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from: Light Reading

2006 Top Ten: Big IPTV Moments

JANUARY 05, 2007

Most people will probably look back at 2006 as (another) "warm-up year" for IPTV. Here at Light Reading we like to think of IPTV as a toddler -- just out of diapers, and about to break a heap load of stuff as part of its "learning process."

During the past 12 months, the sector's nascent movers and shakers made some, er, moves and shakes -- some good (think James Brown), some bad (think Madonna).

But enough of the dance floor. Here are our Top Ten IPTV moments of 2006.

10. Content Owners: IPTV's No Big Deal
The IPTV industry came face to face with video content owners at the National Association of Broadcasters (NAB) show in Las Vegas last April, and the content owners displayed what parents refer to as an "attitude problem." (See NBC Exec: IPTV's No Big Deal.)

Will they still be sucking sour lemons in 2007? We'll find out this Spring in Vegas when NAB opens its doors again.

9. Lucent Bags Telefónica's Middleware
The cozy relationship Lucent -- sorry, Alcatel-Lucent (NYSE: ALU - message board) -- enjoys with Telefónica SA (NYSE: TEF - message board) shunted the New Jersey crew right into the IPTV middleware brat pack. The vendor announced in April it would take over the support and development of Telefonica's Imagenio (pron. EEMAHAYNEEOH) IPTV middleware platform. (See Lucent, Telefonica Team on IPTV.)

And following the marriage of the year (no, not TomKat), Lucent's Imagenio adoption could have some major knock-on effects. (See Number 5 and Alcatel Preps New Tech Roadmap.)

8. AT&T Fights Off IPTV 'Jitters'
Just a couple months after AT&T Inc. (NYSE: T - message board) officially launched its U-verse IPTV service (see No. 4), industry sources began reporting that the carrier was struggling with video packet loss issues. For the couch potato lounging in front of the goggle box, that can mean major annoyances such as screen pixilation and jitter, or even full screen freezes. (See AT&T Still Has IPTV 'Jitters'.)

AT&T and its vendor partner Microsoft Corp. (Nasdaq: MSFT - message board) took issue with the allegation, which came from reliable industry sources. But behind closed doors, AT&T is said to have told its vendors to "go away and fix this."

7. U.S. Video Franchise Bites the Dust
September saw news out of Washington that federal legislation to create a national video franchise wasn't likely to pass during 2006. Several bills containing such a franchise were ultimately spiked by the notorious "network neutrality" issue, which the bills also addressed. (See Lawyers: Video Franchise Law Won't Make It and Support Picture Still Fuzzy on New Video Bills.)

The issue's not dead, though, as the new Democratic leadership in the House and Senate is reportedly poised to introduce new net neutrality bills very soon, and a national video franchise could be part of the package.

6. BT Unveils Its Vision
One of the most high-profile IPTV deployments in Europe, "BT Vision," finally flickered into life in early December. (See BT Focuses Its IPTV 'Vision'.)

But once the curtains were pulled back, the launch was more talk than walk. BT Group plc (NYSE: BT - message board; London: BTA) is still getting its content picture together, isn't doing a lot of marketing of the service, and is adding subscribers very slowly. That'll change this year, promises BT, which expects to have "hundreds of thousands" of subscribers by the end of the year. We'll be counting.

5. Alcatel and Lucent Get Hitched
The mother of all telecom mergers will have a major impact in IPTV circles, reckon the cystal ball gazers. (See Alcatel & Microsoft Going Steady.)

But the newlyweds have some tough decisions to make. Lucent just got its hands on an IPTV middleware product (See No. 9), and seems hell bent on bringing IMS to the party, while Alcatel already spiked its own middleware product in favor of Microsoft's platform. Sound the bell for Round One of what should be an interesting tactical punch-up. (See Lucent Sees IPTV Opening, Alcatel, Lucent Seal Deal, and Merger Would Benefit Lucent in IPTV.)

4. AT&T Launches U-verse... Slowly
Alcatel/Microsoft's marquee IPTV account in North America, AT&T, began the official "scaled launch" of its fiber-powered U-verse data and IPTV service in June, starting in the carrier's hometown of San Antonio. (See AT&T Launches HDTV, AT&T to Launch Lightspeed Next Month, and AT&T Hits Lowered U-verse Goal.)

AT&T quickly began throwing house parties to warm folks up to the new service. And while the food was hot, the new U-verse TV was said to be "pretty cool." (See AT&T's Whitacre: 'Nobody Gets a Free Ride'.)

3. Swisscom Launches IPTV... Finally
Another high-profile European IPTV deployment, by Swisscom AG (NYSE: SCM - message board), launched in early November. The service, called Bluewin TV, saw daylight after three painful years of stop/start developments and trial disappointments. (See Swisscom Launches IPTV, Swisscom IPTV Stall Sends Shivers, and Swisscom Finally Launches IPTV.)

Reports that Swisscom's broadband customers are still waiting for the launch of a specialist Yodeling Channel are purely fictitious.

2. Cisco Spies the IPTV Bandwagon
"We're not just routers and switches anymore!"

Light Reading learned in November that Cisco Systems Inc. (Nasdaq: CSCO - message board) has been flirting with potential partners so it can offer an "end-to-end" IPTV distribution system to carriers. Cisco is one of the few vendors with the muscle and marketing prowess to offer a real alternative to the Microsoft/Alcatel solution for large carriers, so we're anticipating a 2007 showdown. (See Sources: Cisco Forming IPTV 'Ecosystem', Scientific-Atlanta: Cisco's Sweet Deal?, Cisco KiSSes Up to Telco TV, and Cisco Snatches VOD Vendor Arroyo.)

1. Pass Me the (HD) Chips Already!
Throughout much of 2006 a scarcity of MPEG4 high definition (HD)chips dogged many parts of the IPTV industry. Sources say service providers large and small held back on video network rollouts, fearing they'd have to do it all over again once HD and MPEG4 technology became available. So deployments slowed, and video equipment vendors suffered from sagging sales. (See IPTV Sluggishness Slugs Tandberg TV.)

Finally, in October, some of the major set-top box makers began shipping new MPEG4 HD boxes to carriers, and vendors say deployments began picking up. For example, AT&T announced in November it was streaming HD content to its IPTV customers in Houston. (See IPTV's High-Def Holdup and STB Makers Support MSFT.)

So that's your lot. 2007 will see IPTV grow even more as services roll out, and, perhaps, freeze up. Stay tuned for more channel-changing entertainment.

— Mark Sullivan, Reporter, Light Reading