to market the service to AT&T's 7.4 million DSL customers. AT&T high-speed-Internet customers will be offered a special 14-day free trial of the service. After that, customers who opt to sign up will pay $9.99 monthly for unlimited access to Vongo’s library of more than 1,500 movie and video titles and a live streaming Starz TV channel. In addition, popular pay-per-view titles will be offered for $3.99 each. Vongo subscribers can download the video selections on as many as three devices they choose when they set up their account.
  • Last week, TiVo announced a deal with BrightCove, an Internet startup, to deliver videos to a TiVo box and display them on the TV. This will bring Web videos to the TV without going through a PC.

In Summary

There were other big topics at this year's cable show--OCAP-compliant cable boxes, IMS, simulcast, targeted advertising, and more--but we have chosen to focus on cable's core business, entertainment video. The future will bring even more entertainment content, going over more networks and playing on more devices. There will be will increasing competition for the consumer's mindshare and entertainment dollars and the advertiser's budgets. Consumers will see increasing choice but also dizzying confusion.

MSOs will need to be nimble and adapt many aspects of their business to this new environment--technology, marketing, customer service, content agreements, retail relationships and more. Good user interfaces will play a major role: integrated electronic program guides will be critical in helping consumers to make sense of the range of content choices and the many ways of receiving them.

( www.thenationalshow.com ) ( www.ncta.com ) ( www.disney.com ) ( www.nbcunicable.com ) ( www.comcast.com ) ( www.ictv.com ) ( www.accuweather.com ) ( www.tivo.com ) ( www.slingmedia.com ) ( www.cablevision.com ) ( www.ccur.com ) ( www.timewarner.com ) ( www.lucent.com ) ( www.cablelabs.com ) ( www.cablematrix.com ) ( www.microsoft.com ) ( www.realnetworks.com ) ( www.ati.com ) ( www.vdc.com ) ( www.digeo.com ) ( www.charter.com ) ( www.tvguide.com ) ( www.att.com ) ( www.starz.com ) ( www.vongo.com ) ( www.brightcove.com )


Initial Impressions -- DigitalDeck and Nokia 770

We use our home as a testbed for new technologies, and are now testing several more. We report here on our first impressions of an innovative system for multi-room video, and a new mobile Internet terminal.


DigitalDeck

For five years, we have been looking for a good way to distribute video around our house. We have TVs in five rooms, cable boxes in three rooms, and DVRs in two rooms; we also have several PCs we've long planned to use as video servers. We often find that we have video sitting on a hard drive in one room when we'd like to watch it on a screen in another room. We've looked at many potential solutions and hadn't found one we wanted to install in our house.

Several years ago, we met with DigitalDeck, a Silicon Valley startup. In DigitalDeck -- Another Piece of the "Whole Home Networking" Puzzle (BBHR 12/14/2003), we reported the company's promise "to bridge the gap between your PC and TV, and allow your household DVDs, VCRs, PVRs and computers to share and play video on any television anywhere in the home."

The DigitalDeck product is very ambitious. It takes analog video from any source--cable or satellite box, PVR, DVD, VCR--combines it with digital video from the PC, and distributes it over a home network to any TV in the house. With a single remote control on any TV in any room, you can view and control any video source in the house.

DigitalDeck in our kitchen --> Click for larger pictureIt has taken DigitalDeck a while to get their product to market. But a few weeks ago we finally received three of their boxes and the necessary PC software. We now have it all hooked up and running--with software installed on one of our PCs, and Media Connector boxes connected to TVs in our kitchen, master bedroom and family room. The system is controlling three cable boxes, two PVRs and a DVD player.

DigitalDeck Remote Control --> Click for larger pictureWe encountered a few problems getting it set up--nothing that a few phone calls and emails couldn't resolve. Last Tuesday night, we enjoyed being able to eat dinner in our kitchen while watching the Sopranos episode recorded Sunday night on the TiVo in our bedroom. That's what we've wanted for many years.

DigitalDeck has been accepting "pre-orders" and we understand they will start shipping product very soon. We received a software upgrade to the release version, and production remote controls, so we will base our report on these.

We'll put the system through its paces and provide an extensive review in a future issue of this report.

( www.digitaldeck.com )


Nokia 770 Internet Tablet

We have always liked the concept of Internet tablets or "webpads"--small portable devices you can use anywhere in the house to surf the web and more. Several years ago, we tested "Smart Displays," Microsoft's clever but unsuccessful entry into this space, and wrote several articles about them. Although it took some time to integrate a Smart Display into our lifestyle, we were disappointed when we had to send it back, and even more so when Microsoft discontinued the development effort.

Nokia 770 --> Click for larger pictureNow Nokia, the long-time leader in mobile phones, has introduced its own device in this category. The Nokia 770 Internet Tablet is much smaller and lighter (8 ounces) than the smaller of the two Smart Displays we tested three years ago. It could easily fit in Sandy's handbag. It is a free-standing device rather than an auxiliary display for a Windows PC.

The 770 has a 4" touch screen with impressive resolution (800x480) and has both Wi-Fi and Bluetooth radios. Applications include a built-in Web browser, email, newsreader, and audio and video players. It can connect to the Internet two ways: in the home through a broadband modem using the home Wi-Fi network; and outside the home through a cellular network using a Bluetooth connection to a compatible Nokia cellphone.

We have been playing with the 770 for about a week, learning its applications and how to use it around our home. We'll tell you more about it in the next issue of this report.

( www.nokia.com ) ( www.nokia.com/770 )


Your Voice -- Readers Comments

One of our readers wrote: "You should consider ... adding a forum where all can interact and solve problems, you can listen, get ideas etc. Most ISPs have the service (it would cost you nothing more), and provide you insight on what people are trying to solve and what is of interest."

We have long thought about adding a mechanism for reader feedback and commentary, and are looking into the best way to do this--forums, discussion groups, and blog mechanisms. We'd welcome thoughts from our readers.


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