BBH Report Home Page
October 17, 2006 Provided by System Dynamics Inc.

IN THIS ISSUE:

Heard on the Net

Briefly Noted
Updates, Observations and Trends

SmartGrid
The Road to BPL?

Using BPL for Rural Broadband

VON
"V" Is For Video

Upcoming Conferences


Heard on the Net

News about People and Companies Influencing The Broadband Home

People News

Subhajit Bagchi has joined Azaire Networks as its new VP of operations. He was previously with IP Unity. ( www.azairenet.com )

Ray Blair, VP-BPL Initiatives at IBM, was elected as the United Power Line Council's new Technology Co-Chairman of its Board of Directors. ( www.ibm.com ) ( www.uplc.org )

Dr. Sam Endy was appointed to the new position of VP & GM of the Mobile Wireless Business Unit at Atheros. Endy was previously president and CEO of TeleCIS Wireless. ( www.atheros.com )

Danial Faizullabhoy was named president and CEO of BroadLogic Network. He was previously at venture capital firm Walden International. ( www.broadlogic.com )

Satoshi Ikeuchi was named President and CEO at Fujitsu Network Communications and Joe Massery was promoted to senior VP of development. ( us.fujitsu.com/telecom )

Kevin Reinis was named president and CEO of NetStreams. He was previously CEO at Yosemite Technologies. Founder Herman Cardenas was named Chairman of the Board. ( www.netstreams.com )

Pasquale 'Pat' Romano was appointed president and CEO of 2Wire. He succeeds Brian Hinman who will continue to serve on 2Wire's board of directors. [Editor's Note: Congratulations Pat! We also wish Brian the very best in whatever he does next -- he is currently three for three in terms of success with companies he has founded.] ( www.2wire.com )

Samrat Vasisht was named VP of marketing and Matthew Byrne senior VP of mobile sales at On2 Technologies. ( www.on2.com )


Company News

Acquisitions

Microsoft is acquiring Israel-based Gteko Ltd., a PC technical support and services company, for $110 million. ( www.microsoft.com ) ( www.gteko.com )

Motorola has acquired Symbol Technologies for $3.9 billion. Separately, Motorola is purchasing privately held Vertasent LLC, which has solutions for managing on-demand services in the broadband cable industry. Financial terms of the Vertasent acquisition were not disclosed. ( www.motorola.com ) ( www.symbol.com ) ( www.vertasent.com )

France's Societe Francaise de Radiotelephone (SFR), a Vivendi subsidiary, is purchasing the fixed and broadband businesses of Sweden's Tele2 in France for approximately $450 million. SFR is one of three major wireless operators in the French mobile market. ( www.sfr.fr ) ( www.tele2.com )

Time Warner has completed the restructuring of their AOL Europe businesses by selling AOL France's Internet access business to Neuf Cegetel for about $365 million in cash. The Carphone Warehouse is acquiring AOL’s Internet access business in the UK for $688 million. Previously, AOL Deutschland was sold to Telecom Italia. ( www.timewarner.com ) ( www.neufcegetel.fr ) ( www.carphonewarehouse.com )

Funding

BelAir Networks, a provider of mobile wireless broadband mesh network solutions, announced a $21.4 million Series D financing round. ( www.belairnetworks.com )

BPL Global, a provider of software solutions and systems integration services for broadband over power line and smart grid infrastructures, has received $25 million in equity investments, largely from a consortium of Kuwaiti-based companies. ( www.bplglobal.net )

Ripe Digital Entertainment (RDE), an on-demand digital media company, has received $32 million in Series B financing from companies including Hearst-Argyle and Time Warner Investments. ( www.ripedigital.com )

Ruckus Wireless has secured $16 million in new financing from companies including Motorola Ventures and T-Online Venture Fund. ( www.ruckuswireless.com )


Other News

Apple Computer announced a wireless video streaming set-top box, code-named iTV, to be released in Q1 2007. The box, to be priced at $299, is designed to stream movies, music, and other multimedia files from a computer to a television. It includes a power supply, USB 2.0, 802.11 wireless of a type not announced, and Ethernet; it has HDMI and component video, and stereo and optical audio out to your TV. The announcement was made along with one for an iTunes library with 75 feature-length movies. ( www.apple.com )

BelAir Networks is supplying equipment for a new 60 square mile muni Wi-Fi network in Minneapolis. The city will become the anchor-tenant of the network which will be owned and operated by US Internet. The city wants to enhance public safety and bridge the digital divide. The platform enables US Internet to use WiMAX for backhaul and supports IEEE 802.16e for an eventual move to mobile WiMAX. ( www.belairnetworks.com ) ( www.usinternet.com )

Comcast and CBS announced that they will make eight of the CBS TV Network's leading prime time series available free to Comcast Digital Cable customers with ON DEMAND. The series will include paid commercial spots sold by CBS. The deal replaces a previous one to offer CBS programming for 99 cents per episode only in markets served by CBS owned and operated stations. ( www.comcast.com ) ( www.cbs.com )

Google announced a News Archive Search to allow users to search back over 200 years of historical content. Google has partnered with news organizations such as The Wall Street Journal, The New York Times and the Guardian and aggregators including Factiva and LexisNexis. Both free and fee-based content is included in Archive Search. ( www.google.com )

IP Wireless will be the technology provider for a New York City wireless broadband public-safety network that will add high-speed data and video capabilities to the city's first responders and transportation personnel. The $500 million contract to build and maintain the network was won by Northrop Grumman. The five-year agreement calls for the first data network to be activated in Lower Manhattan by January 2007. ( www.ipwireless.com )

Intel and DIRECTV announced that DIRECTV Plus® HD DVR, a set-top with an integrated digital media adapter, is in final testing with VIIV and will be deployable to customers via a software download starting in December. ( www.intel.com ) ( www.directv.com )

Intellon and Digital Deck won a Technology Innovation Accelerated Award for the Digital Home category at the Intel Developer Forum in San Francisco. They demonstrated a whole-home media experience with the combination of the Digital Deck Home Media System and HomePlug AV powerline technology as the network backbone. ( www.intellon.com ) ( www.digitaldeck.com ) ( www.intel.com/idf )

Motorola introduced a new line of voice-enabled cable modems that will use Session Initiation Protocol (SIP) to support advanced multimedia services for IP phone subscribers. ( www.motorola.com )

SES Americom has announced carriage deals with 30 programmers for their new IP PRIME satellite-delivered TV service which is now under test by BellSouth and the National Rural Telecommunications Cooperative. The IP PRIME video distribution solution enables telcos to provide hundreds of standard and HD television channels for the video component of their bundled offerings. ( www.ses-americom.com )

Sprint Nextel has launched Sprint Power View, a sports and entertainment video programming network intended for viewing on mobile devices. The service is free to Sprint Vision and Power Vision subscribers and is supported on a variety of Sanyo, Samsung and LG phone models. ( www.sprint.com )

Telecom Italia announced a major reorganization to split its fixed-line and mobile businesses into two new companies in order to sharpen its focus on broadband and media activities. The announcement was followed by the stepping down of TI's Chairman Marco Tronchetti Provera, a strike protesting the reorganization, and statements from Italian Premier Romano Prodi insisting he didn't meddle in the restructuring plans. ( www.telecomitalia.com )

Tivo announced its Series3 HD DVR. Its dual tuner can record 30 hours of high-definition programming (300 hours of standard) via a cable card or from over-the-air signals and has a number of other special features. The unit carries a price tag of $799, not including the costs of a Tivo subscription, up to two CableCards and a cable subscription. ( www.tivo.com )

Vodafone is teaming with Italian broadband operator FastWeb to create wireless/broadband bundles in its markets. Vodaphone previously announced a similar deal with BT Wholesale. The first Vodafone Italia/FastWeb offering, called Vodafone Casa FastWeb, permits customers, when at home, to use their cellphones to make calls to all fixed-line and mobile numbers for the cost of a landline phone call. It also includes ADSL broadband. Customers will also be offered Vodafone Infinity FastWeb, for calls between Vodafone mobile phones and FastWeb's fixed-line devices. ( www.vodafone.it ) ( company.fastweb.it )

Yahoo! has partnered with Current TV, a cable and satellite channel powered by “viewer-created content” to create the Yahoo! Current Network. They presently have four channels devoted respectively to action videos, celebrity buzz, auto and motor cycling drivers and travel. ( www.yahoo.com ) ( www.current.tv ) ( video.yahoo.com/currenttv )


Industry Alliances

Fixed/Mobile Convergence

The Wi-Fi Alliance and CTIA have developed a testing program for Wi-Fi/cellular phones which offers RF performance mapping in a converged environment. To complete the testing, a device must be Wi-Fi certified for core Wi-Fi interoperability, and CTIA certified for core cellular performance. The data will be collected from tests conducted in independent laboratories, which will be authorized and recognized by both organizations. ( www.wi-fi.org ) ( www.ctia.org )

WiMAX Spectrum Owners

A new group, called the WiMAX Spectrum Owners Alliance (WiSOA), has been formed by a group of companies that own spectrum and operate services in the WiMAX bands. Founding members include Unwired Australia, Network Plus Mauritius, UK Broadband, Irish Broadband, Austar Australia/Liberty Group, Telecom New Zealand, WiMAX Telecom Group, Enertel, and Woosh Telecom. WiSOA "is focussed on the regulation, commercialization, and deployment of WiMAX spectrum in the 2.3–2.5 GHz and the 3.4–3.5 GHz ranges." At its inaugural meeting, WiSOA announced its intention to sign the first international WiMAX roaming agreement in December. ( www.wisoa.com )


Briefly Noted: Updates, Observations and Trends

Each month, we collect miscellaneous happenings, studies, trends or observations you might have missed. This month's briefs include Nokia's Wibree, studies on fiber deployment and screen usage, and an example of a really niche channel.

Let's Hear It For the "Wi's"

Just when you learned how to keep Wi-Fi, WiMAX, WiBro and WiMedia straight, Nokia is bringing us Wibree--a wireless LAN technology which "complements other local connectivity technologies, consuming only a fraction of the power, enabling smaller and less costly implementations and being easy to integrate with Bluetooth solutions." Wibree offers connectivity between mobile devices or PCs, and small, button-cell battery power devices such as watches, wireless keyboards, toys and sports sensors. It operates up to 10 meters, with a data rate of 1 Mbit per second. Nokia is working with others, including Broadcom, Epson and CSR, to establish Wibree as an open industry initiative. ( www.wibree.com )

U.S. Fiber Tops One Million Homes

New statistics released by the Fiber to the Home (FTTH) Council from RVA Market Research indicate that FTTH passes approximately six million U.S. homes and the number of homes connected to fiber has topped one million. This is up from 671,000 in March and 322,700 a year ago. ( www.ftthcouncil.org ) ( www.rvallc.com )

Which Screen?

The Cabletelevision Advertising Bureau (CAB) released results from a research project by Frank N. Magid Associates about consumers' attitudes and usage of various screens. Three methods were used including a survey of 2101 people ages 12-54. Results indicated that:

  • When consumers were asked which device they absolutely could not live without, the computer was the answer half of the time. The television was the second most needed device, with mobile phones after that.
  • Consumers were less receptive to advertising as the size of the screen decreased. Receptiveness was lowest on mobile phones (nine seconds), with computers (18 seconds) scoring higher and TV the longest (42 seconds).
  • Consumers prefer TV as the primary medium for viewing content such as live sports events, dramas and movies. Small screens, such as mobile phones, scored higher for short-form video including news, weather and sports updates.

( www.onetvworld.org ) ( www.magid.com )

Want to Be a Deer?

There is niche content for almost any segment--and now there's something for folks who want to "watch live deer from their point of view." The Deer Channel Web site informs us that "our cameras are actually mounted on the deer" and that their thermal image cameras are "designed for military-grade surveillance." [Editor's Note: Our backyard in New Jersey is so full of deer I don't think we need to subscribe!] ( www.deerchannel.com )


SmartGrid: The Road to BPL?

The mantra has changed. When we last attended a Broadband Over Power Line (BPL) conference (see BPL Part 2: UTC Telecom and PLCA Conferences (BBHR 5/31/2004) ( www.broadbandhomecentral.com/report/backissues/Report0405_4.html )), most of the discussion was on retail—broadband to consumer—applications. Fast forward two plus years to the recent UPLC Broadband Power Line 2006 conference in Charlotte, NC, and the focus had largely shifted to internal utility applications.

What changed? Demand and costs for electricity have continued to grow rapidly. In recent years, U.S. power utilities have experienced several major mishaps. In a major outage this summer in Queens, NY, the local utility grossly underestimated how many homes were involved. For the first five days, the utility was not able to determine the cause of the outage; after a week, only half the affected customers had service restored. It became clear that utilities don't have the tools to anticipate such failures nor to pinpoint them when they occur.

Some industry participants have long believed that BPL technology is most critical for internal applications at their company. At UTC Telecom 2004, Tim Frost, director of Corporate Planning of Con Edison (the New York City utility), was one of these proponents. Tim is presently the Utility Co-Chair on the UPLC Board of Directors.


State of the Industry

Long time Wall Street analyst Judy Warrick, Senior Advisor, Morgan Stanley, and Sandra Meyer, President, Duke Energy Ohio and Kentucky, provided their perspectives on the utility industry, as well as how the industry is viewed by consumers. Meyer reported that consumers in focus groups said things like: "I don't know why when power goes off it takes so long to fix it. All they have to do is flip a switch and it goes back on" and "They must have a display at headquarters to show them what is happening." The general public is unaware that most utilities lack the tools to anticipate and diagnose failures.

Users also believe that utilities are charging them more for the same things they got before. In fact, the increases in people's bills are reflecting increases in electricity use, as more and more of our lives are intertwined with and dependent upon electronic devices.

Warrick's analysis pointed out that while the utilities have been willing to take huge risks in diversification, they have been unwilling to introduce technologies into their core business. Her conclusion is that the industry is technophobic--but for a reason. That reason is the state of mind that comes from being regulated. "At this point in time the only constituent that matters is the regulator". This focus overwhelms considerations of customers and shareholders, since the regulator has the power of the purse. "Being regulated means little upside and lots of downside" she observed. After all, the utility is "invisible when the lights stay on and humiliated when they don't". The conclusion was that it is going to take lots of hard work and a great deal of education of regulators to make technology adoption happen. The concern is that without greater investment, U.S. utilities will not be able to reliably support the increasing demand for energy.


All Eyes on Texas

Texas provides a contrast with this bleak view of technology adoption. Current Communications and TXU Electric Delivery (the sixth-largest U.S. electric transmission and distribution company) have agreed to build a BPL network covering most of the TXU area. The companies are calling the project "the nation’s first broadband-enabled Smart Grid."

In a jointly presented talk, Michael Quinn, TXU Project Manager, and Terry Wingfield, Current's VP of Business Development, laid out the impetus, goals and status of the project. They reported that an analysis by the Electric Power Research Institute (EPRI) showed that outage costs represent 1% of GDP, or a cost of 50 cents for every dollar spent on electricity. They believe that technology investments could reduce outage costs by 50-80%.

Current will design, build and operate the BPL network, which will cover approximately two million homes and businesses in Dallas-Fort Worth and other communities. The BPL network solution will provide real-time monitoring through the electric distribution network, enabling increased network reliability and power quality, more effective outage prevention, detection and restoration and more efficient meter reading.

TXU has laid out the goal of being in the top-decile with respect to electric service reliability. They also anticipate additional products and services to enable businesses and consumers to manage their electricity usage and costs.

Current Communications will leverage the same BPL network to provide homes and businesses "broadband and wireless services, including the 'triple play' of voice, video and high-speed Internet access delivered over existing electrical lines by simply plugging into any home outlet."

The presenters underscored that "managing the TXU deployment is a joint effort". The fiber infrastructure is already underway and they expect over 10,000 BPL enabled automatic meter reading (AMR) meters will be deployed before the end of 2006. Retail broadband service will also be offered by year end.

The interesting spin on the TXU deployment is that many of Current's competitors we spoke with expressed the hope that the rollout with be a success. They believe success at TXU would pave the way for other utilities to go forward with their own BPL rollouts.

Texas is one of the premiere states for deploying BPL because of its favorable regulatory and legislative environment. Senate Bill 5 (SB5), passed in 2005, authorizes electric power companies to provide broadband service via broadband over power line without oversight by the PUC or by cities.

TXU is not the only BPL project underway in Texas. CenterPoint Energy, which serves 5 million electric and gas customers, has undertaken an extended BPL pilot. As with TXU, they have two goals in mind; one is creating an intelligent grid and the other is the potential for the non-regulated use of assets. TXU is partnering with IBM in this effort; IBM has apparently taken an interest in BPL, since the new Technology Co-Chair on the UPLC Board of Directors is Ray Blair who heads BPL Initiatives at IBM.


Standards: Coexistence or Interoperability?

No technology conference is complete without at least one session on standards. Speakers at this one included Gary Steubling of Duke Energy, Oleg Loginov representing the HomePlug Powerline Alliance, Mike Stelts for the Consumer Electronics Powerline Communication Alliance (CEPCA) and Chano Gomez of DS2 for the Universal Powerline Association (UPA). The focus of the session was on whether the present goal should be "interoperability" or "coexistence".

Gary Steubling of Duke opened the session by saying "All we have today are specifications, not standards". He continued: "If you want to move an industry, you have to get everyone going in the same direction." His bottom line was simple: "Coexistence doesn't cut it."

Loginov talked about why interoperability rather than just coexistence must be achieved. In his view, HomePlug networking specifications are the only globally-recognized standards for high-speed powerline networking.

CEPCA's members include consumer electronics companies such as Sony, Pioneer, Panasonic, Mitsubishi, Hitachi, Toshiba and Sanyo. These companies believe coexistence is critical to prevent conflicting signals on the powerline which end up causing consumers to return their CE products. A dramatic CEPCA slide warned that if the coexistence problem is not addressed, the result will be "mutually assured destruction".

The UPA's goal is "UPA certified products that comply with agreed specifications". Members include Ambient, Current Technologies International, Corinex, DS2, Itochu, Ilevo, Sumitomo and Toyo Network Systems. Several of these companies—including Corinex and Current—are also members of HomePlug. The UPA emphasizes time-to-market, and maximizing use of spectrum for both access and in-home networking.

The bottom line on this session was that there are now three different organizations, each with different specifications. CEPCA and UPA have reached a preliminary agreement towards a coexistence mechanism between UPA silicon and CEPCA silicon, with both technologies equally sharing the channel. These specifications have been submitted to ETSI PLT and the IEEE BPL Standards Working Group. HomePlug believes interoperability is the only viable path, and is not an active participant in efforts to specify coexistence with the others.


Duke Energy Site Visits

The first day of the UPLC conference featured exhibits in the morning and site visits in the afternoon. The exhibits were interesting, but the site visits provided a great opportunity to see how these systems are installed.

Duke Energy merged with Cinergy earlier this year, and is one of the largest US electrical utilities. Duke is headquartered in downtown Charlotte, a few blocks from the conference hotel.

Duke Energy is currently running field trials of both Ambient and Current technologies, both in residential areas about ten miles south of downtown Charlotte. Duke arranged a bus tour to see both trials, and most conference attendees went on the tour.

The first stop was the area where the Ambient system is installed. We visited an apartment complex near a main road with overhead medium-voltage distribution wiring. The picture on the left shows Ambient's node--acting as a repeater to extend the signal further down the power line--mounted on the pole, with the coupler shown at the center right of the picture connected to the medium voltage wire.

Underground wiring runs from the main road into the complex. An Ambient node provides connectivity from the medium voltage to the low voltage side of the transformer. The underground node is mounted on the side of the transformer case; the coupler is the silver-colored cuff in the center left of the picture.

We got back on the bus and drove a short distance to see the Current system in operation at another apartment complex. The picture shows the Current Technologies CT Bridge unit and couplers on an underground transformer. The Bridge is mounted inside the covered housing of the transformer case; the couplers are the cuffs at the center left.

This picture shows the Current Technologies CT Backhaul Point and coupler on a nearby overhead line. The Backhaul Point is the silver box on the lower right; the coupler is at the center left.

The Backhaul Point is connected to Duke Energy's fiber through a fiber node.


Company Announcements

Here are some of the announcements made at the UPLC show:

  • As part of Duke Energy's ongoing BPL pilot program, Ambient announced an Expanded Deployment Agreement. This will expand the current 500 home technology trial to a 6000 home commercial trial. In September, Ambient received FCC certification for their second-generation BPL communication node.
  • Motorola announced a BPL offering which combines its Canopy fixed broadband product with an in-building BPL offering based on Homeplug Turbo technology. Motorola Ventures was one of the participants in equity financing of Intellon, the chip supplier for Homeplug Turbo.
  • utility.net, a BPL integrator and network operator, came out of stealth mode. The company is focused on helping Investor Owned Utilities (IOUs) to deploy BPL technology to unserved and underserved cities and communities.

( www.uplc.org ) ( www.conedison.com ) ( www.morganstanley.com ) ( www.duke-energy.com ) ( www.currentgroup.com ) ( www.txu.com ) ( www.epri.com ) ( www.centerpointenergy.com ) ( www.ibm.com ) ( www.homeplug.org ) ( www.cepca.org ) ( www.ds2.es ) ( www.upaplc.org ) ( www.ambientcorp.com ) ( www.motorola.com ) ( www.intellon.com ) ( www.utility.net )


Using BPL for Rural Broadband

When we got on the bus for the Duke Energy site visits described in the previous article, the only remaining seats were facing backwards. As we started on the ride to the first trial site, we noticed that the two men across from us were wearing shirts embroidered with a utility.net logo. We were intrigued by the name, and had never heard of the company, so we asked what it was. They said "We're in stealth mode, but you'll hear more about it this evening."

Indeed, the evening reception was sponsored by utility.net. After the party got under way, Cheryl Smith got up and introduced herself as utility.net's CEO, and talked about the company's goal: to help utilities roll out residential broadband in "unserved and underserved communities in the United States and around the world." She then introduced the two men we'd sat with the bus tour: Daniel Crespo-Dubie, Vice President network and technology operations, and Michael Keselman, Vice President and chief technology officer.

We had always been skeptical that BPL could be used for rural deployments, since the deployment costs seemed very high when the population density (expressed as homes per mile of power line) is low. So the next day we spent a while talking with Daniel and Michael, and learned about some technology breakthroughs pioneered by International Broadband Electric Communications (IBEC). IBEC's COO, Steve Turner, was a speaker at the conference, and we heard more about their approach.

Later in the conference, Daniel and Michael mentioned that they were taking a potential customer to visit an IBEC deployment in rural Virginia, and invited us to come along. We agreed to change our plans and flew into Charlottesville rather than heading back home.


IBEC's Deployment In Rural Virginia

The next morning, we followed Daniel about forty miles south of Charlottesville to Colleen, VA, home of the Central Virginia Electric Cooperative. CVEC is a not-for-profit cooperative providing electricity to "nearly 32,000 member accounts in 14 Virginia counties."

In CVEC's parking lot, we were introduced to Scott Lee, IBEC's CEO. He told us that IBEC had its roots in two companies: PowerComm Systems, Inc. a company focused on developing technology for the BPL marketplace, where Steve Turner was CEO; and CybrTyme, a dial-up ISP serving rural communities, where Scott was president. They saw a strong need for broadband Internet services in the rural markets, and felt that neither cable nor DSL service was likely to be economically feasible except in the towns. PowerComm had developed and patented several key BPL innovations, and IBEC has licensed those from the inventor, Wayne Sanderson, formerly Steve's business partner.

We drove with Scott up the side of a mountain to a small house that IBEC uses for demonstrations. At the house, Scott introduced us to Brent Zitting, IBEC's VP of Engineering.

Inside the house, Brent demonstrated their system in operation, and showed us the Corinex Powerline Ethernet Adapter used to connect the outside access BPL service to an Ethernet network in the home.

Outside, we looked at the IBEC equipment in a box mounted to a pole. IBEC uses medium voltage equipment from Corinex and from Kaikom, a Korean company. Brent pointed out that all the equipment they install--including the Corinex home adapters--are managed devices and fully visible to their network management system. He said all these devices are based on chips from DS2 and that DS2 provides the software which enables them all to be part of a managed network.

Looking up, we could see the IBEC couplers connected to the power line. IBEC's patented coupler design is based on standard surge arresters. The two outer couplers (to the left and the right in the photo) pick up the signal from one section of the power line and regenerate it for the next section. The second coupler on the right picks up the signal for insertion on the low voltage line to the house.


IBEC and utility.net

Rural broadband has special requirements. Because population density is low, there are few homes passed per mile of powerline. Since BPL requires a repeater or regenerator every half mile or so, it's hard to pay off the capital investment in equipment.

IBEC says its solution features low costs for each regenerator, so that deployment makes economic sense even at low density. IBEC does not manufacture its own equipment; it buys standard DS-2 products from companies like Corinex and Kaikom, and has licensed its patented coupler design to companies that already make surge arresters and can provide couplers at low cost. All of IBEC's BPL equipment is remotely manageable, and it uses a central network operations center to manage all its utility customer networks.

IBEC has focused its sales efforts on serving rural electric cooperatives, and will continue to do so. utility.net believes that IBEC's technical approach makes sense for investor owned utilities as well, since many of them serve rural areas with little or no broadband coverage.

IBEC and utility.net are coordinating their approach to the rural broadband market. Both seek to provide broadband service to unserved and underserved markets--those where there is no broadband access, or only one provider. The companies told us they had a common investor, and viewed themselves as "sister companies."

( www.utility.net ) ( www.ibec.net ) ( www.forcvec.com ) ( www.cybrtyme.net ) ( www.corinex.com ) ( eng.kaicom.co.kr/ ) ( www.ds2.es )


VON: "V" Is For Video

Jeff Pulver's Voice on the Net (VON) conference celebrated its tenth anniversary in Boston last month. We haven't been to VON in a few years, and were impressed by the size of the show floor.

But Voice over IP (VoIP) is no longer the big news. This year's headline was the rapid emergence of video over IP, highlighted by a parallel "Video on the Net" conference.


Online Video Is Not IPTV

In his opening talk, Jeff touched on some topics that mirror our own views.

  • IP Video is a disruptive technology which is starting to result in redefinition of many traditional ecosystems (think advertising, for example)
  • He used the term "IPTV" as we do, to mean a managed service over a provider network which enables telcos to compete with cable-delivered video
  • Video on the net, or "online video", is something different. Both IPTV and online video use IP, but online video involves transmission over the open Internet.

It is this latter phenomenon which Jeff believes is the next big thing. Jeff sounded a warning note when he said that video on the net is so disruptive that Hollywood will go after it in a much bigger way than the telcos initially tried to forestall IP Voice.


AOL: The Happiness Business

Ted Leonsis, vice chairman of AOL was the first keynote speaker. When he talked about The Seven Virtues of Web 2.0 ( ted.aol.com/index.php?id=370 ), his talk seemed more like a "new age" meeting than a VON keynote. For example:

  • "Openness, generosity and benevolence is what the new world is all about."
  • "You can say thank you by offering your pixels to your partners."
  • "AOL is in the happiness business."

Leonsis reiterated the idea that Internet video is critical and said AOL is acting accordingly. Much of his theme centered around the notion that Web 2.0 is about "taking things that you need and enhancing them into things you love". "The goal is to take something from the physical world and make it better, cheaper, easier, more convenient and more fun online." Video is a key part of this transformation.

Leonsis made a big point of the importance of "marketing to algorithms," i.e., being able to collect and analyze information to make content relevant, especially since "we are living in an a la carte world". He gave a concrete example: "After seeing thousands of tire commercials, my computer told me to go get my tires changed--and I couldn't go fast enough to spend $4,000!"

Some specific AOL video initiatives he mentioned were the AOL video portal, In2TV and Sessions for music videos. "in2TV is the long tail in action. There are hundreds of thousands of old TV shows - we're working with Warner and other companies. We've digitized them, made them available on demand, users can search around them, with new programs going up all the time. It's free and ad supported. We believe this is what consumers were looking for: find it, share it, clip it -- and the money goes to studios and artists."

Coming this month is a user created content service called Uncut Video. AOL Search is another video enhanced application, currently in limited beta testing; it combines Google text results on the left side of a page with relevant multimedia results on the right.

AOL has teamed with Intel to launch AOL Video service on PCs with Intel VIIV technology. The service includes movies, TV shows, music and sports videos, plus the ability to search for videos from the Web--and can be viewed on any large-screen TV. "We're bringing Internet video into the living room. It's got a 10 foot user interface designed by AOL in partnership with Intel. CompUSA is really blowing this out. It will be announced next week -- you saw it here first."

Leonsis says online video is happening now because the bandwidth, audience, and a real business model to support it all exist. He believes the business model is changing from a subscription model to more of an ad-supported one -- and that is very visible on AOL's Web site.

Leonsis closed his talk much as he opened it: "Our job is to make consumers happy. What works in your personal life transfers very well as you develop new products. The more people you have in your buddy list, the happier you'll be."


The Future of Television

At first blush, a session called "The Future of Television" might seem pretty presumptuous. On the other hand, the first speaker, Jeremy Allaire, was at the forefront of recognizing and acting on how the power of the Internet could be used to transform distribution and consumption of media. Allaire founded Brightcove in 2004 to provide video content owners the ability to build Internet TV businesses by publishing and distributing video and rich media directly to consumers.

Selected by Ad Age as one of the "10 of the Best Marketers in the Business", Allaire spoke about the various models by which media distribution is funded. These include pay media, free (ad supported) content, digital media stores, subscriptions and mixed mode combinations.

The big topic of this year has been consumer generated media. Brightcove has created a mechanism which allows websites and media owners to tap their value by creating and serving customized "broadband channels" and launching campaigns around topics, events or experiences.

In looking at the economic models for physical world media, Allaire has concluded that Internet TV needs affiliate and syndication models. Seeing this as an opportunity, Brightcove has developed syndication tools for creators and content owners through multiple approaches, including destination portals, social networks and "Web affiliate networks".

Much of what exists in the physical world, Allaire believes, can be relevant to the Internet TV world, but everyone is at the start of a learning curve on how this will evolve.

Caroline Little, Publisher and CEO of Washington Post.Newsweek Interactive, spoke next, providing concrete examples of the blurring of online and physical media. This is the first year that video developed specifically for the Web will be one of the Emmy categories -- and her publication was nominated for one.

One of the experiments for the Post has been to supply video cameras to 50 foreign correspondents. Journalists can choose the best platform for storytelling, whether more traditional video or simple content from direct contact with people and situations. As the media boundaries blur, some of this Web quality video is now being incorporated into traditional TV reporting.


Video From Everyone, Everywhere

Whether the subject was new sources of video content, new methods of publishing, syndicating, distributing, searching or aggregating video (or combinations of these), there were companies on hand to talk about how they are approaching it. Here are a few.

Publishing

Pixpo CEO Ron Stevens described his video self-publishing start-up as a "personal broadcasting company." He showed an example of a furniture store owner showcasing his furniture and described other small-business oriented scenarios. One message was that user generated content is more than "The Zany Professor" on YouTube; it can also serve serious business functions.

Syndicating

ClipSyndicate is a new technology platform and business venture that enables broadcasters and other video content producers to generate new revenue and extend their brand into the "long tail" of the Internet. They syndicate video clips to thousands of vertical web sites looking for specific content of interest for their end-users. Their partners include The Associated Press, Bloomberg and Clear Channel Television. Participating Web sites share in any advertising revenue from clips served from their site.

Searching

With so many sources of online video, Dabble founder Mary Hubble set out to create a place where users could find and collect videos. Dabble does this by recording metadata, such as where the videos are located, who made it, what it's about, etc.

Motionbox is another company that helps you "find where the good stuff is", but in a different way. It works by "deep tagging" which allows users to tag favorite parts of a video so that they and others can jump directly to those parts. Motionbox can be used both for both user and commercially generated content.

Distributing

Peer-to-peer (P2P) content distribution has been a hot topic and several speakers talked about their tools and services. Bram Cohen of BitTorrent says he is developing a tool to facilitate publishing coming out soon. BitTorrent is said to be the single biggest user of Internet bandwidth, so we'll be watching to see whether his next creation has the same kind of impact.

Dmitri Shapiro, Veoh's CEO, described his company's system for distributing television and video content as a way to provide "broadcast of full screen, long-form, hi-res, branded video."

Aggregating

Yahoo! Video was one of a number of represented companies which aggregate user generated video online. One of their current promotions to encourage users to submit videos is a partnership with Frito Lay, inviting people to submit their own ads for Doritos. A submission will be chosen to air during Super Bowl 2007. This will be one more example of blurring content between the online and the commercial television worlds.

In discussing user generated content and its aggregation, the story wouldn't be complete without a mention of YouTube. Google certainly thinks it holds promise--they just agreed to acquire YouTube for $1.65 billion in stock.

Statistics

Comscore Media Metrix statistics give us a glimpse into the popularity of online video. Their July, 2006 data indicate that 106.5 million unique users, or about three out of five of all Internet users, streamed video on the web, with a total of 7.2 billion video streams, averaging 67.4 streams per streamer. On average, the typical viewer streamed two videos per day.

Advertising

One session covered advertising with online video. Speakers talked about "preroll ads" and "postroll ads" (video ads that run before and after user-selected video clips). Several observed that the traditional 30-second ad doesn't work very well before a 3-minute video clip--people get mad at the advertiser.

Observing how hard it is to change long-standing habits, Warren Schlichting of Comcast told a story "about going to talk with Mel Karmazin about new platforms. He said 'I'm going to put my head down on the table and when I look up I want all of you to be gone.' Video guys have dollars but don't have creative people to think about how to make a five-second shot."


NeuLion: Only For Niches?

Is online video a threat to traditional subscription video providers? Chris Wagner, EVP Strategy and Co-Founder of NeuLion believes that his company can increasingly take cable and satellite out of the TV delivery loop. His service, called NeuLion iPTV, "delivers high quality video to your home or business using your existing high-speed Internet connection."

NeuLion delivers video to your TV, without a PC. It provides what looks like a set-top box--although its yellow color is hardly traditional. The box is connected to a broadband source and to the TV set. The service is not limited to a subscriber's home--they can take the box and view their content wherever they have a broadband connection.

NeuLion sells to businesses which aggregate content directed at specific niches; examples include content in Chinese, Persian, African, and Filipino, as well as affinity groups like faith-based networks. These businesses find both the content and the target audience and NeuLion takes care of encoding, storage, streaming, delivery, billing and customer service. They share revenues with their partners and co-brand the service.

KylinTV is one of NeuLion's current partners. KylinTV offers 24 linear broadcast channels and targets the 3 million Chinese-speaking households in the US. Today they have 10,000 subscribers in North America, each paying $25 per month for the service. We didn't learn whether these subscribers are using the service in addition to, or instead of their current video service, although we suspect there is some of each.

Chuck Dolan, Chairman of Cablevision--which provides cable TV service in portions of New York, New Jersey and Connecticut--is one of NeuLion's investors. It looks like Dolan is hedging his bets.


On2 Technologies: A Sidebar on Video Codecs

Why choose proprietary--rather than standards-based--video codecs? That was what we wanted to know once we learned that AOL, Brightcove, iFilm, Vividas and Skype (among others) all choose to use the video codec from On2 Technologies rather than H.264.

To answer that question we met with Bill Joll, President and CEO of On2. Bill told us that their codec is especially good at low speeds, which fits the bandwidth many consumers have available. He said they have a more efficient algorithm--and because the "group of pictures" (GOP) is much shorter, it is more resilient to packet loss.

Another reason is economics. Joll said On2's codec costs less than H.264, and said the licensing fee structure for H.264 involves the complexity of two different organizations. H.264 typically goes into hardware, and its cost is buried in the hardware cost. On2's codec is typically included in a software client which is downloaded for free.

Another On2 strong point is that it has different codecs for large screens, small screens and interactive two-way communications; each of these impose very different requirements.

Macromedia gave On2 a vote of confidence in the summer of 2005 when it unveiled its Flash 8 software with an emphasis on video capabilities. The Macromedia software was powered by the On2 Technologies' VP6. Subsequently, Macromedia's purchase by Adobe was completed and the Flash technology has become even more widely adopted.


Fervor, Excitement, Newness, Promise -- and Chaos

The Video on the Net show covered a wide breadth of material, including topics such as Digital Rights Management and place shifting. It felt like voice over IP in the early days of VON: full of fervor, excitement, newness, promise -- and chaos.

Where online video will go, and what will endure in the longer term, remain to be seen.

Check out this podcast of Jeff Pulver and Ted Leonsis talking about the show and online video ( podcasts.pulvermedia.com/blog/archives/2006/09/jeff_pulver_ted.html ).

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Upcoming Conferences

TelcoTV 2006, to be held November 6-8 at the Gaylord Texan Resort in Dallas, provides in-depth information on the much talked about area of IPTV. Over the past couple of years this topic has gained a much higher profile, as increasing numbers of telephone companies have moved into the video services business. The conference and expo will cover the areas of researching, building, marketing and successfully selling IPTV experiences from the service provider's point of view. It is targeted for telecom professionals with stakes in all aspects of the IPTV value chain. We'll be there, so please stop and say "hi" if you see us. ( www.telcotvonline.com/telcotv06 )