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Contentspage two

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EditorJohn Moulding

Advertising ManagerJustin Lebbon

Design and ProductionMatt Mills (Manager)Matleena LiljaJason Tucker

Contributors (supplement)Philip Hunter, Chris Forrester,Steve Hawley

CirculationSarah Wilson (Manager)Joel Whitefoot

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Reports: This Cable && Satellite IInternational supplement ooutlines tthe pprogressof EEuropean IIPTV aand aaddresses tthe cchallenges iincumbent aand nnew-entrant ttelcos fface wwhen rrolling oout TTV sservices, eespecially aadvancedofferings tthat iinclude mmulti-rroom TTV aand HHDTV. IIt ccovers nnext-generation DDSL nnetwork ttechnology, aadvanced eencoding, hhomenetworking, VVOD, ttime-sshift TTV aand ttelecoms/television cconvergencein tthe hhome. WWe ttake aa cclose llook aat oone oof tthe wworld’s mmostambitious IIPTV ddeployments aat SSBC CCommunications iin tthe UUS, aandreport oon hhow tthe ccable iindustry iis rresponding tto tthe tthreat oofswitched, aall-IIP vvideo nnetworks. II hhope yyou ffind iit uuseful.John MMoulding, eeditor

4 Modest progress for European IPTVIPTV is making modest progress in Europe but the real challengesand opportunities still lay ahead. With the majority of Europeanhomes yet to go digital, there is much to play for in the TV stakes,but cable operators are gearing up for a triple-play war. They couldalso fight back with IPTV of their own. Chris Forrester reports

11 Next-generation DSLIPTV providers will have to deliver multiple simultaneous streams ofTV to the home, including at least one HD channel, to compete.Philip Hunter looks at how ADSL2+, VDSL and FTTH can cope withthe challenge, especially using advanced codecs

15 Content on Demand drives IPTVEuropean IPTV operators are leading the way in network-DVR services, helping to differentiate themselves from their Pay TV rivals.Steve Hawley reports on how on-demand is at the heart of TV overfibre and DSL

18 The cable responseThe cable industry has noted the benefits of switched video. Italready uses the technology for VOD and leading operators areexpanding the concept to broadcast TV, delivering less popular channels on request rather than as part of the permanent broadcastline-up. Cable operators are confident that switched video over HFCoffers the best of all worlds

20 ‘Me too’ telco TV not enoughTelcos hope they can exploit IP to fuse voice, data and television andcreate a more compelling consumer experience. IPTV will need to begood; most customers must be poached from cable or satellite

22 Advanced encoding the keyIPTV operators offering one channel of TV per home on new DSLnetworks with short loop lengths can operate with MPEG-2. But onolder networks, or even advanced networks with multi-room servicesor HDTV, the future is AVC or VC-1

24 The home network dilemmaHome networking can have a real impact on the cost and uptakerates of IPTV so there is much debate around the best technologiesto use and whether self-installation is a good idea

26 The heavyweight challengerSBC Communications will launch U-verse TV in limited markets during the next six months and will make the broadcast/on-demandIPTV service available to 18 million homes by 2008. With a state-of-the-art fibre/VDSL2 network, the company could be a bellwether forIP television in the US

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Cable & Satellite Internationalis audited by BPA

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Introductionpage three

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It seems that Internet Protocol

Television, or IPTV, is on

everyone’s mind. It’s hard to

pick up an industry publication, look

at technology news on the Internet

or chat with colleagues at a trade

show without reading, seeing or

hearing something about IPTV.

With all the interest in IPTV, it’s

important to remember what it is

and is not. It is not TV that is

delivered via the public Internet.

Even though the “IP” stands for

Internet Protocol, you won’t log onto

a favourite Web page to view

television programming. IPTV is a

method of delivery for video

services using a secure, highly

managed network to provide an

exciting, versatile entertainment

experience. There are other existing

ways of delivering entertainment

video to consumers today, so

you may ask, “What's new? Why

IPTV now?”.

The rising interest in IPTV is

driven by three very broad industry

trends. The first is very significant

technology disruptions that are

taking place. One is advanced

encoding, such as MPEG-4 Part 10.

This video compression technology

allows bandwidth-limited operators,

such as telcos, to offer video over

existing plants. Another example is

switched digital technology which

allows service providers and viewers

to selectively provide or call up

video without clogging networks

with unwatched content. And finally,

advances in last mile DSL

technology with twisted pair bit rates

up to 25Mbps or more make it

possible to deliver good quality IPTV

services, including HDTV.

The second important industry

trend is fundamental changes in

consumer behaviour. Consumers

want advances in video service that

are similar to those they’ve enjoyed

in voice and data services. They

want choice of content, time

independence for viewing it,

portability of the content and “on

the go” access like other services.

IPTV offers some unique advantages

to address these fundamental

changes. The commonality and

ubiquity of any information on IP

brings some inherent advantages in

producing, scaling and delivering any

kind of content.

The final trend is the increasing

competition of service providers for

delivery of voice, data and video

services, or better yet, to “own the

digital home.” Ongoing industry

consolidation, regulatory changes

and cross-service attacks on the

traditional turfs of other providers

increase the importance of the new

tools for video delivery in a new era

of competition. And I should

emphasise here that IPTV is not just

about telcos offering video. IPTV is

an enabling technology that can and

will be used by cable operators and

other service providers.

IPTV should ultimately allow

service providers to more easily

pursue two real game-changing

opportunities. The first is developing

“cross platform services” which

move applications across the

traditional voice, data and video

categories. Whether this is caller ID

on the television, remote DVR

management from a cell phone or

managing your video library from

your PC, they create value by

enhancing existing services. The

second opportunity is moving non-

network delivered services onto the

network with a differentiable edge.

As you look across the spectrum of

entertainment, information and

communication services, service

providers will have the chance to

move revenue-generating businesses

from traditional print, magnetic

storage or independent electronic

media distribution methods onto

their networks. This represents a

huge opportunity.

So what will it take for success?

The trends are in place and enough

industry players have recognised

them to take action. Content players,

service providers and technology

suppliers are placing their bets on

new business models which will

use IPTV to create value. Some of

those bets will play out but only

after persistent experimentation at

the creative, technical and

commercial levels.

At Scientific-Atlanta, we have used

our decades of experience in

developing and commercialising

integrated video networks to identify

several initiatives we are pursuing

with our customers. These include

new encoders for highly compressed

standard-definition and high-

definition programming, a highly

managed headend and network

solution that employs Network

Management Systems (NMS) to

maximise reliability and flexibility, as

well as a complete family of set-tops

and DVRs to deliver these services

to consumers in an attractive, cost-

effective manner. As a company, we

are extremely excited by these new

opportunities, and that excitement is

reflected by our customers.

One element to help ensure

success for IPTV is encouraging

cross-industry communication on the

new ideas and initiatives that are

underway. We hope we can do our

part by sharing the following articles

with you.

We look forward to success!

Get ready – here comes IPTVIntroduction by George Stromeyer, vice president and managing director, Scientific-Atlanta Europe

George Stromeyer, vicepresident and managing director, Scientific-Atlanta Europe

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According to a recent study(Western European BroadbandAccess Market Analysis, 2004-

2009, IDC) Europe will continue itsenthusiastic and rapid adoption ofbroadband. By 2009, 46 per cent ofWestern European households will havebroadband access, compared to 20 per

cent at the end of 2004. That figureamounts to 92 million broadband

connections near the end ofthe decade, up from 40

million last year.Eighty three

per cent of these connections will beprovided to the residential market –providing the kind of footprint neededto make widespread IPTV services a possibility.

Incumbent and new entry telcos haveseen the potential for digital videoservices. Often threatened by cableoperators targeting broadband Internetand, increasingly, residential voicemarkets, telecoms operators arelooking to provide bundles of services toattract new customers and – moreimportantly perhaps - retain the onesthey have. There is going to beincreasing competition for bundledtriple-play services and broadcast

television and on-demand video willbe at the heart of it.

According to Jan HeinBakkers, senior

analyst with

IDC's European Telecoms andNetworking team: “Broadband is nolonger just about high-speed Internetaccess, as it has evolved into an enablerof a wide bouquet of IP-based services.Although Internet access will remainthe most important application for theshort to medium term, services likevoice over broadband and IPTV are alsodestined to become cornerstones ofsuccessful broadband strategies."

Here’s another view, from RomainBausch, president of satellite operatorSES Global, speaking in August aboutfuture growth opportunities for SES.“We expect [to sign] more contractsduring 2006,” he stated, “especially inthe IPTV area. IPTV - that is, the deliveryof TV over broadband terrestrialnetworks - is growing. We are startingour efforts with SES Americom, andpositioning ourselves in order toparticipate in [this emerging sector].”

Bausch added that the buoyant stateof the interactive TV side of the videobusiness was one of the reasons

behind buying Digital PlayoutCentre, near Munich inGermany (now renamedAstra Platform Services).

Most recently, inAugust, Dr Abe Peled,president ofConditional Accessspecialist NDS, saidhe expected

Modest progress forEuropean IP televisionIPTV, including video over DSL and fibre, is making modest progress in Europe but the realchallenges and opportunities still lay ahead. With the majority of European homes yet to godigital, there is much to play for in the TV stakes, but cable operators are gearing up for atriple-play war. They could also fight back with IPTV of their own. Chris Forrester reports

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further modest IPTV roll-outs over the next 12-18 months.But by 2007 he is expecting to see considerable progress inIPTV-based systems, especially in North America and EasternEurope as smaller players climb onto the bandwagon. “IP willbe more important in 2007 and beyond,” he told analysts.

SES (satellite video distribution) and NDS (content security)provide the foundation stones for any video network and theiroptimism is shared by vendors supplying everything from TV-centric middleware to video headend equipment, all of whomare actively targeting the IPTV market now.

The fact is that most of Europe has yet to adopt digitaltelevision, and the switch from analogue to digital TV is adisruptive process that can lead consumers to consider newsuppliers – or try Pay TV for the first time.

Informa Telecoms has examined how European users willconsume TV during the rest of this decade and its studypredicts that digital penetration will hit 50 per cent inWestern Europe by 2008. By the end of 2010, 65 per cent ofWest European homes will be watching digital TV. That figureis made up of 26 per cent of all homes taking digital cable, 20per cent watching via direct-to-home satellite and 13 per centthrough DTT (digital terrestrial television). The other six percent of digital homes will be accessing IPTV.

The study shows the scale of the challenge facing IPTVoperators, but even at 65 per cent digital penetration, there isplenty of growth potential for any digital offering.

“Rapid advances in DSL penetration have led to a good dealof activity in the area of IPTV,” says the Informa Telecomsstudy. “There have already been some high-profile launchesin this area, and with others to come in the second half of2005 and in 2006, this is expected to be a fast growth sectorin coming years, though the operators will have to counterentrenched opposition from the established cable andsatellite areas.”

Generally, it is Europe’s older-established telcos that arebehind much of the progress in IP-based television. Theseoperators are betting the farm that these new servicesrepresent attractive new business opportunities, and thatthey will help compensate for the fall in prices ofbasic broadband Internet access and decreasingtraditional voice-based revenue streams.

The competition for incumbenttelcos is not just from cable

operators. Most industryobservers suggest that inEurope a prime motivatorfor the development ofIPTV has been the –sometimes forced –deregulation of lastmile access to homes.

So-called Local Loop Unbundling (LLU) has opened the door torival operators who have used their access to lines to launchnot just high-speed Internet services but video-over-DSL too.

Market analyst Screen Digest says that by 2004 in Europe, theincumbent’s share of DSL connections had fallen from 96 percent (in 1999) to 84.4 per cent, and their prediction is that thisshare will be further eroded to 73.8 per cent by 2010.

In the UK and Spain, the established telco incumbents stillhave a firm grip on their broadband access markets. BT’soverall share (including wholesale) is still in the high 90s percent and will still remain above the European average in 2009despite recent retail offerings from AOL, Wanadoo, Tiscali,Video Networks, EasyNet and Bulldog (among others).

In contrast, France is one of Europe’s most accessiblemarkets and France Telecom has seen its broadband marketshare fall from just over 90 per cent in 2003 to 75 per cent lastyear. France Telecom’s share is expected to fall to below 65 percent by 2009. Screen Digest says that it expects Europe’saverage DSL market share (for incumbent telcos) to fall below 75 per cent.

It is no coincidence that France is one of the most vibrantEuropean markets for IPTV today with CanalSat and TPScontent already available via France Telecom’s MaLigne video-over-DSL service, Free.fr and Neuf Telecom. An aggressiveIPTV trial was also announced recently in the country forT-Online’s ‘Club Internet’ customers, using DSLand Microsoft TV’s operating system. No startdate has been given and, while T-Onlineis promising VOD, PVR andtelephony, and hinting at multi-channel TV, nocommitments havebeen given.

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Scandinavia is probably Europe’s mostactive IPTV market, in particularSweden, where both ViaSat and CanalDigital have supplied their content tobroadband users over recent months.ViaSat is feeding Bredbands-bolaget’sfibre-to-the-home system to some300,000 homes, of which 2,300 hadsigned up as of March 31. Canal Digital isavailable on nine FTTH networks acrossSweden, reaching some 66,000households. TeliaSonera, the Swedishtelco incumbent, started offering Pay TVover ADSL to 15 cities in January. Afourth player, also wholly-IP, is FastTV,part of the Bonnier Media group.

Italy is also steaming ahead in IPtelevision, with soccer content the keydriver. Italy has almost no traditionalcable operators but E.Biscom’s FastWebservice has been stellar, helped bymandated access to Sky Italia’s soccerrights. FastWeb also supplies fastInternet and VOD services, coveringRome and Milan among other places.

In the UK, Video Networks Limited isoperating an ADSL

service (HomeChoice) with a pan-London footprint and 15,000subscribers at the last count. Thecompany has just secured a further £45million to fund its rollout across London,the cash coming from one of thecompany’s founding shareholders, ChrisLarson, reportedly after negotiationswith private-equity firms.

And BT, the UK’s incumbent telecomoperator, will launch its long-awaitedbroadband video service next summer,which will include broadcast TV (althoughsome on-the-record quotes out of BThave suggested it could begin asvideo/television on-demand only). Set-topboxes are expected to retail at around£70 (Eu100) with PVR functionalityincluded. Like most telcos offering newIPTV services, BT will use advancedcompression and ADSL2+ technology

Meanwhile, Russia is about to get itsfirst IPTV deployment from StreamTV, asubsidiary of Sistema Multimedia.StreamTV offers 80 TV and radiochannels, broadband Internet andaccess to VOD with charges rangingfrom $9.95 to $17.95 a month (plus a

one-time charge of $210 for theset-top box). Sistema says itneeds 300,000 subscribers inand around Moscow to breakeven, but it is helped byalready having 150,000existing subs for itsnarrowband service.StreamTV uses Alcatel’sOpenMedia suite of products and NDS forConditional Access.

Telekom Austria’s existingInternet-only AON.TV isexpanding into IPTV(calling its serviceAonDigitalTV) in andaround Vienna, with 40channels on offer, plusVOD. And another toe-in-the-water is taking placein Dublin, where MagnetNetworks (owned by US-based ColumbiaVentures) is using fibre-to-the-home and DSL,

initially targeting new housingdevelopments in the Dublin area.

Ingvar Gardarsson, CEO at Magnet,says he expects some 90 per cent of histarget homes to sign up to an IPTVsystem offering broadband, multi-channel video, music, games and evenvideo telephony. Orca Interactive(RiGHTv interactive TV applications) andBitBand Networks (VOD) are among thekey technology suppliers.

Despite the opportunities available inthe TV market, incumbents and newentrants alike will be aware of thewarning contained in IDC’s WesternEuropean Broadband Access MarketAnalysis, 2004-2009 study. This statedthat operators need to be careful thatthe content bundling opportunity doesnot turn into a bundling challenge,where the poor performance of oneservice could backfire on the entiretriple-play package – and lose acustomer forever.

The risks are so high that one giantplayer, Australia’s Telstra, has looked atits wired infrastructure and in Juneapplied a handbrake to its planned IPTVroll-out, citing anxieties over delaysbeing experienced elsewhere, not leastwith Microsoft’s first major Europeanclient, Swisscom.

In May Swisscom, one of the firsttelcos in Europe to sign up toMicrosoft's IPTV software platform, wasforced to delay the launch ofcommercial services from the secondhalf of this year to sometime next year,largely because of reported technicaldifficulties with the software. “Theyaren't as far along as they thought theywould be,” admits Swisscomcommunications director Pia Colombo.“Now we are going to have to wait untilall the kinks are worked out.”

Microsoft’s statements on the delays(which reportedly also affect someother major clients like BellSouth, SBCand Verizon Communications) are fewand far between. Ed Gracyzk is the well-known public face of Microsoft’s IPTVdivision (he is director of marketing,Microsoft IPTV) and says the Swisscomdelay is largely because of the client’s

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set-top box requirements. He arguesthat nobody said that adopting IPTVwould be achieved overnight.

“There are lots of pieces to the bigIPTV puzzle,” says Gracyzk. “We're oneof those pieces and we aim to finish oursoftware later this year. But every telcohas its own requirements, too, and willneed to work closely with its suppliersfor set-top boxes, encoders, content andmore to make everything work.

“If you’re going to bet the farm onthis new service, you’re going to wantto partner with a company whose coreexperience is not only developingsoftware, but developing softwarethat’s used on a massive scale; thathas the experience of creatingsoftware for the consumer; softwarefor the TV; that has the resources tobe there and insure that you’resuccessful in your deployment and inevolving this software platform in thefuture,” adds Gracyzk.

Gracyzk is certainly right. Romewasn’t built in a day and any service thatpotentially integrates just about everydigital device in the home into one end-to-end seamless operation is bound tobe stretching everyone’s capabilities.

None of this has put BT off, anyway.Its expected order for Microsofttechnology has been the worst-keptsecret in the world of IPTV, but recentlythe UK telco admitted it had selectedthe US software giant as its partner.

Andrew Burke, CEO of BTEntertainment, says it is BT’s intentionto feed its content into Xboxes,Microsoft’s Media Centres and “otherplatforms”. He admits that broadband’sinitial appeal was to always-on earlyadopters but now it is much moremainstream. “[Users today] want to usetheir broadband not just for theInternet, but also to have entertainmentdelivered, and to performcommunications. When we looked at themarketplace there was absolutely onlyone choice: that was Microsoft.”

The two companies clearly agree onthe future direction of broadband in thehome. Microsoft’s big vision calls for itssoftware platform to support what

Gracyzk terms ‘connectedentertainment’, a feature that can linkall digital devices such as PCs, gamesconsoles, digitalvideo recordersand phones inthe home, andto be future-proof in theprocess. Somecritics remain,mostly arguingthat Microsoft’smodel is not asscaleable asclaimed, a pointthat Ed Gracyzkfirmly refutes.Time will tell.

The Microsoftview of the worldhas IP at its coreand there are othercommentators whobelieve that with theintroduction of IP lastmiles for television, the telcos havereleased a genie that will change themedia landscape forever.

Ed Richards, a senior partner atOfcom, the UK media regulator, saysBritain’s conversion to a near all-broadband world will take 5-7 years“at most” and represents a faster take-up than any modern technology. Hecites France and Italy’s experience withIPTV as an example to the rest ofEurope, adding: “What's going on hereand in so many other areas is agradual transfer of power frombroadcaster, distributor and supplier,to viewer, listener and consumer.

“The traditional means of control,which have rested squarely on scarcespectrum and mono functionaldistribution systems are graduallyfacing challenges, not least from eachother, from the increasing flexibility ofdifferent distribution systems, eitherthrough network enhancement (DSL,cable, mobile), reception devicecapability (PVRs, PCs, televisions) orthrough a combination of these systemsand devices.”

For IPTV operatorstrying to carve out a future in the videobusiness, the focus is on the here-and-now, however. Roger Lynch, CEO atVideo Networks in London, says the keyto IPTV success is the convergencebetween broadband technology andentertainment, giving consumers more choices.

“IP stands for Internet Protocol - itdoesn't actually stream television overthe Internet, it streams it over a privatenetwork,” he emphasises. “It uses thesame protocol and a lot of the sametechnology to deliver it. Satellite will stillbe there, cable will still be there butfrom a consumer's point of view, ratherthan looking at the technology itself, thefocus [of IPTV] is about giving them[consumers] what they want, when they want it.”

The challenge for new-entry orincumbent telcos is greatest where thereare advanced cable services, of course,and the new video providers can expect afight from Europe’s established wiredvideo providers, who have invested hugesums in building out their own networks.

Cable’s game plan is to accelerate

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digital migration and exploit advancedvideo services like HDTV, VOD,television-on-demand and PersonalVideo Recorders. But in a world of triple-play services, television cannot beentirely separated from the overallservice package and the cable industrywill improve its high-speed data speedsand expand voice offerings, especiallythrough Voice over IP. Some Europeancable operators even have ambitions tooffer mobile voice services.

Typical is an August announcementfrom UK cable operator NTL. A year agoNTL was in bankruptcy protection.Today it is in a much healthier state,likely to merge with the UK’s othercable company Telewest, once Telewesthas sold off its Flextech channelsbusiness. The company is ready to giveBT a fight and CEO Simon Duffy saysNTL will offer customers up to 10Mbps“as standard” for broadband access,although only promising a serviceintroduction by the end of 2006.

NTL is also talking of introducing aninterim service called ‘The TurboButton,’ which will burst a connectionto higher speeds when customers aredownloading bandwidth-heavy contentlike video. This all follows a trend in UScable to improve the data offer.Comcast, for example, has announced anew top residential tier of 8Mbps.

Up to now NTL has been offeringcustomers three tiers of broadbandcovering 1Mbps, 2Mbps and 3Mbps butDuffy has admitted that the operator isnow losing customers to rivaloperators in what he described as a

“more intense competitiveenvironment”.

At this year’s ECCA Congress (theannual gathering of the European CableCommunications Association) therewas much talk about ‘platform wars’.2006 will clearly see more IPTVprogress, especially as the largercommitments achieve meaningfuldeployment and confidence builds.Cable companies, whether in the UK,the Netherlands, Germany orelsewhere will fight to retain marketshare and some will even invest inIPTV-based services themselves.

For the irony is that where IPTV,using DSL in particular, proves to be aviable access network for new TVservices, cable can also exploit thisnew medium. There is now

considerable interest among Europeancable operators in using unbundledlocal-loops to deliver video-over-DSLservices of their own. They can useDSL to expand their existing videoservices into markets where they have no HFC infrastructure and where building an HFC architectureis uneconomic.

The very technology that is allowingincumbent telcos to fight back againstcable, with video services, can also beused by cable to take on the telcos innew markets. The interest in IPTValso reveals a new mindset in somecable companies – less wedded to aspecific transmission infrastructureand more inclined to view themselvesas media service providers who willuse the best access networktechnology available to them.

France Telecom and its big telconeighbours have shown that there isplenty of life left in twisted copper pair.But at the end of the day, IPTV is atechnical definition for an on-demandvideo or broadcast television service (orboth) that is delivered using IPtransport for the last mile access. Untilnow the term ‘IPTV’ could be used todefine a market characterised byincumbent and new entrant telcos withvideo services. In future it could be lessclear who the IPTV operators are.

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The IPTV everywhere vision

Sean Carton, chief experience officer at Carton Donofrio Partners, aBaltimore-based brand and interactive creative agency, has outlined thelong-term implications for consumers now that television is being deliveredwithin IP packets.

“In reality, all digital media will, at some point, be packaged and ‘tagged’ insuch a way the elements can be reconstituted on the various devices we use. Insome respects, all content will exist online as a vast, distributed database. Wecan tap in using TVs, handheld devices, and computers.

“To some extent, this has already happened. But with the development of IPTV (and other technologies), it will eventually become an everyday reality.Between always-on broadband and ubiquitous wireless connectivity, consumerswill be (and are) able to tap into an ever-growing cloud of content. It can beexperienced on any one of a growing inventory of networked devices. The number of content choices consumers have access to is staggering and will only continue to grow.”

New 2005 IPTV Euro-deployments

Country DSL/FTTH Operator Location Notes

Ireland FTTH Magnet Networks Dublin New build homes

France DSL T-Online France National Sold as "Club Internet"

Russia DSL Stream TV Moscow Target 150,000 subs

Belgium DSL Belgacom Wallonia 1,000 strong pilot

Austria DSL AonDigital Vienna Autumn launch

Italy DSL Telecom Italia Major cities Trial to 1,000 homes

UK DSL BT Entertainment Nationwide Trial spring '06

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Digital video over DSL presents carriers with the chanceto compensate for falling voice revenues and, in somecases, disappointing levels of broadband subscription.

But the bandwidths required will often demand expensiveupgrades to the access DSL infrastructure, the second mileand the backbone network, and some carriers still have tobe convinced of the short-term business case fortelevision and on-demand video.

In Germany there is limited enthusiasm for the newmedium, partly because consumers are accustomed tofree TV. But a telling factor is the state of the telephonynetwork. Because Deutsche Telecom was very earlyrolling out DSL services, the network would need to beupgraded and, as a result, the business case for IPTV ispoor. Significant deployment is likely to lag two years behindother telco TV markets like France, Italy and Belgium.

To some degree, the strong regional differences inEuropean IPTV deployments do reflect the varying state ofthe DSL access networks – plus of course the amount ofquality free TV available and existing Pay TV competitionfrom cable, satellite and DTT. So it is the access networkwhere much of the attention is now focused. Even foroperators who already offer Pay TV via copper, the challengeis to prepare their networks for advanced video services likeHDTV and multiple simultaneous channels per home.

Most of the ‘established’ IPTV operators who are using DSLhave rolled out their services using current ADSL technology,which is generally good enough to deliver 4.5Mbps to thehome for all services. FastWeb, the triple-play provider inItaly that uses fibre-to-the-home and DSL access networks,announced in March that it had upgraded existing ADSLconnections to 6Mbps (constant download bandwidth), whilethe UK incumbent BT has been pushing the limits of what ispossible with ADSL, right up to 8Mbps, in tests.

The next generation of DSL, ADSL2+, will have a dramaticimpact on the competitive landscape for pay television inEurope, though. ADSL2+ has the potential to reach 25Mbpsbut in practice it is likely to provide 12-16Mbps. But that isadequate for the medium-term ambitions of most telcooperators, who are hoping to provide one channel of HDTVand two channels of standard-definition TV simultaneously tothe home, in addition to broadband Internet and voiceservices. In fact, 15Mbps seems to be the benchmark figurefor Europe’s more ambitious TV-over-DSL providers.

NTL, the UK cable company, uses twisted pair copper toprovide telephone services to its subscribers and thereforefinds itself in the envious position of being able to choosebetween HFC or DSL for its last mile broadband Internetaccess in future (although it does not make sense today tointroduce IPTV). The company has fibre to withinapproximately 180 metres of customer homes and during

tests it has been achieving 20Mbps with ADSL2+ on most ofits copper, and 16Mbps on its longest copper loops.

France Telecom, which is offering an IPTV service over DSL(MaLigne TV) has been busy with a nationwide roll-out ofADSL2+ in anticipation of a mid-2006 HDTV launch. With looplengths predominantly less than 3.5kms, the company canuse the new technology for the majority of its customerswithout pushing fibre deeper into its access layer, and isconfident ADSL2+ is adequate for its future video needs.

French rival Free is also rolling out ADSL2+ with HDTVservices in mind and yet another French video-over-DSLprovider, Neuf Telecom, is staking its future on ADSL2+. Neufis the leading local-loop unbundler in Europe with a total of700,000 ADSL users at the end of January (not all videosubscribers, of course).

Belgacom, which introduced its interactive digital TV

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Next-generation DSL

IPTV providers will have to deliver multiple simultaneous streams of TV to the home, including at least one HDchannel, to compete. Philip Hunter looks at how ADSL2+, VDSL and FTTH can cope with the challenge, especially usingadvanced codecs

11-12.qxd 26/08/05 09:34 Page 3

offering this year, is putting its faith inVDSL (Very high-speed DSL) technologyinstead, having decided that the looplengths on ADSL2+ were too long. Thecompany has undertaken a Eu300million fibre roll-out programme tobring nodes closer to homes andlaunched it first VDSL based service(VDSL Boost) in January. This currentlyoffers 9Mbps downstream.

Depending on distances, VDSL cansupport bit rates up to 25Mbps, whichwill be ample for even the mostdemanding video user. According toWillem Vebiest, vice president for triple-play at Alcatel (which has a 38 per centshare of the DSL infrastructuremarket), each node should serve 500

subscribers at most, and preferablyless, for VDSL.

Vebiest says Europe is better placedthan the US for the deployment ofadvanced DSL because distances fromthe fibre node to the home are generallyless. This means the majority of homescan be served with ADSL2+ without theneed for additional fibre. “Using ADSL2+,one can achieve 12Mbps to 60 per centof the homes on average in Europe, and4-5Mbps to around 70 per cent. So thereis much better overall coverage thancable networks can provide withoutdoing anything special,” he comments.

Another option, more particularly forservice providers building newnetworks, is fibre-to-the-home. InIreland, the new triple-play serviceprovider Magnet Networks has built aFTTH network serving the Dublin areain conjunction with the Nordicbroadband technology provider andsystems integrator Industria. Thedecision to go for FTTH was driven bythe desire to have plenty of headroomfor new services.

According to Magnet Networks CEOIngvar Gardarsson, “FTTH is future-proof and provides us with a virtuallyendless range of new services as andwhen they come on line. As a result, weare deploying it to as large an extent asis practically and economically feasiblefor the company.”

In practice Magnet is likely toconsider other technologies – certainlyDSL anyway– to reach subscribersoutside the major towns and cities. This reflects the fact that, even for aGreenfield provider, it is uneconomic torun fibre to remoter communities.

At the same time that European IPTVbandwidth is expanding, video bit ratesare starting to fall. Using traditionalMPEG-2 compression, which has beenthe backbone of digital TV worldwide forover a decade, broadcast video typicallyrequires 3Mbps to 3.5Mbps on a DSLnetwork, although it depends on thesource material.

Video Networks Limited (VNL), the UKTV-over-DSL provider, has nowmigrated all its broadcast TV channelsto AVC (H.264/MPEG-4 Part 10),becoming the first company anywhereto make the transition to advancedcodecs. But while using MPEG-2, it was running SD video at 2Mbps forservices captured off fibre (becausethey are easier to encode) but up to3.5Mbps if the feed was coming offsatellite already compressed. Thecompany installed Harmonic Inc’sDiviCom MV100 encoders for itsbroadcast TV requirements.

Advanced codecs – and the otheralternative is Microsoft’s WindowsMedia 9 Video, which is the basis of theforthcoming SMPTE VC-1 standard – areexpected to halve bit rates. The realbenefit will be seen in HDTV, whichrequires 16-22Mbps in MPEG-2 on cable or satellite today. But all videoproviders relying on DSL, including thelarge incumbents currently usingMPEG-2, are expected to use advancedcodecs in the medium term, whether forHD or SD.

One of the few other IPTV operators in

Europe that has committed firmly, andpublicly, to advanced codecs is Bluewin,the Swisscom TV over DSL offering. Thecompany has opted for a WindowsMedia 9 Series solution (usingTandberg’s EN5920 encoders) forstandard-definition television and isaiming for 1.5Mbps bit rates.

In what is probably the mostambitious telecoms TV projectanywhere, this time in the US, SBCCommunications is aiming to at leasthalve bit rates for standard and high-definition TV with Scientific-Atlanta’sadvanced codec encoders – delivering afull video service on a next-generationnetwork to 18 million homes by 2008.

The real benefit of combiningadvanced compression and ADSL2+ orVDSL is in delivering HDTV and thetelcos know they are going to have tooffer a strong HD line-up to competewith cable and DTH satellite.

France Telecom was the driving forcebehind a demonstration in June thatshowed, for the first time anywhere, anAVC compressed, live HDTV broadcastover an operational ADSL2+ network.The demonstration (also involvingAlcatel, Tandberg Television andBroadcom, which supplied its IPTV set-top reference design platform) wasperformed at the French Open TennisTournament at Roland Garros Stadiumin Paris.

Europe’s IPTV operators are readyingthemselves for the next stage of theirtelevision evolution.

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Broadband telecoms carriersaround the world are finally wellon their way towards introducing

TV services to subscribers, usingbroadband IP networks. Even thoughthe loudest IPTV announcements duringthe past year seem to have been comingfrom the US, and about 150 independenttelcos have deployed TV services there,the reality in late 2005 is that there arefar more IPTV subscribers in Europe andAsia than there are in North America.

One of the biggest influences uponservice providers has been the effectthe Internet has had on theexpectations of media consumers.

Internet users are essentially ‘pull’customers – they are destination-driven; they reach a destination on theInternet and pull the content to them.As a result media consumers areincreasingly demanding that this “whatyou want, when you want it” experiencebe made available on TV.

Because competing cable andsatellite operators are moving quicklyto introduce on-demand and interactiveTV services of their own, IPTV serviceproviders – telephone companies,utilities and ISPs - are challenged toprovide service packages that are bothdifferentiated from these incumbent

competitors and, at the same time, ableto meet the “pull, not push” expectation.

They are meeting this challenge bygiving subscribers the choice ofwatching broadcast TV live or on a time-shifted basis where they can access theprogrammes on-demand after they arefirst ‘aired’. These services are furthercomplemented by movies-on-demandand personal communications.

Two of Europe’s most advancedbroadband TV services, HomeChoicefrom Video Networks Ltd in London andFastWeb in Italy, have gone to greatlengths to develop state-of-the-art on-demand content offerings. Interestingly,neither of them are telephonecompanies, although they must bothwork with local incumbents.

Video Networks’ initial broadbandInternet and VOD service becameavailable commercially in 2000 but itwas not until Ofcom, the UK telecomsregulator, reduced local-loop costs

that the company was able to launch itsfull range of services. Its broadcast TVcame on line in May 2004, followed bytelephony in November of that year.

Video Networks co-locates itsDSLAMs (DSL Access Multiplexers) inBT (UK’s incumbent telco) centraloffices. Although its telephony servicesare actually from BT, subscribers arepresented with a single HomeChoicebill. The company presents its

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Content on Demanddrives IPTV forwards

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European IPTVoperators are leadingthe way in network-DVRservices, helping todifferentiate themselvesfrom their Pay TV rivals.Steve Hawley reports onhow on-demand is at theheart of TV over fibreand DSL

15-17.qxd 25/08/05 11:00 Page 3

subscribers with a list of broadcast TVprogramming and those marked with an‘r’ are ‘replay’ (time-shifted) channelswith video content cached on a centralserver for up to a week after their initialrun. Behind the ‘View VOD’ button is adedicated VOD service with about athousand movies, organised by genre.

Currently, on-demand TVprogrammes and movies are storedwithin centralised facilities, not withinthe customer premises device, but theprovider is receptive to local DVRstorage, saying that a combination ofcentralised and local storage wouldcomplement one another. This degree offlexibility will allow Video Networks toprovide on-demand programming in avariety of price/availability models tosupport the HomeChoice promise of,well, more choice!

It will be interesting to follow theprogress of HomeChoice, as BT hasannounced that it will be launching acompeting VOD-only IPTV service in2006.

Like HomeChoice, FastWeb offers liveTV, broadband Internet access,telephony and VOD and, as of mid-2005,the company was serving about 150,000video subscribers. Unlike HomeChoice,whose service is offered in one city anda large town, FastWeb uses abroadband backbone that will cover halfof Italy by the end of 2006. FastWebalready serves video subscribers inRome, Milan, Genoa, Turin, Naples,Bologne and Reggio Emilia.

On-demand TV is part of FastWeb’spromise of “the all on-demandexperience”, and is a majordifferentiator for the company. In fact,its time-shift TV service is unique inItaly; not even Sky Italia (the DTHplatform) offers it.

FastWeb can offer programming fromall but two of its content suppliers on-demand. It has agreements with thenational broadcasters in Italy to recordall programming so subscribers canwatch TV programme archives on atime-shifted basis. FastWeb was alsothe first VOD provider in Italy, offeringmovies from Universal Studios,DreamWorks and 20th Century Fox as

well as national sports programming.In addition to its VOD, time-shift TV

and games-on-TV services, not tomention voice and broadband data,FastWeb also offers personalvideoconferencing both to the TV andthe PC, which one might consider to bethe ultimate in on-demand video.

Because Video Networks and FastWebwere so early to market, they wereforced to make choices that wereunique. For example, no off-the-shelfIPTV middleware applications platformwas available at deployment to helpthem create and present their serviceline-ups on subscriber TV screens. Soboth companies used in-house softwaredevelopers to create them.

Similarly, no off-the-shelf set-topboxes were available to meet theirneeds. FastWeb wanted a built-in videocamera for personal video conferencingwhile Video Networks needed a receiverthat was compliant with its customsoftware. So each provider commissionedcustom set-top boxes based on theirown unique design criteria.

What IP set-top boxes were availablea few years ago tended to come mainlyfrom start-up companies, none of them

at mass-market prices. Today there is a new generation of off-the-shelf set-tops, able to support most on-demand content models, from largemainstream suppliers.

At IBC 2005, for example, Scientific-Atlanta introduced a new suite of IP set-tops specifically targeted for EuropeanIPTV deployments that includedstandard-definition and high-definitiondevices and SD/HD PVR products withintegrated DVB-T receivers (and dualSCART connectors). The range supportsa variety of advanced video codecs(AVC/MPEG-4 Part 10/H.264 and VC-1)and allows operators to take advantage of an open platform thatsupports popular middleware andoperating systems.

Most industry watchers believe thatthe majority of carriers will ultimatelyoffer both live and on-demand TV,including movies-on-demand, incombination with voice and broadbanddata services. Consumer expectations,local culture, competitive pressures andregulatory realities in each homemarket will influence the precise IPTVservice line-ups in each region of the world.

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There is a list of complex issues that IPTV providers must consider when preparing abroadcast/on-demand video offering:● The service mix that makes the most sense, given the competitive offerings availablefrom incumbent competitors in the IPTV provider’s local market. This includes whether ornot to offer time-shifted TV, VOD, HD programming, games, TV-on-PC, home networkingand others● The type of set-top box used to decode the programming, support IP multicast andunicast, support the chosen content protection, and potentially support VOD and localcaching for DVR and maybe in-home video distribution. They must also considercompatibility with the operator’s chosen IPTV middleware, support for remote provisioning,troubleshooting and maintenance● The client-server IPTV middleware-applications platform. This allows the video serviceprovider to introduce the services that its market requires● The video encoding/decoding format, which can be MPEG-2, today’s broadcast standard,or an advanced and less bandwidth-intensive codec such as MPEG-4 Part 10 or VC-1.Advanced codecs present the possibility of offering HDTV over DSL – an importantconsideration in markets where HD has become a common cable or satellite offering● For providers with copper access networks, whether or not to bump up the bandwidth bymoving to ADSL2+ or VDSL over copper. An alternative is to replace copper altogether withoptical fibre

Preparing for on-demand

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Incumbent and new-entry telecomsproviders are making slow butsteady progress in their efforts to

enter the television business. There isno denying that IPTV – deliveringtelevision as IP packets all the way tothe home over private networks – is adisruptive technology. It is here to stay.But whether it also disrupts the medialandscape and allows newcompanies to takesignificant marketshare in digital Pay TVremains to be seen.

The European cable industry is takingprecautions against the threat of IPTVand expects advanced digital videoservices like VOD, television-on-demand, DVR, multi-room DVR andHDTV to cement its relationships withsubscribers. Where digital tiers aresmall or non-existent, the emphasis ison migrating customers to digital TV asthe first step towards introducing thesepremium offers, and in order to harvestbandwidth.

Fibre-to-the-home is still small-scaleso the real threat is video-over-DSL.DSL providers are confident they canoffer an enhanced televisionexperience, partly thanks to theirswitched, IP-based networks, whichenable them to offer an almostunlimited choice of content to users.

Because of the one-to-onenature of a DSL connectionbetween the DSLAM and thehome, programming is onlydelivered to a subscriberwho requests it. Thiscontrasts with cable HFCarchitectures wherethe last mile is ashared medium.Even a VOD streamthat is watched by

one person is 'broadcast' from the cablenode (where the fibre gives way tocoaxial) to all homes fed by that node,whether it is 500 homes or 2,000, forexample.

A European 8MHz channel can carryaround 12 television programmesusing MPEG-2 (certainly on 256 QAMwhere there is 50Mbps per channel,but even on 64 QAM with the right

content mix and statisticalmultiplexing). SoHFC provides a huge amount ofbandwidth.However, becauseall content isbroadcast acrossthe last mile(however shortthat last milemight be)there isstill a

limit onthe choice that

cable operatorscan offer in their

programme line-up.Telcos are convinced that

because of their switchednetworks, they can hit cable hard in

an area where they are used tosupremacy – for on-demand services.

The benefits of a switched networkhave not gone unnoticed; US cableoperators have been using switching,combined with IP video transport ontheir backbones, for several years todeliver Video on Demand. And onetechnology response open to cable

operators is to expand the concept ofswitching to some of its broadcastchannels too – something that willreduce the broadcast line-up on eachcable segment and free bandwidth for

other services, like more VOD.With switched broadcasting,existing QAM resources and

set-top boxes can be used,so for operators offering VODthere is limited networkdisruption. Instead of

broadcasting all programmesfrom every serving

area (perhaps a node), cableoperators broadcast the most popular

programmes only – those that are likelyto have many people watching them lots

of the time.Less

popularspecial interest

channels aremulticast across the

cable backbone but areonly routed into the

local serving area,and then across the coaxial network tothe home, if somebody within thatsegment has requested the channel.

This process is transparent to theconsumer; programmes are displayedon the EPG as part of the broadcast TVoffering, as before. Once somebodyrequests the channel, intelligentsoftware establishes the link from thenetwork backbone, via the correct QAMmodulator, to the home. If someone in aserving area is already watching thesame niche channel then no action isrequired as the new viewer simplytunes to the existing feed. When allviewers of the niche programme have

The cable industry has noted the benefits of switched video. It already uses the technology forVOD and leading operators are expanding the concept to broadcast TV, delivering less popularchannels on request rather than as part of the permanent broadcast line-up. Cable operatorsare confident that switched video over HFC offers the best of all worlds

The cable response

18-19.qxd 26/08/05 10:57 Page 2

stopped watching, the programme is dropped from the localline-up again.

This concept is being taken seriously by major US cableoperators. Time Warner Cable recently completed a ninemonth trial of digital switched broadcasting in Austin, Texas,with a spokesman describing the pilot as very successful. “Asa result we will be rolling out switched broadcast in two ofour markets this year (the company operates in 31 marketsacross 27 states) and pretty rapidly after that.”

Cox Communications, meanwhile, began trialling switchedbroadcasting this year in Minneola, Texas. The

company is testing the technology on 400digital subscribers spread across four

nodes and is broadcasting the wholeanalogue tier of 60 channels but

switching all 56 digital channels. Cox is cagey about its

precise ambitions forswitched broadcasting but aspokesman did say that they are“always interested in technologiesthat offer customers more choiceand that make the most of resources”.The company offers a full range of cableservices including telephony. “That is anothersource of traffic that has bandwidthrequirements. We are certainly not in aposition where it could be characterised asa bandwidth-crunch, but you have to beforward looking.”

Cox is using set-top boxes thatwere already deployed in the system.According to the spokesman, “There were significant changesin the network, including stream modification, routing andQAM modulation, with all the switched QAMs being new.” Sodoes it look like switched broadcasting will be a low-painoption for recovering bandwidth for other services, orincreasing channel choice? In the opinion of Cox, “This is amoderately painful option – comparable to deploying VOD.”

There are other options available to cable operatorsincluding further expansion of network capacity. There issome interest in 1GHz networks in the US but investors arenot keen on the word ‘upgrade’ after years of cable build-out.And of course, cable companies can always use local-loopunbundling to become IPTV providers themselves –something that is already happening in Europe.

Moreover, the cable industry is already sitting on its ownswitched, all-IP last mile network: DOCSIS/EuroDOCSIS. Thisstandards-based transmission technology is used for sendinghigh-speed data and IP voice services over RF (RadioFrequency) today. But it can be used to deliver video too. Infact, a small number of cable operators worldwide areexperimenting with VOD over DOCSIS today.

However, using current CMTS (Cable Modem TerminationSystem) technology, DOCSIS is an expensive way to delivervideo because the CMTS systems were designed for fairlysymmetric data services rather than highly asymmetric

(downstream-heavy) video. If a cable operator has spareCMTS capacity then it may make sense to fill it with video, butthis is not a common luxury.

Important work is underway to separate the modulation/transmission functions of a CMTS from its data processingcapabilities in an attempt to reduce the cost of downstreamDOCSIS services. The forthcoming DOCSIS 3.0 standardaddresses this. But it is early days for DOCSIS video and thereis a strong argument that it is unnecessary at this stage anyway.

Nick Fielibert, VP forScientific-Atlanta Europe and

CTO for Europe and Asia, argues thatswitched broadcasting still offers the

option to exploit DOCSIS 3.0 later, while it alsomakes economic sense now.

“If an operator offers VOD and moves intoswitched digital broadcasting you have to addsome resource management to what is alreadythere and some more QAM capacity,” he says.“This is perfectly feasible from an economicpoint of view – there are no hurdles.”

The resulting hybrid broadcast and switchednetwork is considered a strength that cable

can exploit. If operators optimise thenumber of homes per node, they can

enjoy the efficiencies of a sharedbroadcast medium for popular

content, whilst increasingchannel choice or VODcatalogues through switching.

The telco last mile has limitations of its own, after all. If aDSL provider wants to offer multi-room television and allowconsumers to watch three channels simultaneously, theyhave to deliver three separate video streams into the home.This requires at least 9Mbps for standard-definition TV usingMPEG-2 and will still need a minimum of 4.5Mbps withadvanced codecs like AVC. So multi-room television is ruledout on most ADSL networks today. Once HDTV is added to themix there is a clear need for advanced codecs combined withnetwork upgrades to ADSL2+ or VDSL.

A cable set-top box with multiple tuners (like a multi-roomDVR) can receive three channels simultaneously and routethem to the correct TVs. If these are popular channelscontained in the broadcast line-up, they will be transmittedacross the last mile for any set-top box to tune to. So using HFC,a cable operator can deliver three popular channels of SD tothe home using 9Mbps (in MPEG-2) – but that same 9Mbpswill also feed those channels to the entire population of a node.

The efficiencies of this broadcast architecture are amplifiedonce you introduce HDTV, especially as HD content will belimited early on to the more popular channels like premiumsports. This is perfect material for broadcasting rather thanswitching. So the cable industry remains confident in its HFCinfrastructure, despite a willingness to adopt the best of whatit sees elsewhere.

Report: John Moulding

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Advanced encoding is the future ofvideo-over-DSL. In manyinstances it is the technology that

makes it possible in the first place.Compared to the current MPEG-2 digitalvideo compression standard, advancedcodecs can reduce bit rates by at leasthalf (depending on the content and thequality of the existing MPEG-2encoding) and on older DSL networkswith longer copper loop lengths, thisreduction is necessary to squeeze videothrough the limited bandwidth.

Only DSL providers with newnetworks and short loop lengths, andwho are happy to deliver one channel ofstandard-definition TV to the home, canseriously consider MPEG-2 for encodingbeyond the short-term. Most operatorswho want to offer two or moresimultaneous television streams intothe home will be considering a networkupgrade to ADSL2+ or VDSL, or theintroduction of advanced encoding usingeither AVC (Advanced Video Coding) orWindows Media 9 Video, the Microsoftcodec that is the basis for theforthcoming SMPTE VC-1 ‘standard’.

Video-over-DSL providers operatingin highly competitive environments,where they require multiplesimultaneous channels to the homecombined with HDTV, must look towards ADSL2+ or VDSL and advancedencoding together.

Standard-definition TV channels aretypically encoded at 3Mbps to 3.5Mbpsover DSL today using MPEG-2. Withadvanced codecs, 1.5Mbps is realisticfor SD once operators get to grips withthe technology, whileHDTV can be reduced toaround 8-9Mbps. Thus anumber of European

telcos using DSL are talking about15Mbps as the benchmark to supportadvanced video services using advancedencoding – e.g. one channel of HD andtwo channels of SD to the homesimultaneously. This 15Mbps figure also leaves room for broadband Internetand telephony.

The upgrade strategies of twonorthern European IPTV operatorsillustrate the close relationshipbetween network type, serviceambitions and codec choice. MagnetNetworks is a FTTH operator thatlaunched triple-play services to new-build homes in north Dublin lastDecember, but the company is alreadyplanning its expansion using DSL. TheIPTV systems integrator, Industria, ledthe design and implementation of thebroadband network and according toGudjon Mar Gudjonsson, CEO atIndustria, Magnet will use ADSL2+ fromthe outset on copper, but combine thiswith MPEG-2 during the first phase ofthe anticipated roll-out.

The company is already deployingMPEG-2 set-top boxes to its fibrecustomers and Gudjonsson says of theDSL plans: “The focus will be ontargeting customers within a 2km range[from the exchange/video office] andthat will enable us to deliver bandwidthall the way up to 15Mbps with ADSL2+.We have had some very successfuloutcomes from our tests.”

Gudjonsson says a realistic videooffering using ADSL2+ and MPEG-2 istwo to three streams of standard-definition TV to the home. Magnet isconsidering introducing HDTV but thiswould probably be a premium servicefor fibre connected customers. “We cancertainly continue with MPEG-2 for

several years on ADSL2+ and we don’tsee any big problem [with the codec] ifwe can reach 15Mbps, but when westart offering more services – like videophones and security surveillance, forexample – we will almost certainlymigrate to MPEG-4.”

Meanwhile, Video Networks Limited (VNL), which offers a triple-playservice over ADSL in London, hasdecided that advanced coding (in theform of AVC/MPEG-4 Part 10/H.264) isthe answer to its broadcast TVambitions immediately.

The company currently offersstandard-definition TV only, but clearlyhas its sights on HDTV. According toRoger Lynch, VNL’s chairman andCEO: “We see the benefits ofadvanced encoding in MPEG-4,combined with migration toADSL2+, enabling the sector to provide HDTV in the very near future.”

One of the original motivesfor using AVC encoding wasso that VNL could expandits service footprint toLondon’s outlying suburbswhere the averagedistance between thetelephone exchanges andhomes is higher. DSL bitrates decline with distance butadvanced codecs can compressvideo services enough to ensure thatthey can still be received in the depthsof the network. Lynch estimated lastyear that AVC would enable thecompany to reach 10 million homesinstead of 6-7 million homes withMPEG-2, and that has a real-worldimpact on the bottom line.

VNL migrated its entire

Advanced encoding is a business enabler for the IPTV market, making single streams of SDTVpossible on old ADSL networks, and multi-room services with HDTV feasible for ADSL2+ andVDSL. Where MPEG-2 television is already offered, it can expand market reach, puttingpremium content like sports in front of more subscribers

Advanced encoding opens doors

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broadcast TV line-up (over 60 channels)from MPEG-2 to AVC this summer and isthe first video provider anywhere todeliver live, commercial channels usingan advanced codec. The company isunwilling to provide figures on bit ratesavings yet, but according to SimonHunt, director of television at VNL, “Wehave achieved savings and increasedpicture quality on the channels. Thecodec is relatively immature but wehave made savings from launch, and webelieve there are significant furthersavings to be made.”

Emphasising the impact advancedcodecs can have on network reach andbusiness models, Hunt says VNL is nowable to offer Sky Sports – a premiumsports channel that requires higher bitrates – to more subscribers. “Thepicture is also better than before,” headds. The company’s VOD service

remains MPEG-2 andthere is no hurry

to change thatas non

real-time

encoding means content can beoptimised for the DSL network. VNLdeployed new set-top boxes in May lastyear (which it designed) that wereMPEG-2 but upgradeable to MPEG-4 via software.

VNL can still be categorised as animmature video network – there were3,300 ‘legacy’ receivers when thecompany performed its swap-out, whichwas needed anyway to enable theintroduction of an Electronic ProgrammeGuide. Even today there are only 15,000subscribers, based on the latest figuresreleased in February. For telcos withlarger subscriber bases and MPEG-2‘legacy’ set-top populations the benefits of advanced codecs – beingdemonstrated clearly by VideoNetworks – must be weighed againstthe disruption of set-top swaps. Nearly all existing telco TV providersmust now be performing delicatecalculations about their currentnetwork capabilities, the services theywish to introduce and the availabilityand cost of set-top boxes that supportadvanced codecs.

Generally speaking, advanced codecswill be the preferred option whereverthere are new services with highbandwidth demands. Greenfield video-over-DSL deployments will almostcertainly use advanced codecs –especially once set-top boxes areavailable in numbers next year, andprices fall. Even new-build FTTHoperators may consider AVC or VC-1soon, especially if they intend to offer HDTV.

Their decisions could be influenced bythe fact that much HDTV content will becoming off satellite already encoded inAVC. If IP television operators want tooffer HDTV in MPEG-2 but receive it asAVC, they will need to transcode contentat their video headends. Some encoderexperts believe the only way to performan MPEG-2 to AVC transcode and stillachieve the 50 per cent bit ratereductions expected from AVC is todecode first, then re-encode. This isperfectly feasible but adds to headend costs, with encoders

needed for each channel of broadcastTV transmitted into the network.

Apart from VNL – which is usingHarmonic’s DiviCom MV 100 MPEG-2/AVC encoders – there are very fewIPTV operators in Europe who haveannounced their intention to use next-generation codecs publicly. Swisscom’sBluewin is one of them, having beentrialling TV-over-DSL using Microsoft’sWindows Media 9 codec on Tandberg’sEN5920 SD encoders. Belgacom isexpected to introduce advanced codingtoo – probably AVC. The companylaunched its BelgacomTV serviceearlier this year with MPEG-2 encodersthat are upgradeable to AVC and is nowconverting its network to VDSL with aview to offering HDTV.

France Telecom is another contenderfor advanced coding. The company hasalready upgraded its network to ADSL2+nationally but is developing HDTVservices for a likely service launch next summer. The company is expectedto introduce AVC – certainly for newHDTV customers.

The big surprise has been the earlysuccess of the AVC standard in the IPTVmarketplace. This codec is the clearpreference of satellite and cableoperators but going back two years, thetelecoms market was expected to backMicrosoft’s WM9V codec. The telcomarket share predictions for WM9Vhave steadily declined since then.

One announcement that is awaitedwith anticipation – not from a Europeanoperator, admittedly – is the codecchoice of SBC Communications in theUS. The telco giant is rolling out a veryambitious FTTH and TV-over-DSLservice across 13 US states to 18million homes. The company is usingVDSL2 on its copper networks anddeploying Scientific-Atlanta’s advancedvideo encoder platform (S-A currentlyoffers the Advanced CompressionEncoder Model D9154 with support forMPEG-2 and AVC, with VC-1 to follow).Another big vote in favour of AVC wouldconfirm the impression that the codecpendulum has swung in favour of this standard.

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One of the most important issues facing IPTV operatorstoday is home networking – described by one industryinsider as the elephant in the room that nobody wants

to talk about. Not a glamorous subject but one that candirectly impact network economics and the speed ofsubscriber uptake.

In the US a number of IPTV operators are evaluating theuse of existing coaxial networks in homes for distributingvideo via RF signals to multiple TVs. For most of Europe, coaxis not widely installed in homes and is therefore not a leadingcontender but a number of telcos are considering otheroptions, notably telephone wiring via the HPNA standard,Ethernet over Category 5 twisted pair, electric power cables via the HomePlug standard and, in a few cases,wireless via WiFi.

Most commonly, wireless is being used for data as part ofan overall triple-play package, with video then transmitted viasome wired option. Belgacom, for example, delivers data toPCs via wireless but uses Ethernet over Category 5 cablefrom the termination point to the set-top box.

Weighing up the options can be difficult, with the pros andcons varying between countries, regions and even individualhomes according to what is already installed and otherfactors such as surface area, number of rooms and TVs, andwhether the building is multi-tenanted. For wireless, thethickness of walls and nature of materials used in theirconstruction are also critical.

The two most important factors are cost of installation andquality of service, with telcos sometimes squeezed betweenthe two. At one end of the spectrum, wireless is usuallycheapest to install but is dismissed by most operators asbeing insufficiently reliable for video, albeit ideal in manycases for data. At the other extreme, a Category 5 network isthe most expensive because there is no existing cable exceptin some new homes and it has to be installed with some care.But this technology offers the best combination of reliabilityand bandwidth, able to carry gigabit Ethernet.

However, as Philip Geiger, an IPTV specialist at the Germanmedia consultancy Solon Management Consulting points out,there are two elements to the network installation: thecabling itself and the hardware components such as adaptersand connectors. In the case of Ethernet, this hardware is verycheap, exploiting the economies of scale achieved by theworld's dominant data networking medium, while the cablingis relatively expensive. However, for HomePlug, HPNA andparticularly wireless, it is the other way round. The cablingcosts little either because none is needed or what is neededis already there. In this case, the hardware components are

more expensive. Geiger estimates that

for a small network,Ethernet over Category 5 could cost less to install than, say,HomePlug or HPNA. This is one reason whyBelgacom has adopted it,at present deploying thetechnology only for asingle TV solution, oftenwithin one room. "But fora large network, whereyou need to open up thewall, Category 5 wouldcost several hundredEuros, while forHomePlug, for example, it would be two or three times the Eu50 cost of each adapter," explains Geiger.

Wireless is low-cost whatever the sizeof network but it is only reliable enoughfor transmission within a single room,certainly in most of Europe where thethickness and construction of wallsattenuates the signal significantly. But that has not stopped Telenor Broadcast, amajor TV distribution company in the Nordicregion, from testing modems with in-builtwireless routers. According to the company'sdirector of information, Ingrid Schiefloe,wireless provides sufficient bandwidth but nofinal decision has been taken over whichtechnology to deploy, other than that it mustbe standards-based.

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Home networking can have a real impact on the cost anduptake rates of IPTV so there is much debate about the best technologies to use andwhether self-installation is agood idea. Philip Hunter reports

The home network dilemma

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It is clear that most IPTV providerswill favour solutions without newwires other than for short cableruns within a room, but they willprobably back away from all-wireless. Where it exists, as in someof the Nordic region, coax fits theirrequirements well.

Eric Buffkin is head of themarketing working group at MOCA(Multimedia over Coax Alliance),which is developing a standard forvideo over coax. He believes thetechnology provides the perfectcompromise between cost, capacityand reliability. "In 95 per cent ofoutlets we tested, coax wouldprovide network throughput greaterthan 100Mbps, enough to hostmultiple applications includingvideo streams with Voice over IPand high-speed data," he reveals."That is enough for almost-instant trick modes like fast-

forward and rewinds that you needfor multi-room TV."Furthermore, says Buffkin, the

steps needed to bring the other fiveper cent of homes up to scratch tend to

be relatively straightforward andinexpensive, without requiring extra cabling.

But MOCA based products are only justarriving. In the US, the video server andcoax home networking vendor, Entone

Technologies says it has made substantialprogress bringing down the cost of installing

networks where coax is already in place. "We've reduced the installation cost from $600 to

$150 per home and our aim is get that down tozero," says Entone's CEO Steve McKay. Thecompany has cut costs by eliminating the need forset-top boxes for multi-room TV, transmitting videovia RF signals over the coax from an IP videogateway (called Hydra) directly to TVs. This is aproprietary solution at present.

Other vendors, notably the video network,headend and customer premise equipmentspecialist Scientific-Atlanta, stress that whilecoaxial is the best solution for home networking inthe US, it should be standards based. "We believeHPNA 3 over coax fits best," says the company'sdirector for FTTP and IP video systems, David

Alsobrook. "It is an openstandard and once you

have IP over coax all youhave to do is install IP set-tops," he says.

Alsobrook agrees that as part of the drive toreduce the cost of multi-room TV, IPTV operatorswill want solutions based on just one set top-boxper household. Accordingly, Scientific-Atlanta plansto bring out a hard-drive based set-top boxincorporating an additional two frequency outputscapable of distributing either SD or HD to three TVsin all, including the primary set. This product willbe introduced late in 2005. It will support multipleinput streams but Alsobrook anticipates thattypically there would be three streams beingdecoded and routed to three separate TVs for livesimultaneous viewing, perhaps with an additionalstream or two being recorded on the hard drive fortime-shifted viewing.

Another key issue for IPTV operators is whetherto move towards self-installation. It is difficult topass on the full costs of professional installation tothe customer because this could make homenetworks prohibitively expensive. Belgacom, whichlaunched Belgacom TV in June after six months oftrials, charges Eu129 to set up customers for triple-play but this is unlikely to cover the full cost.Currently it sends out engineers to establish thewireless and Category 5 cable connections.

As for any IPTV operator, self-installation wouldeliminate an engineer's visit but if it leads tounreliable networks the savings could beoutweighed by the cost of providing customerassistance or refunds. The Belgian incumbent telcois evaluating self-install models and is consideringHomePlug and other options. According to WimSteenhaut, Belgacom's TV launch director, thecompany has not ruled out a self-install version ofCategory 5.

MOCA's Buffkin speaks for much of the industrywhen he suggests operators should move towardsself-install – just not too quickly. "We believeservice providers will play a significant role in theinitial roll-out of home networks, just as they did forDSL, or perhaps more so," he says. Alsobrookbelieves that home networks are best installed by aprofessional today, not just to ensure the job isdone properly but also to show customers how touse the various services and options to fulladvantage. For a while at least, most consumerswill be too unfamiliar with the additionalcomplexities of home networks and multi-room TVsolutions to get up and running unaided.

But in time the networks will becomecommoditised and capable of being installed simplyand reliably by consumers, with technologies likeMOCA built into set-top boxes and TVs, Buffkinbelieves. Customer premise equipment vendorshave an important role to play too, partly by offeringproducts that are truly plug-and-play.

European IPTV

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SUPPLEMENT SPONSORS

One IPTV project has attracted more attention than anyother over the last year, probably because it is moreambitious than any other: the broadcast TV and on-

demand offering being developed by SBC CommunicationsInc. The US telecoms company is a genuine heavyweightchallenger for the triple-play market, with 51 million accesslines spread across the country. Its video deployment, whichis expected to begin with controlled market entries late thisyear or early next, will provide a real test of how ‘sticky’ thecurrent cable data/voice/video offerings are.

Most commentators predict that in a mature Pay TVmarket like the US, there will be few easy pickings. So withits scale and customer access, SBC Communications couldprove to be a bellwether for the impact that national IPTVcan have as a new and potentially disruptive digital videoaccess technology.

The company will be armed with a state-of-the-artnetwork that is now being built. This will include fibre-to-the-premise (FTTP) in most Greenfield sites and wherever ithas been necessary to replace existing plant. In existingneighbourhoods the company plans to deploy fibre-to-the-node combined with VDSL2 on the copper lines into thehomes. SBC is currently using a pre-standard version of thisnew DSL technology for its trials, but will use the standardsversion for full deployment. According to Ernie Carey, vicepresident, network at SBC, “We are seeing speeds up to25Mbps at 4,000 feet [1,220 metres] and better than that atshorter line lengths.”

Using these access technologies the company plans to

offer three channels of standard-definition TV and onechannel of HDTV into the home simultaneously. USconsumers can expect multi-channel broadcast TV, acomprehensive VOD catalogue, television-on-demand via thenetwork, DVRs (Digital Video Recorders) and multi-roomDVR functionality.

But that is not all. Carey comments: “IPTV technology canchange the way customers watch TV and allow them topersonalise television. For example, they may be able toaccess digital photos over their TV or programme a DVRremotely from another location using a PC or their cellphone. Or they may be able to receive personalised stock,weather and sports information right on their televisionscreen. Ultimately the technology will allow us to offer new,innovative services beyond today’s broadcast oriented digitalTV network.”

SBC is bullish about its chances in the video marketplace,pointing to the fact that a switched video network savesbandwidth compared to current broadcast cableinfrastructures, where the whole channel line-up is sent to acustomer set-top box all the time. “That means we canprovide more content and it may create opportunities todeliver niche programming,” declares Carey. “Thecustomer’s experience is significantly better than digitalcable or satellite when it comes to selecting channels too,with super-fast channel switching.”

SBC Communications is backing its chances in the digitalvideo business with hard cash – and plenty of it. Thecompany is committing $4 billion to build the fibre/DSLnetwork that will support the new triple-play offering in aproject codenamed ‘Lightspeed’. Project Lightspeed willinitially cover around 18 million homes across 13 states,reaching half of SBC’s customers. The plan is to deploy videoservices to the vast majority of these homes by the end of2007 and complete the remaining areas by the first half of2008. After that the company will continue to expand theupgraded network and resulting triple-play offer toadditional homes “as the technology scales and thedeployment costs decline”.

Alcatel is the primary equipment/services supplier forProject Lightspeed, providing core network access,aggregation and switching equipment platforms to connectcustomers with what are being called the video hub offices(VHO). These contain servers to deliver IP VOD, broadcast TVand interactive applications, among other things. Alcatel is

SBC Communications will launch U-verse TV in limited markets during the next six monthsand will make the broadcast/on-demand IPTV service available to 18 million homes by 2008.With a state-of-the-art fibre/VDSL2 network, the company could be a bellwether for IPtelevision in the United States

The heavyweight challenger

Scientific-Atlanta is supplying IP set-top boxes toSBC. This example of the S-A range is the IPN-430MC Digital Video Recorder

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also supplying video system integration services.Microsoft TV is providing its IPTV Edition software platform

in another significant customer win for the company in thismarket. And in August it was announced that the IPTV set-top boxes will be supplied by Scientific-Atlanta and Motorola.In a statement SBC Communications said, “Both vendors willdevelop and supply IPTV set-top boxes...the contracts giveequal market opportunity to both vendors and continuethrough the end of 2008.” SBC provided a common set ofspecifications to the suppliers.

The IP video networking equipment needed to acquire,process, encode and distribute content to subscribers,meanwhile, is being supplied by Scientific-Atlanta. TheAtlanta and Belgium based company is responsible forcreating: a video operations centre where content andservice quality will be monitored across the network; twonational IP video super hub offices (SHO) where SBC willreceive, aggregate and process its video content; and 40regional video hub offices, which store content and providethe intelligence to deliver the various services.

Among other things, Scientific-Atlanta will provideencoders, satellite dishes, video routers and professionalservices. The company’s ROSA Element Manager System willalso be used to support a wide range of network monitoringand control functions.

All SD and HD encoding will be performed with advancedcodecs – including on segments where the access networkuses FTTH. SBC is currently trialling both AVC (MPEG-4 Part10/H.264) and VC-1 (the SMPTE standard based on WindowsMedia 9 Video). Scientific-Atlanta will supply its advancedencoders for use in the SHOs and also in the VHOs wherelocal content will be encoded. The company currently offersthe Advanced Compression Encoder Model D9154 withsupport for AVC (as well as MPEG-2), with VC-1/WM9Vsupport to follow this year. The SBC deal represented thefirst announcement for a Scientific-Atlanta advanced encoder deployment.

The two SBC super hub offices will be operatedsimultaneously, with each having the capacity to handle the

entire SBC national network load should the other fail. EachVHO serves a designated market area (DMA) and feeds about140 IP service offices. Carey reveals: “We are in the processof building the video operations centre, one super hub officeand four video hub offices. We expect these offices to becompleted and fully operational this year. The remainingsuper hub and video hub offices will be operational in 2006and 2007.”

According to Paul Connolly, VP emerging businesses,transmission network systems at Scientific-Atlanta, the SBCvideo project is unique in the IPTV space because of its scale.The deployment is also interesting because of the way it usestwo super hub offices (effectively national headends) to feedthe entire network. All the national channels are received atthese sites and that is not something that is seen in the UScable industry, where the content reception/aggregationfunction is carried out at multiple dispersed headend sites.

“We have experience of building large video networks andwhile, in some cases, IPTV throws up new challenges, inmany instances video is video,” he says. “You have to receivethe video services, ensure the quality of the video and audioand transmit it reliably. The primary challenge is the scale ofthis deployment and making sure that all the pieces fittogether. One of the strengths of the telephone companieshas been the robustness, reliability and availability of theirnetworks in the voice and data world and we would expect nodifference for video.”

SBC is using the brand name U-verse for its family oftriple-play services and according to Lea Ann Champion,senior executive VP, SBC IP operations and services, “Weremain on track to give consumers more videoentertainment choices through SBC U-verse TV.” She refersto the availability of the new IP set-top boxes as “a majortechnology milestone for IPTV.”

According to Jim McDonald, chairman, president and CEOof Scientific-Atlanta, “The dynamics of interactive videosystems and integrated services over an IP network willrequire set-tops with groundbreaking, innovative technology.The combination of Scientific-Atlanta’s expertise in digitalset-tops and the unique insight we have acquired in helpingSBC establish the infrastructure for its one-of-a-kind videonetwork will help our IP set-tops to provide SBC U-verse TVviewers with a seamless video entertainment experience.”

The big question now is what America’s cable and satelliteTV subscribers will make of this new experience – andwhether the ‘better TV’ that IPTV operators promise isenough to tempt them away from their current suppliers.

Report: John Moulding

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“The customer’s experience is significantlybetter than digital cable or satellite when itcomes to selecting channels, with super-fastchannel switching.”

SBC Communications has its corporate HQ inSan Antonio, Texas

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Take a Closer Look at Scientific-Atlanta

Your End-to-EndIPTV Solution is Here

Scientific-Atlanta is an expert when it comes to helping service providers

squeeze the most capacity and capability out of their bandwidth. Our IPTV

headend solution includes MPEG-4 (H.264) encoding that delivers outstanding

video quality at very low bit rates, as well as new IP set-tops designed to

deliver standard digital, HDTV, DVR and other advanced services. And a great

product portfolio is only the beginning.

Our customers also enjoy the advantage of our decades of award-winning

video experience and strong relationships with industry-leading system

integrators, software developers, as well as cable and telecommunications

providers worldwide.

Go to www.saeurope.com/IPTV for the latest information. Better yet,

call us at +32 56 445 445 and take a closer look at Scientific-Atlanta

for your IPTV systems.

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