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August 7, 2007
This weekly e-mail newsletter covers everything related to Telco-IP Television.
AT&T Pouring Cash Into Southeast
As part of bringing U-verse TV to former BellSouth territories, AT&T expects to spend $1.1 billion over the next few years on fiber-optic network upgrades, broadband deployment and Internet technologies in three Southeastern states.
AT&T announced plans last week to invest approximately $350 million in North Carolina and $250 million in South Carolina. That follows the telco’s commitment in May to spend $500 million in Georgia.
Atlanta will be the first market in the region where AT&T will offer the U-verse TV IPTV service.
“We will launch the product in the Atlanta area before year-end. We're working hard to make that happen,” AT&T CEO Randall Stephenson said in an interview in the Atlanta Journal-Constitution. Comcast and Charter Communications are the two primary cable operators in the Atlanta metro area.
Aside from Atlanta, AT&T has not announced a timetable for when U-verse TV would be available to consumers in the rest of Georgia or the Carolinas, according to spokeswoman Terri Denard. The network investment “is a first step in the process,” she said. “This is getting the infrastructure in place.”
The telco claimed that increased competition in the video market would result in new jobs being created -- more than 3,000 in North Carolina and 1,400 in South Carolina. At the same time, its acquisitions of BellSouth (http://email.multichannel.com/cgi-bin2/DM/y/hA0MKiQu0A0DJkZ0Et and Cingular Wireless are expected to eliminate 10,000 jobs.
AT&T said the U-verse expansion in the Southeast is the result of video-franchise-reform laws recently passed in Georgia and the Carolinas. However, critics have charged that such statewide-franchise rules haven’t served to accelerate deployment or lower prices for consumers.
AT&T noted that the planned network upgrades do not change its capital-spending guidance for 2007 and 2008. In May, it said the U-verse buildout would be as much as $1.4 billion more expensive than it previously forecast, costing $6 billion-$6.5 billion from 2004-08 compared with the previously expected $5.1 billion over that time period. The telco added that it would provide a “comprehensive update” later this year regarding the investment in the U-verse network in the Southeast region.
As of June 30, the telco counted 51,000 U-verse TV subscribers in 23 markets.
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Verizon Appeals to FCC for Three-Year Set-Top Waiver
The Federal Communications Commission last month granted Verizon Communications a one-year waiver to the agency’s integrated-set-top ban for high-end devices, but last Monday, the telco asked to have until 2010 before it’s required to comply with the rule.
Also last Monday, the National Cable & Telecommunications Association requested that FCC commissioners review the Media Bureau’s denial of the lobbying group’s industrywide waiver request to postpone compliance with the ban until Dec. 31, 2009, or until cable’s downloadable-security standard has been deployed.
Verizon, in its appeal to the FCC, noted that a common standard for software-downloadable set-top security is not expected to be available by July 2008. The company said it would have to “expend enormous resources” developing an interim solution, because it does not have “the existing, off-the-shelf option for complying with the integration ban that traditional cable companies possess.”
Verizon was referring to the CableCARD, the removable hardware devices most cable operators have been deploying with their set-tops since the FCC’s ban went into effect July 1.
Verizon’s FiOS TV service uses Motorola set-tops that have a hybrid architecture combining traditional cable quadrature-amplitude-modulation channels for video delivery with Internet-protocol networking for video-on-demand and other interactive services.
“Forcing Verizon to implement a security solution twice will waste resources, time and effort to the company’s detriment and, ultimately, the detriment of consumers,” the company said.
Cable operators made similar arguments in asking the FCC to extend the deadline. But the FCC’s Media Bureau, which denied the NCTA’s blanket waiver request June 29, said, “The commission has acknowledged the cost of separating security … and concluded that the benefits outweighed any potential harms.”
The cable industry has been developing a standard, called Downloadable Conditional Access Security, which it expects to be widely deployed sometime in 2009. DCAS, to be licensed to equipment makers by Cable Television Laboratories, will eliminate the need for CableCARDs by providing the authentication credentials to be delivered to a set-top or TV as a software update. Before DCAS is ready, both Motorola and Scientific Atlanta expect to deliver proprietary downloadable-security solutions in early 2008.
In July 2006, Verizon originally requested a waiver of the set-top ban until “an interoperable, open DCAS solution can be properly developed and deployed.” Last month, the FCC’s Media Bureau granted waivers to Verizon and more than 120 providers that operate all-digital networks or promise to go all-digital by Feb. 17, 2009 -- the date when TV stations are required to stop broadcasting analog signals. Under the decision, those operators may deploy low-end devices that do not provide HD or digital-video-recorder functions until December 2009.
The bureau last week granted waivers with the same terms to another seven telcos. Meanwhile, the NCTA, in appealing the Media Bureau’s denial of its waiver request, reiterated its position that the order “arbitrarily and irrationally denied the NCTA relief for cable operators’ use of the very devices for which others were granted waivers.” The bureau’s decision “arbitrarily treats similarly situated multichannel-video-programming distributors (MVPDs) differently, is based on prejudicial procedural error and erroneous findings as to important and material questions of fact and is based upon a misapplication … of relevant waiver standards,” the trade group said in its appeal. The Media Bureau in January denied Comcast’s waiver request for three low-end boxes, and the operator subsequently requested that the full commission review the decision. The FCC has not officially responded to Comcast’s appeal.
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FiOS TV Continues to Expand
Verizon Communications announced more franchises and deployments for its FiOS TV service this past week. Cablevision Systems has a new competitor in parts of the Long Island communities of Deer Park, Dix Hills, East Meadow and Levittown, as Verizon is now taking orders for FiOS TV service in those areas, as well as expanding service to more households in Commack and Huntington Station.
The telco also won a video franchise in South Floral Park, N.Y., last week, where it will also compete with Cablevision.
And in Massachusetts, Verizon will take on Comcast and compete for approximately 6,000 households in Westborough, as the Board of Selectmen approved a franchise for the telco. FiOS TV will now be available in 53 Massachusetts communities.
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FiOS TV Continues to Expand
Helius completed its previously announced acquisition of PointeCast. The provider of IPTV solutions for business will take in the provider of rapid-communication and online training solutions as a wholly owned subsidiary, and it will continue to develop applications under the PointeCast brand.
Financial terms of the transaction were not disclosed.
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• Merdan Group completed a “rigorous security audit” of UTStarcom’s IPTV DRM System, and the vendor said the robustness of its digital-rights-management solution was among the highest Merdan has audited.
• IMAKE Software & Services teamed up with Electronic Data Systems and Tech Mahindra on a scalable IPTV solution based on IMAKE's OpenVision product suite and Sun Microsystems' newly released Sun Streaming server, with EDS and Tech Mahindra bringing advanced service management and delivery expertise to the partnership.
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