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IP Capsule E-newsletter, November 16, 2006

November 16, 2006 By ECN Staff

www.cedmagazine.com  |  CED Broadband Direct  |  Current Issue  |  Subscriptions
November 16 , 2006
Brian Santo

IPso Facto…

The smell of money
IPTV equipment vendors are thanking Mercury for AT&T.

The problem with Verizon, as far as most IPTV equipment vendors are concerned, is that the company is too darn self-sufficient. It's identified the IPTV applications it wants, and it's spec'd out its entire network from headend to CPE to support those applications.

The workings of most of the network components of FiOS are settled and mostly familiar. Verizon has designated its equipment vendors, who know pretty much what they're supposed to deliver, and because little of what they're delivering is all that new, it was relatively uncomplicated to make all their stuff work together. That left Verizon plenty of time to concentrate on applications that can make use of 100 Mbps transmission rates.

Mercury, 'god of commerce'
Mercury, god of commerce

Verizon is paying through the nose for its FiOS network, true, but that kind of stability and the resulting network reliability is priceless. Actually it's about $900 to connect each subscriber, each of whom pays a minimum of $95 a month for a triple play bundle.

But I digress…

The point I'm leading to is that from an IPTV equipment vendor's standpoint, there's not a lot to sell to Verizon that Verizon isn't already buying.

AT&T, on the other hand…

AT&T is creating a network able to provide a minimum of about 25 Mbps to every subscriber with minimal, if any, upgrading of its copper loops. To accomplish that, it has decided to integrate new VDSL technology, H.264 (aka MPEG-4), brand new IPTV middleware from Microsoft, and channel bonding technology, among other advanced technologies and techniques.

AT&T ends up spending – by its own estimate – maybe $12 billion to $14 billion less than Verizon, but it ends up with a complicated integration and a network with bandwidth constraints. AT&T has been spending the bulk of its trials assuring itself that it can fit VoIP, data, and one or two video channels on its line.

That left AT&T less time to develop applications including – but hardly limited to – targeted ad insertion, rate shaping, integrated Web and video content, and multi-room networking.

AT&T has a lot left to do to make U-Verse a competitive service, it will need still more technology to do it, the company is huge and about to get bigger with the acquisition of BellSouth, and with the money saved not opting immediately for fiber to the home, it should have the latitude to spend billions to acquire that technology.

Which meant a lot of IPTV application and equipment vendors were at the recent TelcoTV show for one reason: to get AT&T's attention. They've got the goods. AT&T is going to need those goods. Expect to hear about a lot of deals between IPTV vendors and AT&T in 2007.

As for 2006, AT&T still expects to expand U-Verse from its limited commercial rollout in San Antonio to 15 more markets by the end of the year, according to the man in charge of the operation, Jeff Weber, AT&T's vice president, product and strategy.

Weber said AT&T had a tough job doing a handful of things that had never been done before, but he is absolutely confident AT&T can meet its end-of-year goals with a fully functional, scalable, and competitive service.

"Comcast wants to say what we're doing just doesn't work," he said. "What we're doing works," he asserted.

And 25 Mbps is perfectly adequate, Weber said. There was an expectation an HD stream would need 10 Mbps, but 8 Mbps is enough, and with advanced encoding techniques, that's dropping all the time, Weber said. Furthermore, even though AT&T can do two simultaneous HD streams plus Internet access plus two VoIP streams, he doesn't believe customers will be watching that much video simultaneously. [Few people I spoke at TelcoTV do, either.]

"Twenty years from now, they're all fiber," Weber said, referring to cable companies, "and we're all fiber. For us it's all just rehab. We have to do it anyway."

—Brian Santo, IP Capsule Editor, and CED Magazine Senior Editor

Motorola buys Netopia, dives deeper into DSL, IPTV
Motorola is snapping up Netopia for what some analysts consider a bargain price of about $208 million.

Netopia makes customer premise equipment (CPE) for DSL and IPTV networks, including wired and wireless modems, routers, and gateways. The company also offers remote management software, and broadband services.

With the acquisition, Motorola said it can now offer a full suite of home CPE for copper-based telecom networks, including home media hubs, voice gateways, and IP set-tops.

Netopia has put a great deal of effort into its remote management capabilities. A service provider can use Netopia systems to query, change settings, and update the firmware on CPE associated with video services. Netopia also makes it possible for providers to remotely manage – and even take control of – customers' PCs.

Netopia's MiAVo gateway
Netopia's MiAVo gateway

One carrier is testing the remote PC remote management product now. In an interview conducted early in October, Netopia VP of marketing Chris Thompson said the unnamed company cut its customer support calls by 25%.

Netopia's remote management approach is in alignment with the philosophy of key IPTV providers. Verizon in particular is adamant that subscribers should not have to be system integrators; the provider has to be able to make sure all subscriber services work across all in-home equipment. That philosophy is echoed nearly verbatim by Thompson.

Netopia has what it calls "strategic business relationships" with Verizon, as well as with AT&T, Belgacom, BellSouth, Covad Communications, EarthLink, eircom, Hong Kong Telecom/PCCW, MegaPath Networks, Netifice, and Swisscom.

Perhaps coincidentally, perhaps not, Motorola supplies set-tops to Verizon for its FiOS service.

In the earlier interview, Netopia's Thompson may have telegraphed a potential value of being able to supply both cable and IPTV providers. "We're waiting for the first consolidation of telco and cable." Should that happen, it's more likely to happen in Europe or Canada first, he opined.

While Netopia is preparing for that possibility, Thompson said, the company is having its VDSL2 products tested by over 20 carriers worldwide.

Upon completion of the transaction, Netopia will become a wholly-owned subsidiary of Motorola and will be integrated into Motorola's Connected Home Solutions business.

Optibase gets order for IPTV headend from Hungarian provider
Hungarian Internet service provider TVnet is preparing to offer IPTV, and is installing equipment supplied by Optibase to provide the service. TVnet expects to complete its triple play in Budapest in December.

Optibase provided its carrier class IPTV head end for streaming MPEG-4 H.264 channels to local system integrator Ring Net Telecommunications for the installation of TVnet's IPTV network. Providing broadcast quality video, the Optibase MGW 5100 encodes live video and transcodes from DVB satellite feeds, for streaming over IP networks.

Microsoft touts set-tops that support IPTV Edition
Looking to get a little recognition for gaining some traction in the IPTV market, Microsoft announced that Cisco Systems, Motorola, Philips and Tatung all have SoC-based (system-on-a-chip) set-tops that support Microsoft's IPTV Edition middleware, and that all four have their boxes in at least one carrier somewhere in the world.

Microsoft called the advent of SoC-based set-tops a key milestone. There are clear, longstanding benefits to greater integration (in this example, the integration of a chipset into an SoC), include greater operating efficiency and lower cost, but Microsoft instead touted the achievement as "a testament to the remarkable progress our IPTV ecosystem has made in just a few years."

Microsoft did venture that SoC-based set-tops will somehow "pave the way for service providers to deliver richer TV services at a lower cost," and hinted at new functions, but provided few details and no explanation of why a chipset could not provide those functions but an SoC can.

Microsoft also neglected to identify which set-tops from the four manufacturers include SoCs, just as it neglected to identify the manufacturers of the SoCs themselves.

SA MPEG-4 decoder chosen by TBS
Turner Broadcasting System has chosen encoders from Cisco's Scientific Atlanta operation to provide its content to other telecom companies in the MPEG-4 format.

SA said Turner Broadcasting will be the first U.S. linear programmer to provide its own MPEG-4 signal for Internet Protocol delivery of video content. The SA system also encodes MPEG-2, and can mix and match MPEG-2 and MPEG-4 signals in one transport stream, a necessary capability for several reasons.

S-A's D9034 MPEG-4 encoder
SA's D9034 MPEG-4 encoder

First, many IPTV providers are using MPEG-4. Meanwhile, other video providers are only beginning to come to grips with MPEG-4 video, and of those who can handle MPEG-4 video, most will continue to have systems populated with set-top boxes that can handle only MPEG-2.

The advantage of streaming both together is that programmers can provide both MPEG-2 and MPEG-4 content from the same transponder, using the same conditional access and network management system for simplified operations and a unified authorization procedure for individual customers.

Harmonic enables single frequency network transmission over IP
Teledifusión Madrid, a digital terrestrial television provider in Spain, has deployed Harmonic Inc.'s stream processing platform for what Harmonic says is the world's first single frequency network (SFN) broadcast transmission over an IP network. Teledifusión Madrid is using Harmonic's Electra encoders to transmit content from studios to its central headend, where the ProStream 1000 aggregates the services into DVB-T transports, which are then distributed over IP to the various transmitter sites and received by local ProStream 1000 systems.

Comcast prevails in VoIP patent scuffle
Comcast fended off a patent lawsuit brought against it by Caritas Technologies, a win that should allow the entire VoIP industry to breathe easier.

Caritas claimed that Comcast's VoIP service was covered by a patent that describes using the Internet to set up conference calls. Though not directly referencing VoIP, Caritas' position was that the patent covered any call using the Internet. Caritas was angling for a $2.2 billion settlement.

One of the principals of Caritas is Dave Farber, former chief technologist for the FCC and currently Distinguished Career Professor of Computer Science and Public Policy in the School of Computer Science at Carnegie Mellon University.

U.S. District Judge David Folsom of the Eastern District of Texas in Texarkana decided the patent dealt with traditional telephony systems, and thus did not cover VoIP. Consequently, Comcast had not infringed on Caritas' patent.

Caritas did not say what it would have done had it won. Patent holders who work through the courts take one of two strategies, however. They either establish the validity of their patents with small companies, then sue several larger companies for a big payoff, or they go straight to one company with deep pockets, hope for a settlement, and then go after other companies. It is not unreasonable to expect Caritas would have sued other VoIP providers had it settled with Comcast or prevailed in court against the MSO.

BroadSoft supplies VoIP platform to Danish provider
VoIP software provider BroadSoft announced that v2tel will deploy the company's next-generation VoIP services based on its BroadWorks VoIP application platform. v2tel is a Danish provider of hosted IP PBX services over its nationwide MPLS network; it targets small to medium sized businesses. BroadSoft's IMS-compliant BroadWorks platform provides a range of VoIP applications, including hosted PBX, IP Centrex, mobile PBX, business trunking and residential broadband services fully integrated into a single VoIP application platform.

Askey building IP phones, gateways around TI chips
Askey Computer will use voice over Internet Protocol (VoIP) silicon and software from Texas Instruments in its IP phones and residential and enterprise gateways. The first IP phone from Askey and first two gateways (one for enterprise customers, one for residential) incorporating TI technology are all currently in production.


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U.S. broadband subs top 50M; telcos whittling away at cable lead
There were over 2.5 million additional broadband subscribers in the U.S. in the third quarter of 2006. That number was compiled by Leichtman Research Group (LRG) from the twenty largest cable and telephone providers in the U.S., which represent about 94% of the market.

The top 20 broadband providers now account for nearly 50.9 million high-speed Internet subscribers. The cable industry claims over 28.1 million broadband subscribers, while telephone companies tally 22.7 million DSL and other broadband subscribers, according to LRG.

Telephone companies continue to chip at the cable industry's lead; the top carriers added 1.33 million broadband subscribers, or 53% of the net broadband adds for the quarter. Telephone companies have added more broadband subscribers than cable providers in each of the last eight quarters, acquiring about 1.5 million more subscribers than cable over the past two years.

Consistent with historic patterns, broadband subscriber growth rebounded from the second to the third quarters; subscribers were up 450,000 sequentially. That said, broadband subscriber growth tailed off a bit from a year ago, down about 100,000 fewer than the third quarter of last year.

Broadband Internet Subscribers at end of  3Q 2006 Net Adds in 3Q 2006

Cable Companies    
Comcast* 11,000,000 536,000
Time Warner* 6,398,000 251,000
Cox** 3,200,000 75,000
Charter* 2,343,200 88,100
Cablevision 1,963,880 72,438
Insight 579,700 45,200
Mediacom 544,000 28,000
Cable One 276,434 15,172
RCN 269,000 12,000
Other major private cable companies*** 1,575,000 80,000

Total Top Cable 28,149,214 1,202,910

Telephone Companies^    
AT&T 8,148,000 374,000
Verizon 6,573,000 448,000
Bell South 3,449,000 176,000
Qwest 1,973,000 175,000
Embarq 933,000 84,000
Windstream^^ 603,114 55,268
Covad 531,648 (16,341)
CenturyTel 340,000 27,147
Cincinnati Bell 187,700 11,200

Total Top Telephone Companies 22,738,462 1,334,274

Total Broadband 50,887,676 2,537,184

* Totals reflect pro forma results from system sales and acquisitions
** LRG estimate
*** Includes LRG estimates for Bright House and Suddenlink
^ Total includes DSL and wireline broadband connections
^^ Windstream was formed in July through the spinoff from Alltel and merger with Valor Communications
Sources: The Companies and Leichtman Research Group, Inc.

ntl continues migration toward an IP network with Nortel
ntl Telewest is upgrading its optical backbone from Nortel with dense wavelength division multiplexing (DWDM) technology to expand capacity as it migrates from a circuit-switched business to an IP-based packet network.

The additional capacity afforded by the upgrade will help ntl Telewest deliver more fixed-line voice, video and data services to residential and enterprise customers in the UK, and will assure the company sufficient bandwidth when it eventually begins offering wireless voice.

The DWDM installation is a natural extension of the relationship between the two companies. Nortel is adding the DWDM upgrade to WDM and SDH networks it earlier built for ntl Telewest. Last March, ntl Telewest announced it had begun to source softswitches and multimedia routers from Nortel.

The DWDM upgrade includes the Nortel Common Photonic Layer (CPL) and Optical Multiservice Edge (OME) 6500 convergence platform enabling circuit to packet migration. Together, they will simplify aggregation and transit nodes while expanding capacity over an adaptive, intelligent and efficient optical layer.

Cisco to buy metro Ethernet specialist Greenfield Networks
Cisco Systems will acquire privately held Greenfield Networks, a maker of ICs integrated circuits, hardware and software optimized for Ethernet packet processing techniques that will be used to optimize next-generation Metro Ethernet services.

"By integrating Greenfield Networks technology with Cisco's family of Metro Ethernet switches, we will be able to improve time to market of new carrier-class features to our service provider partners," said Kathy Hill, senior vice president, Ethernet and Wireless Technology Group.



November 2006
Issue Contents »

Company: Espial
Headquarters: Ottawa, Ontario (North American)
CEO: Jaison Dolvane
URL: www.espial.com

Claim to Fame: Provides IPTV middleware and applications, and it recently introduced its new Evo server. The company says its software has been deployed and accredited for more than 100 products from companies including Siemens, Motorola, Sumitomo Electric Networks, Amino, Thomson, Philips, Tilgin, LodgeNet, OnCommand and Celrun.

Recent News of Note: Earlier this year, Espial's middleware was approved for use in the universe of companies working with Auroras Entertainment. Espial recently completed a pilot test of its new Evo server with UPC Sweden.

 

CONNECTIONS Europe
Parks Associates
Berlin, Germany
Nov. 14-16, 2006
More information: Click Here

Fixed Mobile
Convergence Congress

Barcelona, Spain
Nov. 21-23, 2006
More information: Click Here

SCTE SoCal Vendor Days
Dec. 6-7, 2006
Doubletree Hotel
Ontario, Calif.
More information: Click Here

Understanding Mobile and Cellular Networks
Dallas, Texas
Jan. 23-24, 2007
More information: Click Here

China Broadband Triple Play/IPTV Forum 2007
April 18-19, 2007
Hong Kong
More information: Click Here

China DSL Forum 2007
April 18-19, 2007
Hong Kong
More information: Click Here

China VoIP
Conference & Expo 2007

May 23-24, 2007
Hong Kong
More information: Click Here

NXTcomm
June 18-21, 2007
Chicago, Ill.
More information: Click Here

Wireless & Mobile
Expo & Conference

July 17-18, 2007
Toronto, Canada
More information: Click Here

 

Copyright © 2006 Advantage Business Media. All rights reserved.

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