January 5, 2007

About that IPTV ...

By Jim Barthold

A report issued last week by DITTBERNER, the "Global Broadband Subscriber Survey," could pour cold water on enthusiasm about IPTV. According to the report, IPTV subscribers grew 19 percent to 2.7 million in the third quarter, but the majority of that growth took place outside North America.

"I tend to think currently that IPTV is concentrated in small service providers in North America," said James Heath, broadband research director at DITTBERNER, who compiled the report. "The largest IPTV service provider in North America is SaskTel, in Saskatchewan, Canada, and the largest one in the U.S. is SureWest."

Neither, he said, is breaking six figures. AT&T, meanwhile, "is not really getting the bandwidth they thought they were going to get with their fiber-to-the-node, (and) at best their major rollout of IPTV service is going to be delayed by about 18 months. Verizon is not IPTV."

All those projections were made using the strictest view of IPTV of delivering content packets to paying end users. Taking a more liberal view that just about every bit of video content turns to IP somewhere along its transit route, it could be that a cable operator is actually the leading IPTV provider, not just in North America, but in the world.

"The pioneer for IPTV on the MSO side is probably Comcast," he said. "Anything they're doing for true video-on-demand is going to be done with some sort of switched video, and it probably will be done with IP, so it would be IPTV."

Switched video is going to be the big weapon in the battle between the MSOs and Verizon, especially as more high definition TVs hit consumer households, Heath predicted.

Projecting a winner

"When it comes to HDTV, Verizon is going to win out in the long run," said Heath. "The cable guys are limited with bandwidth ... but five years out, these guys at Verizon are going to have a bandwidth that's not quite unlimited, but it's around 10 terabits. They have the ability to offer better quality HDTV in the long run than the hybrid fiber/coax networks are going to be able to do in the short run."

While conceding that MPEG-4 compression should make a difference in how much HD content can be transmitted, Heath cited sources saying that "13 megabits is what you need if you're going to be watching the Super Bowl on a 52-inch plasma. I've had people tell me if you could see the quality of HDTV while you're sitting in a production studio, which has 25 megabits of data pass forward, you just wouldn't go back to watching it on a cable system."

If those numbers are right, the bandwidth has to be there for the quality experience, and "Verizon is doing the right thing. It's going out there, building an infrastructure that it won't have to replace for 20-25 years and beating the crap out of the cable guys both in terms of broadband quality and access quality and television quality ... over a broadcast basis that the HFC networks just won't be able to deliver," he concluded.

Talk about fightin' words to start out a new year.

- Jim Barthold