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August 14, 2007
This weekly e-mail newsletter covers everything related to Telco-IP Television.
Top StoryAT&T Takes On Cox in Oklahoma City
AT&T started marketing U-verse TV in parts of Oklahoma City and surrounding communities, going head-to-head in the market with Cox Communications.
In the Oklahoma City market, the telco is claiming that it offers more HD programming than Cox. AT&T said U-verse TV provides more than 26 HD channels there, while Cox lists 19 on its Web site. Cox, perhaps preparing for AT&T’s entrée, in May began offering Pivot mobile-phone service in Oklahoma City and Tulsa via the joint venture with Sprint Nextel.
AT&T said it launched U-verse TV service Monday in Oklahoma City, as well as parts of Edmond, Moore and Norman. The marketing messaging continues to emphasize that U-verse TV is “the only national provider to offer a 100% Internet-protocol-based television service” -- which makes it, according to AT&T’s spin, "Cooler than Cable." At the end of June, AT&T counted 51,000 U-verse TV subscribers, while 1.8 million customers have signed up for direct-broadcast satellite service from partners DirecTV or EchoStar Communications.
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DBS:FiOS TV May Hurt DBS More Than Cable
Verizon Communications’ FiOS TV service initially appeared to steal disproportionately more customers from direct-broadcast satellite services than cable, according to an analysis of the telco’s rollout in 34 Massachusetts communities last year by research firm One Touch Intelligence.
In 2006, FiOS TV signed up 11,982 subscribers in the 34 towns, which cover a combined 285,000 homes passed. The service was available in each market for an average of about 90 days, One Touch said.
During the time FiOS TV was available, incumbent cable provider Comcast lost 5,216 subscribers across a base of 204,160, a drop of 2.6%, One Touch found. Cable overbuilder RCN, which offers service in nine of the 34 communities, lost 1,813 subscribers, or 7% off its base of 25,895 subscribers.
Assuming that 3% of Verizon subscribers did not have any prior multichannel-video service, that means around 4,600 FiOS TV customers -- 38% of the total for the area -- came from DirecTV or EchoStar Communications' Dish Network, according to One Touch.
The firm analyzed subscriber statistics for Verizon, Comcast and RCN as of Dec. 31, 2006, provided by the Massachusetts Department of Telecommunications and Cable. One Touch also found that in four towns where FiOS TV had been available longer than six months -- Lynnfield, North Reading, Reading and Winchester -- Comcast’s penetration fell between 7.8% and 13.6%. In two other markets where FiOS had been available for longer than six months and where RCN also offered service, RCN took the bigger hit from Verizon than Comcast did, the research firm found.
One Touch said Verizon will likely continue to see double-digit penetration gains in markets where it launches FiOS TV service. However, it cautioned that changes in product offerings and marketing will affect individual market dynamics.
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BriefQwest Pushes for Franchise in Colorado
Qwest Communications International invoked the Federal Communications Commission’s so-called shot clock, which will compel the city of Arvada, Colo., to negotiate a franchise agreement within 90 days or the telephone company will automatically be granted authority to enter the community.
Clark Johnson, assistant to the city manager of Arvada, said the city was served with documentation Aug. 6. Johnson said the city has had informal talks with Qwest for one year, adding that he hesitated to call the sessions “negotiations,” which he defined as regularly scheduled talks.
City officials informed Qwest representatives at those meetings of municipal expectations, especially the desire by local regulators that Qwest build any cable system in more than one or two neighborhoods, Johnson said. System-build-out terms by new providers have been an issue for regulators from state legislatures down to municipal officials.
Johnson said Arvada is not demanding a full municipal build-out. “We offered options” on plant placement and service areas, he said, adding, “They clearly disagree.” Carolyn Tyler, Qwest’s regional media contact, said the company filed its application under the FCC 90-day rules because “Qwest looks forward to serving customers as soon as possible.”
Ironically, the mayor of Arvada, attorney Ken Fellman, is very active in the National Association of Telecommunications Officers and Advisors, one of the governmental trade groups challenging the FCC’s 90-day policy, seeking to have it overturned in federal court.
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BriefNDS Buys Internet-Video Startup for $11.3M
NDS Group said Tuesday that it will acquire CastUp, an Israeli startup that provides software for managing Internet-video production and distribution, for $11.3 million in cash plus additional payments to employees and senior management. CastUp, founded in 1999, will give NDS “access to technologies that will help its current pay-TV customers expand their broadband-video-distribution services,” according to the company’s announcement. NDS expects to use CastUp’s technology to develop enhanced services and applications for broadband-enabled set-top boxes.
“We believe that NDS’ market-leading experience in securely delivering digital content and our global presence will combine with CastUp’s proven technology to allow us to continue to enhance the businesses of our media and entertainment customers,” NDS chairman and CEO Abe Peled said in a prepared statement.
NDS said it expects the deal to be completed by the end of September. Tel Aviv-based CastUp will continue to operate as a separate unit within NDS with its current management team. CastUp’s customers include TV and media companies in Israel, as well as Israeli subsidiaries of U.S. companies like MTV Networks, Blockbuster, Hewlett-Packard and Amdocs.
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BriefCould Olympics Torch Net Traffic?
Citing more than 100 million user-generated videos being produced each day, the potential prospect of bandwidth crunches when NBC streams thousands of hours of TV-quality video for the Beijing Olympic Games and the increase in social networking, photo sharing and more, the New Millennium Foundation predicted potential gridlock.
That was the upshot of a report released last week by telecommunications-policy free-market think tank The Millennium Research Council. The report's author, Jason Kowal, and Ed Moran, a consultant with Deloitte, would not tie that conclusion to a rejection of mandated network-neutrality regulations, but the message was crystal-clear that their solution for the growing bottleneck was investment in network build-outs and the freedom to manage the traffic that will spur that investment.
Asked whether NBC's plans to stream could help to create a "perfect storm" of demand exceeding supply, including from a growing Chinese online population, Kowal said it depends on how NBC manages the streaming and on whether some sports draw particular attention. "It depends on how many people want to watch badminton," he joked. But the serious message was that in order to cope with the rise of IPTV and the full -motion streamed video media companies are increasingly investing in, network owners need to be able to monitor, manage and upgrade their systems.
The network-neutrality backers frequently talk of the need to preserve innovation. While refusing to get into that policy debate, the report's backers co-opted the term and pointed out that network engineers also need the freedom to innovate to manage that traffic and meet expectations of speed and security.
The report made three policy recommendations that certainly sounded like they were aimed at undercutting network-neutrality arguments: 1) “Careful attention should be paid to any new regulation that might adversely impact the business case for Internet investment or set preferences for one business model over another; 2) “[E]ncourage network investment; 3) [N]ot inhibit Internet-service providers’ flexibility to experiment with new traffic-management technologies and strategies.” [back to top]
• Espial Group licensed an additional application of its Evo IPTV Service Platform for use with Sumitomo Electric Networks’ IPTV set-top boxes.
• UTStarcom said its RollingStream end-to-end IPTV solution currently supports more than 310,500 live subscribers in 19 commercial deployments with both China Telecom and China Netcom.
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